EXHIBIT 10.2
January 31, 2003
Xxxxxxx X. Xxxxxxxxxx, M.D.
000 Xxxxxx Xxxxx
Xxx Xxxxxxxx, XX 00000
Dear Xxxx,
The purpose of this letter is consolidate into one document our
agreement as to the terms of the discontinuation of your employment by
ChromaVision Medical Systems, Inc. (the "Company") and to modify those terms as
set forth below. Except as set forth in Sections 5 and 6, this letter completely
supersedes the letters dated December 30, 1996 (including Attachment A thereto),
and January 10, 2001 from the Company to you relating to the terms of your
employment.
1. Employment. Your employment by the Company shall terminate effective
at 5 p.m. on the date this letter agreement is approved by the Board of
Directors of the Company pursuant to Section 5.
2. Amendment of Severance Benefits. In lieu of all of the severance
benefits provided in the December 30, 1996 and January 10, 2001 letter
agreements referred to above, the Company will do each of the following:
(a) issue to you 68,000 shares of Common Stock under the
Company's 1996 Equity Compensation Plan (subject to the restrictions
provided below) as soon as practicable after the date that this letter
agreement is approved by the Board of Directors of the Company pursuant
to Section 5 and
(b) pay to you an aggregate of $150,000 as follows:
~ $37,500 within ten days after this letter agreement is
approved by the Board of Directors of the Company
pursuant to Section 5;
~ $37,500 on or before each of April 30, 2003, August 30,
2003 and December 31, 2003.
(c) allow your options (excluding those terminated pursuant to
Section 3 below) to continue to vest and become exercisable in
accordance with their terms for 24 months after the date of termination
of your employment (December 31, 2002), except (for all such options
referred to in this clause (c)) to the extent that any such options
expire in accordance with their terms or terminate in accordance with
their terms (or the terms of the plan under which they were issued)
because of a change in control or other event which causes all options
outstanding under that plan to terminate;
(d) subject to the conditions set forth below, allow all of your
options (excluding those referred to in Section 3 below) to continue to
vest and be exercisable for an additional 24 months after the expiration
of the 24 month period referred to in (c) above, except (for all such
options referred to in this clause (d), to the extent that any such
options expire in accordance with their terms or terminate in accordance
with their terms (or the terms of the plan under which they are issued)
because of a change in control or other event which causes all options
under the plan to terminate.
The shares of Common Stock to be issued to you pursuant to (a) above
shall be subject to the restriction that you shall not be permitted to sell,
transfer, pledge, assign or otherwise encumber the shares for a period of 30
days after they are issued to you. As required by the Company's 1996 Equity
Compensation Plan, (i) the certificate evidencing the shares will be held in the
custody of the Company until the expiration of the 30 day period referred to
above, (ii) the certificate will bear the legend referring to this restriction
required by the 1996 Equity Incentive Plan and (iii) concurrently with signing
this letter you are delivering to the Company a stock power endorsed in blank
with respect to the shares to be evidenced by the certificate. Promptly after
the expiration of the 30 day period referred to above, the Company will instruct
the Transfer Agent for its Common Stock to cancel the legended stock certificate
held in its custody and to deliver to you an unlegended certificate for the same
number of shares registered in your name. The shares are being issued in
consideration of the change in the severance benefits provided for in this
letter from those in the letter agreements dated December 30, 1996 and January
10, 2001 referred to above.
The benefits referred to in (d) above are contingent on your execution
and delivery to the Company of a General Release and Agreement in the form of
Exhibit A to this letter and your not rescinding the General Release and
Agreement. You will have 21 days following the date of termination of your
employment in which to consider the General Release and Agreement, although you
may execute it at any time during the 21 day period. Please note that the
General Release and Agreement has a rescission period of seven days.
The benefits referred to in (d) above are also contingent on your not
soliciting any employee of the Company for employment, independent contractor or
other service arrangement with another business and your not competing with the
Company, in each case during the 48 month period referred to in clauses (c) and
(d) above. For purposes of the foregoing, you will be deemed to be competing
with the Company if you are personally involved in (i) the marketing or sales of
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equipment or systems used for slide-based, microscopic, brightfield or
florescence cell-based imaging for laboratory purposes for any person or entity
other than the Company or (ii) the scientific, engineering, software-development
or other technical aspects of efforts to provide or develop any such equipment
or systems for any person or entity other than the Company.
Nothing in this Agreement is intended to or shall limit your rights
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
3. Termination of Options. Concurrently with your execution and delivery
of this Agreement all outstanding stock options held by you having an exercise
price of $9.25 per share or more are being terminated. Your execution of this
letter constitutes your agreement to the termination of those options.
4. Employment Taxes. By signing this letter you acknowledge that the
Company will continue to treat you as an employee for purposes of paying the
benefits under this letter. All such payments are subject to such taxes and
withholding requirements as may be imposed by applicable law.
5. Need for Board Approval. Both parties acknowledge and agree that
their rights and obligations under this letter agreement are subject to the
condition that this letter agreement be approved by the Board of Directors of
the Company. If this letter agreement has not been so approved by 5 p.m. Pacific
Standard Time on February 28, 2003, this letter agreement and the General
Release and Agreement (if executed and delivered by you as provided above) shall
automatically terminate and be of no further force or effect. Without limiting
the generality of the foregoing, if this letter agreement is not approved by the
Board of Directors of the Company by February 28, 2003, you and the Company will
continue to have your respective rights and obligations under the December 30,
1996 and January 10, 2001 letters relating to the terms of your employment.
6. Entire Agreement. If executed by you, this letter will
constitute the entire agreement between you and the Company with
respect to your employment and the termination thereof and
(subject to Section 5 above) will supersede in their entirety
the letter agreements between you and the Company dated December
30, 1996 and January 10, 2001 except that Section 8
(Indemnification) of the December 30, 1996 letter agreement will
continue to apply as if incorporated verbatim in this letter
agreement and Sections 9 (Arbitration) and 10 (Attorney Fees) of
that letter agreement shall apply to this letter agreement. This
letter agreement may not be amended or supplemented except in a
written document signed by you and the Company.
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If this letter correctly sets forth the agreement between you and the
Company, please execute this letter in the place indicated below.
Yours very truly,
CHROMAVISION MEDICAL SYSTEMS, INC.
By
--------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
AGREED:
----------------------------------------
XXXXXXX X. XXXXXXXXXX, M.D.
Dated: January __, 2003
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EXHIBIT A
GENERAL RELEASE AND AGREEMENT
NOTICE:
Various state and federal laws, including the Civil Rights Act of 1964
and 1991 and the Age Discrimination in Employment Act, prohibit employment
discrimination based on age, sex, race, color, national origin, religion,
disability and veteran status. These laws are enforced through the Equal
Employment Opportunity Commission (EEOC), the Department of Labor and state
civil rights agencies.
If you sign this General Release and Agreement and accept the
agreed-upon special termination benefits described in Section 2(d) of the letter
addressed to you which accompanies this release, you are giving up your right to
file a lawsuit pursuant to the aforementioned federal, state and local laws in
local, state or federal courts against ChromaVision Medical Systems, Inc. and
its affiliates, as defined in the General Release and Agreement (the
"Releasees,") with respect to any claims relating to your employment or
termination therefrom which arise up to the date this Agreement is executed.
By signing this General Release and Agreement you waive your right to
recover any damages or other relief in any claim or suit brought by or though
the Equal Employment Opportunity Commission or any other state or local agency
on your behalf under and federal or state discrimination law, except where
prohibited by law. You agree to release and discharge each Releasee not only
from any and all claims which you could make on your own behalf but also
specifically waive any right to become, and promise not to become, a member of
any class in any proceeding or case in which a claim or claims against a
Releasee may arise, in whole or in part, from any event which occurred as of the
date of this Agreement. You agree to pay for any legal fees or cost incurred by
any Releasee as a result of any breach of the promises in this paragraph. The
parties agree that if you, by no action of your own, become a mandatory member
of any class from which you cannot, by operation of law or order of court, opt
out, you shall not be required to pay for any legal fees or costs incurred by a
Releasee as a result.
We encourage you to discuss the following release language with an
attorney prior to executing this Agreement. In any event, you should thoroughly
review and understand the effect of the release before acting on it. Therefore,
please take this release home and consider it for up to twenty-one (21) days
before you decide to sign it.
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GENERAL RELEASE AND AGREEMENT
This GENERAL RELEASE AND AGREEMENT (hereinafter the "Release") is made
and entered into as of this __________ day of ______, 2003, by and between
CHROMAVISION MEDICAL SYSTEMS, INC. (the "Company") and Xxxxxxx X. Xxxxxxxxxx,
M.D. ("Employee").
1. Background. The parties hereto acknowledge that this Release is being
entered into pursuant to the terms of the Letter Agreement, dated January __,
2002 (the "Letter Agreement"), between the Company and Employee. As used in this
Release, any reference to the Company shall include its predecessors and
successors and, in their capacities as such, all of its present, past, and
future directors, officers, employees, attorneys, insurers, agents and assigns,
as well as all Company affiliates, subdivisions, subsidiaries and parents,
including without limitation Safeguard Scientifics, Inc. and its subsidiaries
(collectively, the "Company Affiliates") and their respective past, present and
future directors, officers, employees, consultants, attorneys, insurers, agents
and assigns; and any reference to Employee shall include, in their capacities as
such, his attorneys, heirs, administrators, representatives, agents and assigns.
2. General Release.
(a) Employee, for and in consideration of the additional special
separation benefits offered to him or her by the Company specified in the Letter
Agreement that accompanies this Release, and intending to be legally bound, does
hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company and the Company
Affiliates, of and from any and all causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which he ever had, now has, or hereafter
may have or which his or her heirs, executors or administrators may have, by
reason of any matter, cause or thing whatsoever, from the beginning of his or
her employment with the Company and/or the Company Affiliates to the date of
this Release, and particularly, but without limitation, any claims arising from
or relating in any way to his or her employment or the separation of his or her
employment relationship with the Company, including, but not limited to, any
claims arising under any federal, state, or local laws, including Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq.,
("Title VII"), the Age Discrimination in Employment Act, 29 U.S.C. Section 621
et seq. ("the ADEA"), the Americans with Disabilities Act, 42 U.S.C. Section
12101 et seq. ("ADA"), the Employee Retirement Income Security Act of 1974, 29
U.S.C. Section 301, et seq., as amended ("ERISA"), and any and all other
federal, state or local laws, and any common law claims now or hereafter
recognized, including claims for wrongful discharge, slander and defamation, as
well as all claims for counsel fees and costs.
(b) By signing this Release, Employee represents that Employee
has not commenced any proceeding against the Company or any Company Affiliate in
any forum (administrative or judicial) concerning Employee's employment.
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(c) Employee agrees and covenants not to xxx or to bring, or
assign to any third person, any claims or charges against the Company or any
Company Affiliate with respect to any known matter arising before the date of
this Release or covered by this Release and not to assert against the Company or
any Company Affiliate in any action, grievance, suit, litigation or proceeding
any known matter before the date of this Release or covered by this Release.
Employee agrees that in the event of a breach of any covenant of this Release by
Employee, the Company or any Company Affiliate damaged as a result of such
breach shall be entitled to recover attorneys' fees and costs in an action
relating to such breach, in addition to compensatory damages.
(d) Anything herein to the contrary notwithstanding, neither
party is released from any of his, her or its obligations under this Release or
the Letter Agreement, and each party confirms that such obligations are the only
obligations of the Company or its affiliates in connection with the cessation of
Employee's service with the Company.
(e) Employee acknowledges that this Release extends to all
causes of action, suits, debts, claims and demands referred to in (a) above,
known or unknown, suspected or unsuspected. By signing this Release, Employee
expressly waives all rights under Section 1542 of the California Civil Code,
which reads in full as follows:
"A General Release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor."
(f) By signing this Release and the Letter Agreement and by
making the payments and providing the benefits contemplated by the Letter
Agreement, the Company does not admit any liability, wrongdoing or fault and
expressly denies any such liability, wrongdoing or fault.
3. Confidentiality; Non-Disparagement.
(a) Except to the extent required by law, including SEC
disclosure requirements, the Employee and the Company each agrees to keep the
terms of this Release confidential, except that Employee may advise his or her
family and confidential advisors and the Company may advise its directors and
those officers who have a legitimate need to know.
(b) Employee will not at any time knowingly reveal to any person
or entity any of the trade secrets (as that term is defined in the California
Uniform Trade Secrets Act and referred to below as "Trade Secrets") of the
Company or the Company Affiliates or of any third party which the Company is
under an obligation to keep confidential (including but not limited to Trade
Secrets or confidential information respecting inventions, products, designs,
methods, know-how, techniques, systems, processes, software programs, works of
authorship, customer lists, projects, plans and proposals), and Employee shall
keep secret all Trade Secrets of the Company and those of Company Affiliates and
shall not use or attempt to use any such Trade Secrets in any manner which
injures or causes loss or may reasonably be calculated to injure or
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cause loss whether directly or indirectly to the Company or the Company
Affiliates. These restrictions contained in this sub-paragraph (b) shall not
apply to: (i) information that at the time of disclosure is in the public domain
through no fault of Employee; (ii) information received from a third party
outside of the Company that was disclosed without a breach of any
confidentiality obligation; (iii) information approved for release by written
authorization of the Company or the Company Affiliate; or (iv) information that
may be required by law or an order of the court, agency or proceeding to be
disclosed; provided, Employee shall provide the Company notice of any such
required disclosure once Employee has knowledge of it and will help the Company
at the Company's expense to the extent reasonable to obtain an appropriate
protective order.
(c) Employee represents that Employee has not taken, used or
knowingly permitted to be used any notes, memorandum, reports, lists, records,
drawings, sketches, specifications, software programs, data, documentation or
other materials of any nature relating to any matter within the scope of the
business of the Company, the Company Affiliates or their partner companies or
concerning any of its dealings or affairs otherwise than for the benefit of the
Company or the Company Affiliates. Employee shall not, after his or her
termination of his or her employment, use or knowingly permit to be used any
such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of the Company, the Company Affiliate or client of the same,
as the case may be, and that immediately upon the effectiveness of Employee's
resignation from employment, Employee shall deliver all of the foregoing, and
all copies thereof, to the Company, at its main office.
(d) In accordance with normal ethical and professional
standards, the Company and Employee agree that they shall not in any way engage
in any conduct or make any statement that would defame or disparage the other,
or make to, or solicit for, the media or others, any comments, statements
(whether written or oral), and the like that may be considered to be derogatory
or detrimental to the good name or business reputation of either party. It is
understood and agreed that the Company's obligation under this paragraph extends
only to the conduct of the Company's senior officers. The only exception to the
foregoing shall be in those circumstances in which Employee or the Company is
obligated to provide information in response to an investigation by a duly
authorized governmental entity or in connection with legal proceedings.
4. General.
(a) Employee understands that this Release is revocable by
Employee for a period of seven (7) days following execution of the Release. This
Release shall not become effective or enforceable until this seven (7) day
revocation period has ended. In the event that this Release is revoked by
Employee, Employee acknowledges his understanding that the provisions of Section
2(d) of the Letter Agreement will not be effective but that all of the other
provisions of the Letter Agreement will be effective.
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(b) Employee has carefully read and fully understands all the
provisions of the Notice and the Release which set forth the entire agreement
between Employee and the Company, and Employee acknowledges that Employee has
not relied upon any representation or statement, written or oral, not set forth
in this document.
(c) Employee agrees that any breach of this Release or
corresponding Letter Agreement by Employee will cause irreparable damage to the
Company and that in the event of such breach the Company shall have, in addition
to any and all remedies of law, the right to an injunction, specific performance
or other equitable relief to prevent the violation of my obligations hereunder.
(d) No term or condition set forth in this Release may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Employee and a duly authorized officer of the
Company.
(e) Any waiver by the Company of a breach of any provision of
this Release shall not operate or be construed as a waiver of any subsequent
breach of such provision or any other provision hereof.
IN WITNESS WHEREOF, the parties have executed this Release as of the
date written above.
Dated:
------------------------- -----------------------------------------
XXXXXXX X. XXXXXXXXXX, M.D.
CHROMAVISION MEDICAL SYSTEMS, INC.
Dated:
-------------------------
By:
--------------------------------------
Title: President
and Chief Executive Officer
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