Exhibit 10.24
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into as of September 1,
2000 by and between Specialty Laboratories, Inc., a California Company (the
"Company"), and Xxxx X. Xxxxxxxxx ("Executive"), and is effective upon approval
of the Compensation Committee of The Board of Directors.
1. DUTIES AND RESPONSIBILITIES.
A. Executive shall serve as the Company's Vice
President, Sales or such other title or position as may be designated from time
to time by the Company's Chief Executive Officer. Executive shall report to and
perform the duties and responsibilities assigned to him by the Company's
President, or such other person as may be designated by the Company's Board Of
Directors.
B. Executive agrees to devote his full time and
attention to the Company, to use his best efforts to advance the business and
welfare of the Company, to render his services under this Agreement fully,
faithfully, diligently, competently and to the best of his ability, and not to
engage in any other employment activities.
C. Executive shall be based at the Company's office
located in Santa Monica, California, but Executive shall be required to travel
to other geographic locations in connection with the performance of his
Executive duties.
2. PERIOD OF EMPLOYMENT.
A. Executive's employment with the Company shall be
governed by the provisions of this Agreement for the period commencing September
1, 2000 and continuing until this Agreement terminates pursuant to written
notification by either the Company or Executive, which notification may occur at
any time for any reason. The period during which the Executive provides services
to the Company pursuant to this Agreement shall be referenced in this Agreement
as the "Employment Period."
3. CASH COMPENSATION.
A. Executive's initial Base Salary shall be Two Hundred
Forty Eight Thousand, Two Hundred Sixty Eight Dollars ($248,268) per year
payable in accordance with the Company's standard payroll schedule. Executive's
compensation shall be subject to periodic review by the Company, and may be
increased or decreased in the Company's discretion.
B. For each fiscal year during the Employment Period,
Executive shall be eligible for an incentive bonus in the Company's sole
discretion. For each full fiscal year of employment, Executive shall be eligible
for an incentive bonus of up to sixty (60%) of his annual base salary and his
performance objectives shall be set such that 100% completion of his objectives
shall entitle him to at least seventy-five percent (75%) of the bonus (or
forty-five percent (45%) of his annual base salary) ("the Incentive Bonus").
During the first year of employment, Executive shall be eligible for a pro rata
portion of the incentive bonus. The bonus
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amount will be based on the following factors: (1) the financial performance of
the Company as determined and measured by the Company's Board of Directors, and
(2) Executive's achievement of management targets and goals as set by the
Company. The bonus amount is intended to reward contribution to the Company's
performance over an entire fiscal year, and on the basis of continuing,
cumulative contribution, and consequently will be paid only if Executive is
employed and in good standing at the time of bonus payments, which generally
occurs within 45 days after the close of the Company's fiscal year. Bonus
determinations will be made in the Company's sole discretion.
C. The Company shall deduct and withhold from the
compensation payable to Executive hereunder any and all applicable Federal,
State and Local income and employment withholding taxes and any other amounts
required or authorized by Executive to be deducted or withheld by the Company
under applicable statutes, regulations, ordinances or orders governing or
requiring the withholding or deduction of amounts otherwise payable as
compensation or wages to employees.
4. EQUITY PARTICIPATION.
Separate from this Agreement and pursuant and subject to the
terms and conditions of the Company's Stock Option Plan and Stock Option
Agreement, Executive has been granted options to purchase One Hundred Twenty
Thousand Eight Hundred Eighteen (120,818) shares of the Company's common stock,
which options vest over time. Any further options will be made pursuant and
subject to the terms and conditions of the Company's Stock Option Plan and Stock
Option Agreement.
5. EXPENSE REIMBURSEMENT.
In addition to the compensation specified in Paragraph 3,
Executive shall be entitled, in accordance with the reimbursement policies in
effect from time to time, to receive reimbursement from the Company for
reasonable business expenses incurred by Executive in the performance of his
duties hereunder, provided Executive furnishes the Company with vouchers,
receipts and other details of such expenses in the form required by the Company
sufficient to substantiate a deduction for such business expenses under all
applicable rules and regulations of Federal and State taxing authorities.
6. FRINGE BENEFITS.
A. Executive shall, throughout the Employment Period, be
eligible to participate in all group term life insurance plans, group health
plans, accidental death and dismemberment plans and short-term disability
programs and other Executive perquisites which are made available to the
Company's Executives and for which Executive qualifies. Please refer to the
Company's Employee Handbook and Summary Plan Descriptions for further
information concerning these benefits.
B. Executive shall earn vacation time during the
Employment Period at the rate of three weeks per year. Vacation shall accrue and
be taken pursuant to the Company's vacation benefit policy set forth in the
Company's Employee Handbook.
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7. SEVERANCE PAY FOR EXERCISE OF THE AT-WILL CLAUSE.
Notwithstanding any of the provisions of this Agreement,
Executive's employment with the Company is at will, which means that it is not
for a specific term and may be terminated by either the Company or Executive at
any time, for any reason without advance notice. Similarly the Company may
change the terms and conditions of Executive's employment at any time, for any
reason, without advance notice.
Should the Company terminate Executive's employment for Cause,
as defined below, the Company shall have no obligation to Executive under this
Agreement other than for accrued but unpaid salary and vacation as of the date
of termination. Should the Company terminate Executive's employment other than
for Cause during the first three years of this Agreement, the Company shall have
no further obligation under this Agreement, except that the Company will
continue to pay Executive's base salary, (less, if applicable, any long-term
disability payments) for a one year period following termination of Executive's
employment on the normal payroll dates.
8. CAUSE.
For purposes of this Agreement, "Cause" shall mean a
reasonable belief by the Board of Directors that Executive has engaged in any
one of the following: (i) financial dishonesty, including, without limitation,
misappropriation of funds or property, or any attempt by Executive to secure any
personal profit related to the business or business opportunities of the Company
without the informed, written approval of the Company's Board of Directors; (ii)
refusal to comply with reasonable directives of the Executive's immediate
supervisor or Board of Directors; (iii) negligence or reckless or willful
misconduct in the performance of Executive's duties; (iv) failure to perform, or
continuing neglect in the performance of, duties assigned to Executive; (v)
misconduct which has a materially adverse effect upon the Company's business or
reputation; (vi) the conviction of, or plea of nolo contendre to, any felony or
a misdemeanor involving moral turpitude or fraud; (vii) the material breach of
any provision of this Agreement; (viii) violation of Company policies including,
without limitation, the Company's policies on equal employment opportunity and
prohibition of unlawful harassment; (ix) death of the Executive; or (x) a
disability which continues for a period in excess of 365 days. A termination as
a result of a Change in Control shall not constitute cause.
9. CHANGE IN CONTROL.
For purposes of this Agreement, "Change In Control" shall mean
any of the following transactions effecting a change in ownership or control of
the Company:
(i) a merger, consolidation or reorganization
approved by the Company's stockholders, UNLESS securities representing
more than fifty percent (50%) of the total combined voting power of the
voting securities of the successor Company are immediately thereafter
beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Company's
outstanding voting securities immediately prior to such transaction, or
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(ii) any stockholder-approved transfer or other
disposition of all or substantially all of the Company's assets, or
(iii) the acquisition, directly or indirectly, by
any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Company), of beneficial ownership
(within the meaning of Rule 13d-3 of the 0000 Xxx) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or
exchange offer made directly to the Company's stockholders.
In no event, however, shall a Change in Control be deemed to
occur in connection with any public offering of the Common Stock.
10. RESTRICTIVE COVENANTS.
During the Employment Period:
(i) Executive shall devote Executive's full time
and energy solely and exclusively to the performance of Executive's
duties described herein, except during periods of illness or vacation
periods.
(ii) Executive shall not directly or indirectly
provide services to or through any person, firm or other entity except
the Company, unless otherwise authorized by the Board in writing.
(iii) Executive shall not render any services of
any kind or character for Executive's own account or for any other
person, firm or entity without first obtaining the Company's written
consent.
Executive, however, shall have the right to perform such incidental services as
are necessary in connection with (a) Executive's private passive investments,
but only if Executive is not obligated or required to (and shall not in fact)
devote any managerial efforts which interfere with the services required to be
performed by him, or (b) Executive's charitable or community activities, or
participation in trade or professional organizations, but only if such
incidental services do not interfere with the performance of Executive's
services to the Company.
11. NON-COMPETITION DURING THE EMPLOYMENT PERIOD.
Executive acknowledges and agrees that given the extent and
nature of the confidential and proprietary information he will obtain during the
course of his employment with the Company, it would be inevitable that such
confidential information would be disclosed or utilized by the Executive should
he obtain employment from, or otherwise become associated with, an entity or
person that is engaged in a business or enterprise that directly competes with
the Company. Consequently, during any period for which Executive is receiving
payments from the Company, either as wages or as a severance benefit, including
but not limited to severance
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pay pursuant to paragraph 7, Executive shall not, without prior written consent
of the Company's Board of Directors, directly or indirectly own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by or connected in any manner with, any enterprise
which is engaged in any business competitive with or similar to that of the
Company; provided, however, that such restriction shall not apply to any passive
investment representing an interest of less than two percent (2%) of an
outstanding class of publicly-traded securities of any Company or other
enterprise which is not, at the time of such investment, engaged in a business
competitive with the Company's business.
12. NON-SOLICITATION.
During the Employment Period and for one (1) year following
termination of Executive's employment, Executive shall not encourage or solicit
any of the Company's employees to leave the Company's employ for any reason or
interfere in any other manner with employment relationships at the time existing
between the Company and its employees. In addition, Executive shall not solicit,
directly or indirectly, business from any client of the Company, induce any of
the Company's clients to terminate their existing business relationship with the
Company or interfere in any other manner with any existing business relationship
between the Company and any client or other third party.
Executive acknowledges that monetary damages may not be
sufficient to compensate the Company for any economic loss which may be incurred
by reason of his breach of the foregoing restrictive covenants. Accordingly, in
the event of any such breach, the Company shall, in addition to the termination
of this Agreement and any remedies available to the Company at law, be entitled
to obtain equitable relief in the form of an injunction precluding Executive
from continuing such breach.
13. PROPRIETARY INFORMATION.
As a condition precedent to Executive's employment with the
Company, Executive will execute the Company's standard Confidential Information
and Assignment of Inventions Agreement attached hereto as Exhibit A. Executive's
obligations pursuant to the Confidential Information and Assignment of
Inventions Agreement will survive termination of Executive's employment with the
Company.
14. SUCCESSORS AND ASSIGNS.
This Agreement is personal in its nature and the Executive
shall not assign or transfer his rights under this Agreement. The provisions of
this Agreement shall inure to the benefit of, and be binding on each successor
of the Company whether by merger, consolidation, transfer of all or
substantially all assets, or otherwise and the heirs and legal representatives
of Executive.
15. NOTICES.
Any notices, demands or other communications required or
desired to be given by any party shall be in writing and shall be validly given
to another party if served either personally or if deposited in the United
States mail, certified or registered, postage prepaid,
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return receipt requested. If such notice, demand or other communication shall be
served personally, service shall be conclusively deemed made at the time of such
personal service. If such notice, demand or other communication is given by
mail, such notice shall be conclusively deemed given forty-eight (48) hours
after the deposit thereof in the United States mail addressed to the party to
whom such notice, demand or other communication is to be given as hereinafter
set forth:
To the Company:
Human Resources Department
Specialty Laboratories, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
To Executive:
Xxxx X. Xxxxxxxxx
Current address as noted in
personnel file at Company
Any party may change its address for the purpose of receiving notices, demands
and other communications by providing written notice to the other party in the
manner described in this paragraph.
16. GOVERNING DOCUMENTS.
This Agreement along with the documents expressly referenced
in this Agreement constitute the entire agreement and understanding of the
Company and Executive with respect to the terms and conditions of Executive's
employment with the Company and the payment of severance benefits and supersedes
all prior and contemporaneous written or verbal agreements and understandings
between Executive and the Company relating to such subject matter. This
Agreement may only be amended by written instrument signed by Executive and an
authorized officer of the Company. Any and all prior agreements, understandings
or representations relating to the Executive's employment with the Company are
terminated and cancelled in their entirety and are of no further force or
effect.
17. GOVERNING LAW.
The provisions of this Agreement will be construed and
interpreted under the laws of the State of California. If any provision of this
Agreement as applied to any party or to any circumstance should be adjudged by a
court of competent jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent
permissible by law) the application of such provision under circumstances
different from those adjudicated by the court, the application of any other
provision of this Agreement, or the enforceability or invalidity of this
Agreement as a whole. Should any provision of this Agreement become or be deemed
invalid, illegal or unenforceable in any jurisdiction by reason of the scope,
extent or duration of its coverage, then such provision shall
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be deemed amended to the extent necessary to conform to applicable law so as to
be valid and enforceable or, if such provision cannot be so amended without
materially altering the intention of the parties, then such provision will be
stricken and the remainder of this Agreement shall continue in full force and
effect.
18. REMEDIES.
All rights and remedies provided pursuant to this Agreement or
by law shall be cumulative, and no such right or remedy shall be exclusive of
any other. A party may pursue any one or more rights or remedies hereunder or
may seek damages or specific performance in the event of another party's breach
hereunder or may pursue any other remedy by law or equity, whether or not stated
in this Agreement.
19. ARBITRATION.
Executive and the Company shall separately execute an
Arbitration Agreement in the form attached hereto as Exhibit B which, among
other things shall provide for arbitration of all claims which arise out of
Executive's employment under the terms of this Agreement. This Arbitration
Agreement will survive the termination of Executive's employment with the
company.
20. NO WAIVER.
The waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any later
breach of that provision.
21. COUNTERPARTS.
This Agreement may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
Specialty Laboratories, Inc.
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By: Xxxxx X. Xxxxx M.D., Ph.D.
Title: Chairman and CEO
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Xxxx X. Xxxxxxxxx
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