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EXHIBIT 10.27
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 8th day of September, 1998, by and between QUIDEL CORPORATION, a
Delaware corporation ("QUIDEL") and XXXXXXX X. XXXXXXXX, an individual
("XXXXXXXX").
BACKGROUND
X. XXXXXXXX has been employed by QUIDEL as its Vice President - Human
Resources for a number of years.
X. XXXXXXXX is voluntarily resigning as an officer of QUIDEL and each
subsidiary thereof and as a trustee of any and all benefit plans.
C. QUIDEL and XXXXXXXX wish to agree upon an orderly executive
transition plan that enables QUIDEL, on an interim basis, to have the benefits
of XXXXXXXX'x continuing advice and input regarding important corporate matters.
AGREEMENT
1. RESIGNATION AS OFFICER. Concurrent with the execution and delivery
of this Agreement, XXXXXXXX has executed and delivered to QUIDEL his
resignation, effective immediately, of all positions as an officer of QUIDEL and
each subsidiary thereof (other than the position expressly provided for herein)
and as a trustee of any and all benefit plans of QUIDEL and its affiliates. The
form of such resignation is in the form attached as Exhibit A and incorporated
herein by this reference.
2. FUTURE EMPLOYMENT. XXXXXXXX shall continue to be employed by QUIDEL
as "Special Assistant to the President" from the date hereof until December 31,
1998. On January 1, 1999, all employment and/or consulting relationships between
the parties are forever terminated. Except as provided in Section 4 and Section
7 hereof, nothing herein shall prohibit or limit XXXXXXXX'x right, on and after
the date hereof, to accept employment and/or consulting relationships with other
third parties as long as XXXXXXXX makes himself reasonably available from time
to time from the date hereof until December 31, 1998 to promptly respond to and
fulfill the reasonable requests for information and assistance from QUIDEL's
President and Chief Executive Officer.
3. RESPONSIBILITIES. On and after the date hereof, XXXXXXXX shall
report for his duties directly to QUIDEL's President and Chief Executive
Officer. The President and Chief Executive Officer shall determine XXXXXXXX'x
reasonable duties and responsibilities. Notwithstanding anything to the contrary
herein, in the event XXXXXXXX is unable to carry out his responsibilities
hereunder because of his death or disability, such inability shall not be deemed
a breach or termination of this Agreement and XXXXXXXX or
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his estate, as applicable, shall continue to enjoy all of the benefits provided
herein as though XXXXXXXX were not disabled or deceased.
4. NON-COMPETITION/NON-SOLICITATION.
(a) Non-Competition. From the date hereof until December 31, 1998,
XXXXXXXX covenants and agrees that he shall not, directly or indirectly, have
any interest in or enter into or maintain any relationship with (whether as
director, officer, employee, agent, representative, security holder, consultant,
advisor or otherwise) any of the entities listed on Exhibit B attached hereto
and incorporated by this reference or any affiliate of such listed entities. In
the event of any breach by XXXXXXXX of this Section 4(a), QUIDEL shall have the
right to immediately terminate this Agreement upon written notice. In the event
of such early termination, XXXXXXXX and QUIDEL expressly agree that (i) QUIDEL
shall have no further obligation or liability to make the cash payments or
provide the benefit coverages contemplated by Section 5 below for or
attributable to any period after the date of such early termination, and (ii) no
portion of XXXXXXXX'x unvested Options shall enjoy the benefit of vesting
acceleration on December 31, 1998 as provided in Section 6 below.
(b) Non-Solicitation of Employees. From the date hereof until the
second (2nd) anniversary date hereof, XXXXXXXX covenants and agrees that he
shall not, directly or indirectly, by or for himself, or as the agent of
another, or through others, in any way solicit or induce, or attempt to solicit
or induce, any employee, officer, representative, consultant or other agent of
QUIDEL or any subsidiary thereof (a "QUIDEL Person") to leave the employ of or
other relationship with QUIDEL or such subsidiary or otherwise interfere with
the employment or other relationship between such person and QUIDEL or any
subsidiary thereof. Notwithstanding the foregoing, XXXXXXXX shall have no
liability under this Section 4(b) with respect to any QUIDEL Person who leaves
the employ of or other relationship with QUIDEL or any subsidiary thereof if
such QUIDEL Person does not, within six (6) months thereafter, enter into any
employment or consulting relationship with XXXXXXXX or any entity in which
XXXXXXXX has an employment, director, representative, consulting, or investment
role.
5. CASH COMPENSATION AND BENEFITS. Subject to XXXXXXXX'x fulfillment of
his obligations under this Agreement (including without limitation those set
forth in Section 4(a) and Section 7 hereof but subject to the last sentence of
Section 3), the parties agree as follows:
(a) Base Salary. QUIDEL will continue to pay to XXXXXXXX a base salary
equal to his current salary rate (i.e., $11,750 per month) through December 31,
1998. QUIDEL will make tax withholdings from such compensation as required by
law and consistent with past practice. To the extent permitted under the
applicable plans, XXXXXXXX will continue to be eligible for group insurance
programs and benefits (life, healthcare, long-term disability, flex (Section
125) and 401(k)) during this period.
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(b) Severance. QUIDEL will pay to XXXXXXXX as xxxxxxxxx compensation
monthly payments equal to his current salary rate (i.e., $11,750 per month) from
January 1, 1999 through August 31, 1999. QUIDEL will make tax withholdings from
such compensation as required by law and consistent with past practice. To the
extent permitted under the applicable plans, XXXXXXXX will continue to be
eligible for group insurance programs and benefits (life, healthcare, long-term
disability, flex (Section 125) and 401(k)) during this period.
(c) Incentive Plan. XXXXXXXX shall not be eligible to participate in or
receive payments pursuant to any incentive or bonus programs adopted for any
period commencing after March 31, 1998.
(d) Medical Insurance. QUIDEL shall, at its own expense and until the
first anniversary of the date hereof, continue to provide to XXXXXXXX and his
dependents who are currently covered under QUIDEL's insurance program medical,
vision and dental benefits at the same levels and on the same terms as XXXXXXXX
and his qualifying dependents enjoy and receive as of the date hereof; provided,
however, that (i) these benefits shall be earlier terminated or reduced, as
applicable, if, when and to the extent XXXXXXXX receives concurrent coverage
comparable to current coverage through another program, (ii) XXXXXXXX shall be
responsible for any and all taxes if the value of such benefits must be included
in his income, and (iii) the levels and nature of such benefits may be modified
by QUIDEL if, when and to the same extent modifications to such benefits are
made applicable to all other executive officers of QUIDEL.
(e) Vacation/Other Benefits. No vacation benefits or, except as
expressly provided herein, other employee-type benefits shall accrue to or for
XXXXXXXX from and after the date hereof. All of XXXXXXXX'x accrued but unused
vacation up to the date hereof shall be paid to him, less applicable
withholdings required by law, within two (2) days of the date hereof.
(f) Outplacement. QUIDEL shall also pay for up to a maximum of six (6)
months of the reasonable expenses of Drake Beam Xxxxx, an executive outplacement
service, it being understood that QUIDEL shall in no event have an obligation to
pay for any such services for any period after March 31, 1999. QUIDEL and
XXXXXXXX will also develop and make available for XXXXXXXX'x use a mutually
agreeable letter of reference.
(g) Professional Fees. QUIDEL will reimburse XXXXXXXX for any legal
and/or tax advisory fees and costs -- up to an aggregate maximum of $1,500 --
incurred by XXXXXXXX in connection with this Agreement and the matters
contemplated herein.
(h) Computer. QUIDEL will permit XXXXXXXX to acquire the laptop
computer previously used by XXXXXXXX at a price reasonably determined as fair by
the Company.
(i) No Offsets. Except as set forth in subparagraph (d) hereof, the
amounts payable to XXXXXXXX pursuant to this Agreement shall not be subject to
reduction or
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offset as a result of compensation or benefits received by XXXXXXXX attributable
to other employment and/or consulting arrangements XXXXXXXX may enter into with
third parties on or after the date hereof.
(j) No Other Amounts. Except as expressly provided in this Agreement
and pursuant to the Options referred to in Section 6 below, XXXXXXXX
acknowledges and agrees that he is entitled to no further compensation or
benefits from QUIDEL, including without limitation any further severance
payments.
6. OPTIONS. The following schedule sets forth certain particulars as to
the issued and outstanding stock options (the "Options") that have been granted
to and are currently held by XXXXXXXX:
SHARES UNDERLYING
GRANT DATE EXPIRATION DATE EXERCISE PRICE ($/SH) OPTION (#) SHARES EXERCISABLE (#)
---------- --------------- --------------------- ----------------- ----------------------
03/08/91 03/08/01 $5.500 14,120 14,120
02/18/92 03/18/02 4.625 5,000 5,000
04/29/93 04/29/03 4.500 20,000 20,000
04/27/94 04/27/04 4.125 15,000 15,000
05/11/95 05/11/05 3.625 25,000 0
07/30/96 07/30/06 3.625 25,000 0
04/29/97 04/29/07 2.875 25,000 0
07/28/98 07/28/08 3.375 13,101 0
07/28/98 07/28/08 3.375 1,899 0
------- ------
TOTALS 144,120 54,120
======= ======
Subject to XXXXXXXX'x fulfillment of his obligations under this
Agreement (including without limitation the obligations set forth in Section
4(a) and Section 7 hereof but subject to the last sentence of Section 3), all
unvested Options set forth above which have not vested prior to December 31,
1998 -- except for the last two grants of Options covering an aggregate of
15,000 shares that were granted on 7/28/98 (the "Excluded Options") -- shall
fully and automatically vest and become exercisable on December 31, 1998. (The
Excluded Options shall not be accelerated and shall therefore not become
exercisable.) QUIDEL represents and warrants that the foregoing vesting
acceleration has been authorized by the Compensation Committee of the Board of
Directors acting pursuant to its authority as set forth in Section 4(b)(vi) of
QUIDEL's 1990 Employee Stock Option Plan, as amended (the "Plan"). XXXXXXXX
understands and accepts that the foregoing vesting acceleration may have the
effect of disqualifying Options originally granted as Incentive Stock Options so
that such Options shall, for federal and state tax purposes, be treated as
Non-Qualified Stock Options. XXXXXXXX further acknowledges that all required tax
withholdings attributable to his exercise of the Options will either be tendered
by him at the time of his exercise or will be withheld as part of the exercise
authorization provided herein.
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For all Options other than Incentive Stock Options (if any), and
pursuant to the Compensation Committee's authorization pursuant to Section
8(a)(iii) of the Plan, the consideration payable by XXXXXXXX to QUIDEL upon
exercise of the Options and representing the aggregate exercise price may -- at
XXXXXXXX'x election -- be payable in or by:
(1) cash;
(2) check;
(3) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to
QUIDEL the amount of sale or loan proceeds required to pay the
exercise price (in which event QUIDEL shall pay for or
reimburse XXXXXXXX for all reasonable broker commissions
attributable to such transaction); or
(4) any combination of the foregoing.
Similarly, the amount of tax required to be withheld by the Company as a result
of exercise of the Options may also be effected by one or any combination of the
foregoing at the election of XXXXXXXX.
Except as otherwise provided in this Agreement, all Options shall
continue to be subject to and governed by the terms and conditions of the
relevant Stock Option Agreements and the Plan. Such terms include the period of
time within which XXXXXXXX must exercise his Options after termination of his
employment with QUIDEL (i.e., 90 calendar days). Subject to the preceding
sentences, XXXXXXXX may exercise already vested Options at any time or from time
to time during the term of this Agreement.
7. INVENTION AND CONFIDENTIALITY AGREEMENT. Nothing herein shall be
deemed to terminate or limit XXXXXXXX'x continuing obligations under that
certain Invention and Confidential Information Agreement, dated as of April 15,
1987, a copy of which is attached hereto as Exhibit C and incorporated herein by
this reference (the "Prior Agreement"). XXXXXXXX acknowledges the fundamental
importance of the Prior Agreement to QUIDEL and agrees to strictly honor his
obligations thereunder.
8. GENERAL RELEASES.
(a) By XXXXXXXX. Except as provided in Section 8(c) herein, XXXXXXXX
hereby irrevocably and unconditionally releases, acquits and forever discharges
QUIDEL and all of its current, former and future subsidiaries, affiliates,
divisions, successors, predecessors, assigns, stockholders, directors, officers,
employees, agents, representatives, attorneys, accountants and all persons
acting by, through, under or in concert with any of them (collectively, the
"QUIDEL Releasees"), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including attorneys' fees
and
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costs) actually incurred of any nature whatsoever, known or unknown, suspected
or unsuspected ("Claim" or "Claims") which XXXXXXXX now has, owns or holds, or
claims to have, own or hold, or which XXXXXXXX at any time heretofore had, owned
or held, or claimed to have had, owned or held, or which XXXXXXXX at any time
hereafter may have, own or hold, or claim to have, own or hold, against any of
the QUIDEL Releasees relating to any event, act or omission that has occurred
prior to or as of the date of this Agreement.
(b) By QUIDEL. Except as provided in Section 8(c) herein, QUIDEL hereby
irrevocably and unconditionally releases, acquits and forever discharges
XXXXXXXX and all of his heirs, successors, agents, representatives, attorneys,
accountants and all persons acting by, through, under or in concert with any of
them (collectively, the "XXXXXXXX Releasees"), from any and all known or
unknown, suspected or unsuspected, Claims which QUIDEL now has, owns or holds,
or claims to have, own or hold, or which QUIDEL at any time heretofore had owned
or held, or claimed to have had, owned or held, or which QUIDEL at any time
hereafter may have, own or hold, or claim to have, own or hold, against any of
the XXXXXXXX Releasees relating to any event, act or omission that has occurred
prior to or as of the date of this Agreement.
(c) No Release of Indemnity Rights. The releases provided herein do not
include any release of any right of indemnity or contribution as between
XXXXXXXX and/or QUIDEL in the event that any person subsequently brings an
action against XXXXXXXX and/or QUIDEL pertaining to or arising from, in whole or
in part, XXXXXXXX'x performance of his duties as an officer or employee of
QUIDEL, or any act or omission alleged on the part of XXXXXXXX in those
capacities. All such rights of indemnity or contribution, whether arising under
the California Labor Code, the Articles of Incorporation or Bylaws of Quidel,
common law, or otherwise are expressly reserved by both parties. QUIDEL further
agrees that it will maintain, for the term of this Agreement, directors and
officers insurance coverage providing the same or greater protection for
XXXXXXXX as existed on September 1, 1998.
(d) Waiver. Except as provided in Section 8(c) herein, XXXXXXXX and
QUIDEL each expressly waives and relinquishes all rights and benefits afforded
by Section 1542 of the Civil Code of the State of California, and does so
understanding and acknowledging the significance and consequence of such
specific waiver of Section 1542. Section 1542 of the Civil Code of the State of
California states 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."
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge of the QUIDEL
Releasees and the XXXXXXXX Releasees, XXXXXXXX and QUIDEL each expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all Claims which he or it
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does not know or suspect to exist in his or its favor at the time of execution
hereof, and that this Agreement contemplates the extinguishment of any such
Claim or Claims.
XXXXXXXX and QUIDEL each represents and warrants to the QUIDEL
Releasees and the XXXXXXXX Releasees, respectively, that he or it has not
heretofore assigned or transferred, or purported to assign or transfer, to any
person or entity, any Claim or any portion thereof, or interest therein, and
agrees to indemnify, defend and hold the QUIDEL Releasees and the XXXXXXXX
Releasees, respectively, harmless from and against any and all Claims, based on
or arising out of any such assignment or transfer, or purported assignment or
transfer, of any Claims or any portion thereof or interest therein.
XXXXXXXX agrees that the releases contained herein apply without
limitation to any and all rights, claims and remedies he may have under the Age
Discrimination in Employment Act and the Older Workers Benefit Protection Act.
In accordance with those laws, XXXXXXXX will have 21 days from receipt of this
Agreement to consider this Agreement, he shall have 7 days following the signing
of this Agreement to revoke it in writing, and this Agreement shall not be
effective or enforceable until the revocation period has expired. XXXXXXXX may,
if he so desires, waive the full 21 day period to consider this Agreement.
9. MISCELLANEOUS.
(a) Entire Agreement; Modification. This Agreement and the Exhibits
attached hereto constitute the full and entire understanding and agreement of
the parties hereto with regard to the subjects hereof, and supersede all prior
agreements or understandings, written or oral, between the parties with respect
to the subject hereof. This Agreement may not be amended or modified except by a
written instrument signed by both of the parties hereto.
(b) Governing Law. This Agreement shall be governed by the internal
laws of the State of California, except to the extent to which the laws of the
United States may be applicable.
(c) Severability. In the event any provision of this Agreement is
invalid, void, illegal, or unenforceable, the remaining provisions hereof
nevertheless will continue in full force and effect without being impaired or
invalidated in any way.
(d) Notices. All notices and other communications required or permitted
under this Agreement, other than routine operational communications, will be in
writing and will be deemed to have been duly given, made and received only when
personally delivered or delivered by Federal Express, United Parcel Service or
other nationally recognized courier service, or three (3) calendar days after
having been deposited in the United States mail, certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
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If to QUIDEL: Quidel Corporation
00000 XxXxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President and Chief
Executive Officer
If to XXXXXXXX: Xxxxxxx X. Xxxxxxxx
00000 Xxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Any party may change the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
(e) Further Assurances. Each party agrees to promptly execute,
acknowledge and deliver such other and further instruments, writings and
documents as may reasonably be requested in writing by the other party to carry
out this Agreement. Each party agrees to use all reasonable efforts and to
exercise good faith in fulfilling its or his obligations under this Agreement.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
(g) Voluntary Agreement/Conflicts Waiver. XXXXXXXX represents and
warrants (i) that he has carefully read the terms of this Agreement and fully
understands and accepts these terms, and (ii) that he has had full and adequate
opportunity and time, and has been advised by QUIDEL, to consult with counsel of
his choosing prior to executing this Agreement.
(h) Construction. The language herein shall be construed simply and in
accordance with its plain meaning and shall not be construed or interpreted
strictly for or against any party hereto, regardless of the source of
draftsmanship.
(i) Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and their representatives, heirs, administrators,
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
QUIDEL CORPORATION XXXXXXX X. XXXXXXXX
By:_______________________________ By:_________________________________
Xxxxx xx Xxxxx Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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EXHIBIT A
TO: QUIDEL CORPORATION BOARD OF DIRECTORS
FROM: XXXXXXX X. XXXXXXXX
RE: RESIGNATION
Please accept this notice as my resignation, effective immediately, of
all positions as an officer or employee of QUIDEL CORPORATION and any subsidiary
thereof (other than the position contemplated by my Employment Agreement dated
of even date herewith) and all positions as a trustee of any and all benefit
plans of QUIDEL CORPORATION or any subsidiary thereof.
September 8,1998 ____________________________________
Xxxxxxx X. Xxxxxxxx
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EXHIBIT B
DIRECT COMPETITORS
Applied Biotech, Inc.
Pharmatech
Smithkline Diagnostics/Xxxxxxx Xxxxxxx Primary Care Division
Wyntek Diagnostics, Inc.
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EXHIBIT C
INVENTION AND CONFIDENTIALITY AGREEMENT
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