Exhibit 10.14
September 17, 1997
Xx. Xxxxxxx X. Xxxxxxxxxx
00-00 Xxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Dear Rich:
This letter will confirm our agreement with respect to (i) your decision to
resign as an officer of Unilab Corporation ("Unilab" or the "Company") and (ii)
your continued relationship as a consultant to the Company.
You will voluntarily resign as the Company's Senior Vice President-Finance,
effective as of January 1, 1998 (the "Effective Date"). You will continue on the
Company's payroll at your current salary and benefits until the Effective Date.
In addition, as of the date hereof, you will become a director of the Company,
as previously approved by the Company's Board of Directors. In full satisfaction
of all payments or obligations due or owed to you under the terms of your
Employment Agreement, dated November 10, 1993, as amended or supplemented by the
Letter Agreement, dated July 25, 1996, thereto (collectively, the "Employment
Agreement"):
1. As noted above, you will remain on the Company's payroll through January 1,
1998 at your current base annual salary of $247,500.
2. The expiration dates of the options to purchase 695,000 shares of Unilab
Common Stock pursuant to the Stock Option Agreements between you and the
Company dated October 20, 1992 (with respect to 150,000 shares), February 25,
1994 (with respect to 50,000 shares), January 1, 1995 (with respect to 35,000
shares), May 1, 1995 (with respect to 150,000 shares), February 27, 1996
(with respect to 35,000 shares), April 28, 1997 (with respect to 75,000
shares), and April 28, 1997 (with respect to 200,000 shares) (collectively,
the "Options") shall in each case remain as the date that is ten years after
the respective grant dates thereof, rather than remaining exercisable for
only one year following termination of employment. All such Options shall
become fully vested and freely transferable to your immediate family or
trusts for their benefit in accordance with the amendments to such Stock
Option Agreements. In addition, you will be presumed to have met the
requisite performance objectives with respect to the bonus guidelines
specified in that certain memo to you from Xxxxx Xxxxxx, dated May 12, 1997
(the "Bonus"), thereby permitting issuance to you of such Bonus promptly
after completion of the 1997 fiscal year.
3. As more fully set forth in the consulting agreement, dated as of the date
hereof, between you and the Company (the "Consulting Agreement"), effective
as of January 1, 1998 you will become a consultant to the Company. Your
consulting duties will primarily consist of (i) guidance and oversight of
investor relations, (ii) assistance with continued development of the
Internet web site, (iii) an advisory role for the new Billing System project
and (iv) support for strategic financing and M&A activity. In consideration
for your consulting activities, you will receive a base consulting fee of
$5,000 per month. The initial term of the Consulting Agreement will be one
year, with automatic one year renewals unless earlier terminated in
accordance with the terms of the Consulting Agreement.
4. As promptly as practicable after January 1, 1998, you will be paid a lump sum
cash payment equal to the amount accrued in your deferred compensation
account through January 1, 1998.
5. Effective as of January 1, 1998 all amounts accrued under your Executive
Retirement Plan account (the "SERP Account") shall be deemed fully vested.
However, amounts in the SERP Account shall be accrued and distributed only in
accordance with the provisions of the SERP.
6. You will be provided with use of office space at the Company's offices
located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx through the October
14, 1998 termination date of the lease (the "NJ Lease Expiration Date") for
such office space (or comparable office space, comparably priced, in New
Jersey or New York, if that office is closed prior to October 14, 1998).
7. You will be provided with secretarial and administrative services (through
the continued use at Unilab's expense of your current secretary) through the
NJ Lease Expiration Date.
8. You will receive continuation for 18 months from and after January 1, 1998 of
the same level of medical, hospitalization, dental, life, short- and
long-term disability insurance coverage and accidental death and
dismemberment travel accident coverage to which you would have been entitled
if you had remained a full-time senior executive of the Company or, if such
continued coverage under the Company's benefit plans is not available,
comparable coverage under alternate plans, or reimbursement of your costs
incurred if you independently enroll in comparable, alternate plans after the
Company fails to provide you with the coverage required hereunder.
09. During the time you are an employee of or consultant to Unilab, you will be
entitled to reimbursement of normal and approved business expenses incurred
in connection with your Unilab related business activities.
00.Xxx will be entitled to payment or reimbursement of up to $2,500 of expenses
associated with moving certain personal possessions back to the East Coast.
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11.Title of the car you currently drive on the East Coast will be transferred
to you promptly after the date hereof, free and clear of all liens and
encumbrances; provided, however, the Company shall have the option to instead
provide you with continued use of such car through the date that is 18 months
after the date hereof, or for any portion thereof. If the Company elects not
to transfer title to you immediately, you shall also be entitled to receive
payment or reimbursement of expenses in connection with the use, maintenance,
insurance, registration, tax or imputed tax and repair of or relating to that
car until the date of transfer of title; provided, that in such event, (i)
you will reimburse Unilab for the cost of registration of the car and (ii)
from and after January 1, 1998, even if title has not been transferred to
you, you will be responsible for payment of routine maintenance and repair
and registration costs for the vehicle, while the Company will continue to
cover insurance costs.
00.Xx noted above, as of the date hereof you are becoming a director of the
Company. So long as you remain on the Company's payroll pursuant to Paragraph
1 above, you will not be entitled to receive any director fees. From and
after the date you leave the Company's payroll and remain as a director you
will be entitled to receive directors fees under the Company's standard
policy.
13.The restrictions on 25,000 restricted shares of Unilab common stock granted
to you pursuant to the Restricted Stock Agreement, dated as of May 1, 1995
shall lapse in accordance with Amendment No. 1 to the Restricted Stock
Agreement and none of such shares shall be deemed forfeited by termination of
your employment.
This letter agreement will be governed by, and construed in accordance with, the
laws of the State of California. Any dispute or controversy arising under or in
connection with this letter agreement shall be settled exclusively by
arbitration in California, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. If you prevail in any such
arbitration, you shall be paid or reimbursed by the Company an amount equal to
the costs of such arbitration incurred by you, including attorneys' fees.
In consideration for the foregoing, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, you agree to the
following:
For yourself and your heirs, executors, administrators, representatives,
attorneys, successors and assigns (hereinafter collectively referred to as
"Releasor"), you hereby release and forever discharge Unilab, its divisions,
subsidiary corporations, affiliates, successors, and assigns, and its and their
respective present and former directors, officers, employees, stockholders,
agents, representatives, attorneys, and accountants (collectively referred to as
"Releasees") from all manner of action, cause, and causes of action and suits
which Releasor now has, ever had, or may have against Releasees, for, upon or by
reason of any matter, cause, omission, act or thing whatsoever, including,
without limitation, any cause of action you have, may have or will have under
your Employment Agreement occurring in whole or in part on or at any time from
the
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commencement of your employment with Unilab through the date hereof, that
directly or indirectly arises out of or is related to your employment with
Releasees, including, without limitation, any claim for age discrimination
arising out of 29 U.S.C. ss. 621, et seq. Or Cal. Gov't. Code ss. 12940 et seq.
For the purpose of implementing a full and complete release and discharge of
Releasees, you expressly acknowledge that this letter agreement is intended to
include in its effect, without limitation, all claims and actions which you do
not know or suspect to exist in your favor at the time of execution hereof, that
this letter agreement contemplates the extinguishment of any such claim, claims
or action, and that all rights under Section 1542 of the California Civil Code
are hereby expressly waived. Section 1542 of the Civil Code provides:
"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."
The foregoing release will not, however, constitute a release of Unilab's
obligations under this letter agreement or under the Consulting Agreement, your
Stock Option Agreements, as amended, or your Restricted Stock Agreement, as
amended, nor will it constitute a release of any indemnification obligations
that Unilab may have in respect of events occurring prior to the Effective Date
or in respect of your services as a director of Unilab.
The Company's obligations to indemnify you and to advance expenses, as provided
in Section 13 of your Employment Agreement and the Company's by-laws and charter
as of the date hereof shall remain in full force and effect. The Company agrees
that you shall be covered to the same extent as the executive officers and
directors of the Company in all director and officer liability insurance
coverage the Company maintains from time to time.
For itself and its divisions, subsidiary corporations, affiliates, successors
and assigns, the Company hereby releases and forever discharges you and your
heirs, executors, administrators, representatives, successors and assigns from
all manner of action, cause and causes of action and suits which it now has,
ever had or may have against you and such other persons, for, upon or by reason
of any matter, cause, omission, act or thing whatsoever occurring in whole or in
part, on or at any time prior to the date hereof, that directly or indirectly
arises out of or is related to your employment with the Company (subject only to
causes arising out of your fraud or willful malfeasance and to your obligations
under the $150,000 promissory note payable to the Company).
This letter agreement shall not in any way be construed as an admission by
Unilab that it or any of its agents, employees or representatives have acted
wrongfully with respect to you in violation of the common law or in violation of
any federal, state or local statute or regulation or of any of your rights or of
any other person, and Unilab specifically disclaims any liability to or improper
conduct toward you or any other person on the part of itself and its employees,
agents and representatives.
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You acknowledge and agree that you have been advised to consult with an attorney
prior to executing this waiver and release; that to the extent you have desired
you have availed yourself of that right; that you have carefully read and
understand all of the provisions of this waiver and release; that you were given
at least twenty-one (21) days in which to consider this agreement; that you may
revoke this waiver and release within seven (7) days after you have executed it;
and that you are voluntarily entering into the agreements set forth herein. The
Company agrees to prepare, execute, deliver and file all documents and
instruments as may be necessary or advisable to effect the terms of this
agreement.
This agreement, together with the Restricted Stock Agreement, as amended, the
Stock Option Agreements, as amended, and the Consulting Agreement, shall
constitute the entire agreement and understanding between you and the Company
with respect to your employment or retention by the Company and shall supersede
all prior agreements and understandings, including, without limitation, the
Employment Agreement; provided, however, that after the Effective Date, Sections
8, 9 and 13 of your Employment Agreement shall continue to remain in full force
and effect.
This agreement may only be amended or modified in a writing signed by the
Company and you.
This letter agreement shall be binding upon and shall inure to the benefit of
any successors or assigns of Unilab, whether by merger, consolidation, sale of
all or substantially all of the assets or otherwise.
You and Unilab each agrees to keep the terms, amount and existence of this
letter Agreement completely confidential to the greatest extent consistent with
the law.
Please sign both copies of this letter on the line below to acknowledge your
agreement, retain one for your files and return the other to Unilab to the
attention of the Corporate Secretary.
Rich, it has truly been a pleasure working with you. Your tireless energies and
indefatigable enthusiasm have made my early tenure with Unilab a terrific one. I
greatly appreciate all your efforts on Unilab's behalf and look forward to our
continuing relationship.
Sincerely yours, Acknowledged and agreed:
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxxx
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