Exhibit 10.2
July 10,
2008
CONFIDENTIAL
Michael
I. Schaffer, Ph.D.
c/o Psychemedics Corporation
5832 Uplander Way
Culver City, CA 90230-6608
Dear
Mike:
This letter sets forth the agreements
we have made regarding your employment with Psychemedics
Corporation (the “Company”).
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1. |
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If at any time after the effective date hereof and prior to the
date which is five (5) years following the date hereof, your
employment is terminated by the Company without “Cause”
(as defined in paragraph 13 below), or you voluntarily terminate
your employment for “Good Reason” (as defined in
paragraph 13 below), in either case at the time of, or within
twelve (12) months following, a “Change of Control of
the Company” (as defined in paragraph 13 below), then you
will continue to be paid monthly an amount equal to your average
monthly compensation for the twelve full months preceding the date
of such termination (“Termination Pay”) for a period of
twelve (12) months from the date of such termination. For
purposes of the foregoing sentence, average monthly compensation
shall be determined with reference to the aggregate base salary and
cash bonus compensation earned by you during such period, including
any cash bonus compensation accrued for such period or any portion
of such period but not paid as of the date of such termination).
Your Termination Pay will be subject to normal deductions for
taxes, benefit plan contributions, other payroll deductions and any
amount due the Company as a result of cash advances. The Company
agrees to continue to make health insurance available to you under
such health insurance plan as the Company has in effect for so long
as you are receiving Termination Pay and so long as you contribute
such portion of the premiums for such insurance as is required of
employees under such plan. You agree, however, that if you obtain
health insurance coverage through another employer while you are
eligible to receive health insurance under this Agreement, the
Company shall no longer be required to make health insurance
available to you under this Agreement. You agree to give the
Company at least fourteen |
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(14) days prior written notice of the termination of your
employment in the event of your voluntary termination without Good
Reason. You shall not be entitled to Termination Pay as a result of
termination by reason of your death or “Disability” (as
defined in paragraph 13 below) following a Change of Control of the
Company. |
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2. |
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Notwithstanding any other provision of this Agreement, the
Termination Pay contemplated to be paid to you under certain
circumstances set forth in this Agreement shall only be paid in
consideration of the execution and delivery by you of a release
reasonably satisfactory to the Company waiving all claims you, your
heirs, or legal representatives have or may have against the
Company or any of its shareholders, officers, directors, employees
or agents with respect to your employment or the termination
thereof, or any other claim. |
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3. |
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You acknowledge that, as the Company’s Vice President,
Laboratory Operations, you are in possession of specialized
information concerning the total operations, conduct, management,
and strategy of the Company, as well as proprietary information
concerning the Company’s products and services and that the
applicability of your knowledge of these matters is applicable to
all geographic areas in which the Company does business. You
further acknowledge that the Company has a legitimate business
interest in protecting its hair testing business from unfair
competition. |
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4. |
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You shall not, without the prior and express written approval
of the Company, either during or subsequent to the term of your
employment, disclose or use or enable another to disclose or use
any secret, private or confidential information, trade secret or
other proprietary knowledge of the Company, or its subsidiaries,
divisions, employees or agents. Upon termination of your employment
with the Company, you shall deliver to the Company all equipment,
records and copies of records, notes, data, memoranda, prototypes,
designs, customer lists and other information which is embodied in
physical media and documents belonging to the Company which are
then in your possession. You agree that all such information and
documents shall be the property of the Company and that the
obligations set forth in this paragraph shall survive termination
of your employment. |
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5. |
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You agree that, if you or the Company shall terminate your
employment in such a manner as to entitle you to Termination Pay
under paragraph 1, above, you shall not, for so long as you are
entitled to receive such Termination Pay: |
(a) directly or indirectly own, manage, operate or control, or
participate in the ownership, management, operation or control of,
or become associated in any capacity with any business enterprise,
firm, corporation
or company
related to the field of testing for the detection of drug use,
which is in competition with the business of the Company, or
directly or indirectly accept employment with or render services on
behalf of a competitor of the Company, or any other third party, in
any capacity which may reasonably be considered to be useful to the
competitor or such other third party to become a competitor,
without receiving the Company’s prior written approval;
or
(b) induce
or attempt to induce any employee, officer, consultant, or agent of
the Company to leave the employ thereof or in any way interfere
with the relationship between the Company and any employee,
officer, consultant, or agent thereof; hire directly or through
another entity any person who was an employee of the Company at any
time during the six (6) months prior to the date such person
is to be so hired; or induce or attempt to induce any customer,
client, supplier, licensee, or other business relation of the
Company to cease doing business with the Company or in any way
interfere with the relationship between any such customer, client,
supplier, licensee, or business relation and the Company
(including, without limitation, making any negative statements or
communications concerning the Company).
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6. |
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You agree that your obligations under paragraphs 4 an |
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