bi-weekly increments in accordance with Clarient’s current payroll policies and procedures, subject to annual salary and performance review and potential salary increases (but not reductions) at the sole discretion of Clarient’s Board of Directors or Compensation Committee.

(b)            Bonus .  Executive will be eligible for a performance-based bonus as a participant in the Clarient Management Incentive Plan (the “ MIP ”) (target incentives as determined by the Compensation Committee of Clarient’s Board of Directors) with an annual target payment of 50% of base salary, pro-rated for the number of months of service in any given year.  Potential exists to receive as much as twice this figure based on achievement of corporate and personal objectives.  Any bonus that becomes payable under this subsection (b) shall be paid in accordance with Clarient’s standard practices under the MIP, but in no event after the later of (i) the 15th day of the third month following Executive’s first taxable year in which such bonus is no longer subject to a substantial risk of forfeiture, and (ii) the 15th day of the third month following the first taxable year of Clarient in which such bonus is no longer subject to a substantial risk of forfeiture, as determined in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and any Treasury Regulations and other guidance issued thereunder.  Notwithstanding anything herein to the contrary, for purposes of calculating any bonus that may become payable to Executive under the MIP in respect of any calendar year during which CPS does not maintain a comparable management incentive plan, Executive’s base salary shall equal the Aggregate Annual Base Salary.  For calendar year 2009, the Aggregate Annual Base Salary shall be $450,000.  For purposes of this Letter Agreement, “ Aggregate Annual Base Salary ” means the aggregate amount of the base salaries earned by Executive from each of Clarient and CPS in a given calendar year.

4.              Change of Control/Equity Grants .  If Executive is employed by Clarient immediately prior to the occurrence of a Change of Control (as defined below), then, notwithstanding anything to the contrary contained in the stock option agreements by and between Clarient and Executive identified on Schedule 1 hereto (the “ Option Agreements ”), all shares subject to the stock options granted under the Option Agreements shall vest and become exercisable immediately prior to the consummation of such Change of Control.  Notwithstanding the foregoing, with respect to the stock option granted to Executive by Clarient on April 3, 2006, the parties agree that 48,000 shares which were covered by such stock option and which were subject to performance vesting conditions, which conditions were not attained, did not vest, and for the avoidance of doubt, such stock option shall not be exercisable with respect to such 48,000 shares and is hereby cancelled with respect thereto; however , this sentence shall have no effect on the 32,000 shares which were covered by such stock option, but which were not subject to performance vesting conditions.  Except as expressly provided herein, all terms and conditions of the Option Agreements shall remain in full force and effect.  Additional equity grants may be awarded at the discretion of Clarient’s Board of Directors or Compensation Committee and, if made, will be made in a manner commensurate with equity grants made to other senior executives of Clarient, the terms and conditions of which shall be as determined under Clarient’s 2007 Incentive Award Plan and by Clarient’s Board of Directors or Compensation Committee.

5.              Fringe Benefits .

(a)            Executive will be paid a car allowance at the rate of $600 per month, paid on a monthly basis.  Without limiting Clarient’s obligation pursuant to the preceding sentence, in no event shall the monthly allowance be made later than December 31 of the year following the year in which the expense was incurred.  The allowance paid to Executive in one year shall not affect the allowance paid to Executive in any subsequent year and shall not be subject to liquidation in favor of any other benefit.

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(b)            Executive shall be eligible to participate, subject to plan eligibility requirements, in Clarient’s group life and accidental death and dismemberment insurance in an amount equal to one times Executive’s Aggregate Annual Base Salary not to exceed $600,000 (assuming that Executive meets normal insurability requirements).  If insurability requirements cannot be met, the maximum amount of group life insurance benefit is $225,000.  Executive will be offered the opportunity to purchase voluntary life insurance for himself and his spouse and children, if applicable, and otherwise be eligible to participate in all other benefits programs offered generally by Clarient to its other senior executives, including medical, dental and vision insurance, short and long term disability insurance, 401(k) Plan, flexible spending account (Section 125) plan and employee assistance program, subject to such plans’ eligibility requirements.

(c)            Executive will also be entitled to twenty-two (22) days of vacation per annum which will accrue at the rate of 6.77 hours per pay period.  Executive may not accrue more than forty (40) hours above his eligible vacation allowance per year.  All vacation accrued will carry over year to year; however , the point at which the total number of vacation hours accrued exceeds the maximum allowable, no additional accruals will be earned until the amount is reduced below the maximum.

(d)            Executive shall be covered by Clarient’s directors and officers liability insurance policies and indemnification policies on the same terms and conditions as apply to Clarient’s other senior executives.  This provision shall survive termination of this Agreement and shall not be covered by the release contemplated by Section 6(d).

6.              Severance Payments .  Subject to the provisions of subsection (d) and Section 11 below and the other terms and conditions of this Letter Agreement, in the event Executive has incurred a Separation from Service (within the meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h)) (“ Separation from Service ”) from Clarient by reason of a termination of Executive’s employment:  (a) by Clarient without “cause,” (b) by Executive for “good reason” within twelve months after a Change of Control, or (c) by Executive as a result of Executive’s death or disability (any of the foregoing being a “ Severance Termination ”), Clarient will provide Executive the benefits described in this Section 6, which shall be the only severance benefits or other payments with respect to Executive’s employment with Clarient to which Executive shall be entitled.  Without limiting the generality of the foregoing, these benefits are in lieu of all salary, bonuses and vacation accruals (except for salary, bonuses and vacation accruals for periods ending on the date of termination as provided in Section 8 below) and other rights Executive may have against Clarient or any of its affiliates.

(a)            If a Severance Termination occurs, Executive will receive payment of an amount equal to twelve (12) months of his Aggregate Annual Base Salary in effect at the time of the Severance Termination.

(b)            Upon a Severance Termination, Executive will be able to exercise any options which have become vested and exercisable on or before the termination date and until the earlier of (i) the first anniversary of the date of termination or (ii) the expiration of the original term of the option.  Except as expressly provided herein, all terms and conditions of such Option Agreement shall remain in full force and effect.

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(c)            Upon a Severance Termination, Executive will receive continued coverage under Clarient’s medical and health plans in accordance with COBRA rules and regulations following the termination date (including any period as may be required by law), provided that coverage will end if Executive obtains comparable coverage from a subsequent employer or otherwise ceases to be eligible for COBRA benefits.  If Executive chooses such continuation health insurance coverage, Executive will only pay the amount paid by Executive during his employment and Clarient will subsidize the remaining costs which are normally the responsibility of the former employee for twelve (12) months or until Executive obtains insurance through another employer, whichever occurs sooner.  Thereafter, Executive shall be solely responsible for paying the premiums for COBRA continuation coverage.  If Executive ceases to be eligible for COBRA because Clarient does not pay the premiums for its existing or group insurance policy or Clarient ceases to have a group healthcare plan, Clarient will pay Executive, for any portion of the period referred to above during which Executive’s COBRA eligibility ceases for such reasons, the amount of the premium it would have had to pay for Executive’s coverage under the then existing, or if none, the most recently existing, healthcare insurance policy.  Executive should consult with Clarient’s Manager of Human Resources concerning the process for assuming ownership of and continued premium payments for any life insurance policy.  Executive will be reimbursed in accordance with Clarient’s policies promptly for all of Executive’s reasonable and necessary business expenses incurred on behalf of Clarient prior to Executive’s termination date.  Without limiting Clarient’s obligation under the prec