Exhibit 99.2
SEPARATION
AGREEMENT
AND
WAIVER AND RELEASE OF ALL CLAIMS
This Separation
Agreement and Waiver and Release of all Claims
(“Agreement”) is made and entered into by and between
Clarient, Inc. (the “Company”), and
Karen Garza (“Executive” or
“Employee”), who is currently serving as the Vice
President, Business Development and Strategic Initiatives, in
connection with the termination of employment of the
Executive.
In resolution of
any and all disputes, known and unknown, between the Company and
Executive arising from Executive’s employment with the
Company, Executive’s Employment Agreement with the Company,
Executive’s termination from the Company, or otherwise, and
in exchange for the consideration to the Executive made under this
Agreement, the Company and Executive covenant and agree as
follows:
1.
Termination of Employment.
Employment of the Executive with the Company and the
Company’s Affiliates will be terminated effective
October 1, 2007 (the “Termination Date”). From and
after the Termination Date, Executive shall no longer be employed
by, or act in any capacity for, the Company or any of its
Affiliates. For purposes of this Agreement, “Affiliate”
means Safeguard and Clarient Pathologist, Inc.
2.
Severance Payments. In exchange for the covenants and
promises of Executive, and subject to all of the terms and
conditions contained in this Agreement, the Company agrees as
follows:
a) The Company
shall pay to Executive an amount equal to six (6) months of
Executive’s base salary in effect as of the date of this
Agreement, less applicable federal, state, and local withholding
taxes. Such payments shall be made whether or not Executive obtains
new employment during the period commencing on the Termination Date
and ending on the six (6) month anniversary thereof (the
“Severance Period”) and will be made in accordance with
the Company’s standard payroll procedures; provided, however,
that such payments shall cease immediately if Executive violates
any provision set forth in this Agreement. The first payment under
this provision shall be made by Company on the date when the
seven-day release revocation period expires, as set forth in
Section 9.
i)
The Company will pay interest on payments that are more than ten
days past due at the prime rate at the Company’s principal
bank (or, if none, Citibank N.A.) plus two percentage points
compounded monthly. In addition, the Company will pay all
reasonable costs and expenses (including reasonable
attorney’s fees and all costs of arbitration or court
proceedings) incurred by Executive to enforce this agreement or any
obligation hereunder but only if Executive is the prevailing party
in any such proceeding. If the Company is the prevailing party,
Executive will pay all of the Company’s reasonable costs
and
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expenses (including
reasonable attorneys’ fees and all costs of arbitration or
court proceedings) incurred in connection with any such
proceedings.
b) Any option
provided to Executive up to and including the Termination Date
shall continue to vest for six months after the Termination Date.
Executive shall be entitled to exercise the options provided to her
until the earlier of (i) nine months after the Termination
Date or (ii) the expiration date of the option. However, in
the event that the Company is acquired, such that there is a
transfer of at least 90% of the outstanding stock of the Company,
within six (6) months of the Termination Date,
Employee’s options will be accelerated and Employee must
exercise her options on the date of the acquisition.
c) Executive
shall be eligible to elect continued group health coverage for
herself and her eligible dependents in accordance with the
rules and regulations of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”). If Executive
chooses such continuation health insurance coverage, the Executive
will only pay the amount paid by Executive during her employment
and the Company will subsidize the remaining costs which are
normally the responsibility of the former employee for six months
or until the 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 the
Company does not pay the premiums for its existing or group
insurance policy or the Company ceases to have a group healthcare
plan, the Company 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 the Company’s Manager
of Human Resources concerning the process for assuming ownership of
and continued premium payments for any life insurance
policy.
d) Executive
shall be paid a “pro rata portion” of her “bonus
for the year of termination” (as those terms are hereinafter
defined) within fifteen (15) days of the approval of the 2007
Managers Incentive Program (MIP) payout by the Employer’s
Board of Directors. “Pro rata portion” means the number
of days in the calendar year of termination up to and including the
Termination Date divided by the total number of days in that full
calendar year. The “bonus for the year of termination”
means the amount the Executive would have been likely to earn if
she had been employed for the full year, as determined in good
faith by the Board of Directors of the Company or a committee
thereof.
e) It is expressly
understood by Executive that receipt of all compensation and
benefits described above in (a) through (d) of this
Section 2 are contingent upon (i) the release of all
claims as set forth below in Sections 6 and 7; (ii) Executive
not engaging in Solicitation for a period of six months from the
Termination Date as set forth below in Section 4; and
(iii) Executive not engaging in Competition
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for a period of six
months from the Termination Date as set for the below in
Section 5. It is further understood by the Executive that the
conditions to receiving severance benefits will not prevent her
from obtaining employment or otherwise earning a living at the same
general economic benefit as reasonably required by her without
losing the severance benefits. The Executive also acknowledges that
the provisions contained in this Agreement are reasonable and
necessary to protect the legitimate business interests of the
Company and that the Company would not have entered into this
Agreement in the absence of such provisions. Executive will not be
required to mitigate the amount of any payment provided for in this
letter by seeking other employment or otherwise.
3.
Other Payments.
a) Executive
shall be paid all accrued and unpaid salary to the Termination Date
and accrued but unused vacation earned through the Termination
Date, less applicable federal, state, and local withholding taxes.
Executive shall also be reimbursed for all properly reimbursable
expenses incurred by her through the Termination Date.
4.
Non-Solicitation . Executive shall not alone or in concert
with others (A) solicit, entice, or induce any Customer (as
defined below) to become a client, customer, OEM, distributor, or
reseller of any other person or, firm or corporation with respect
to, or provide, products or services which are competitive with
products or services then sold or under development by the Company
or to cease doing business with the company or authorize or
knowingly approve the taking of such actions by any other person,
or (B) solicit, entice, or induce directly or indirectly, or
hire any person who presently is or at any time during the term of
this Agreement is an employee of the Company to become employed by
any other person, firm or corporation or to leave his or her
employment with the Company or authorize or approve any such action
by any other person or entity for a period of one year commencing
from the Termination Date. Providing a reference for an employee of
the Company will not, however, constitute Solicitation if the
employee has decided to leave the employ of the Company, is seeking
other employment and requests the reference. Nothing in this
Section 4 will at any time prohibit Executive from hiring a
former employee of the Company whose employment with the Company
was terminated through no act of Executive, and who was not
solicited directly or indirectly by Executive while the employee
was employed by the Company.
(i)
“Customer” means any person or entity that within the
two (2) years prior to the Termination Date was a client,
customer, OEM, distributor, or reseller of the Company or a bona
fide prospect to become any of the foregoing.
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.
Non-Competition. Executive shall not, without prior written
approval of the Board of Directors of the Company, directly or
indirectly through any other person, firm, or corporation, whether
individually or in conjunction with any other person, or as an
employee, agent, consultant, representative, partner or holder of
any interest in any
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other person, firm,
corporation or other association during any portion of the six
months after the Termination Date, compete with, or encourage or
assist others to compete with, or solicit orders or otherwise
participate in business transactions or provide services in
competition with, the business engaged in by the Company at any
time during the term of Executive’s employment with the
Company (unless such business shall have been abandoned by the
Company.) Executive acknowledges that the Company’s
products are marketed throughout the United States, that therefore
the Company is engaged in business in every county and state of the
United States and that the foregoing definition of
“competition” includes competition in every county and
state of the United States as well as in foreign
countries.
6.
Release of All Claims
. In consideration of Paragraph 2 of this Agreement, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Employee, on behalf of Employee
and her heirs, her
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