Exhibit 99.3
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 Jose
de la Torre-Bueno (“Executive” or
“Employee”), who is currently serving as the Chief
Technology Officer, 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 one (1) year 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 one (1) year 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 8.
b) On the
Termination Date, 50% of the Executive’s unvested shares of
stock options held by Executive at that time will be accelerated.
(The vesting of the options will be accelerated in the order the
options were granted until options have become vested as a result
of such acceleration for that number of shares equal to 50% of the
total number of shares as to which the options (taken in aggregate)
were unvested before acceleration.) All other options
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 him
until the earlier of (i) twelve months after the
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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 twelve
(12) months of the Termination Date, Employee’s options will
be accelerated and Employee must exercise his options on the date
of the acquisition. For the avoidance of doubt, with respect to the
stock option granted to Executive by the Company on April 3,
2006, the 30,000 shares 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 options shall not be exercisable with respect to such
30,000 shares and is hereby cancelled with respect thereto;
however, this provision shall have no effect on the 20,000 share
which were covered by such stock options, but which were not
subject to performance vesting conditions
c) Executive
shall be eligible to elect continued group health coverage for
himself and his 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 Company
will reimburse Executive, upon submitting receipts for payment, for
one year 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 his “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 he
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
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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 for a period of twelve 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 him from obtaining
employment or otherwise earning a living at the same general
economic benefit as reasonably required by him 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 PTO 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 him 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.
5.
Non-Competition. Executive shall not, without prior written
approval of the Board of Directors of the Company, directly or
indirectly through any other person,
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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 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 lab services, 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 ackn
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