EMPLOYMENT SEPARATION AGREEMENT

 

This Employment Separation Agreement (the “Agreement”) is effective as of March
25, 2015, and is made by and between Interpace Diagnostics, LLC (together with
Interpace Diagnostics Corporation and PDI, Inc. the “Company”), having its
principal place of business at 300 Interpace Parkway, Parsippany, New Jersey
07054, and Gregory Richard (the “Executive”), residing at 282 11th Avenue, New
York, NY 10001, collectively referred to as the “Parties,” pursuant to which the
Parties agree:

 

1.           Employment. In consideration of and conditioned upon the
Executive’s execution of a Confidential Information, Non-Disclosure,
Non-competition Non-Solicitation, and Rights to Intellectual Property Agreement
acceptable to the Company and substantially in the form attached hereto as
Exhibit A, the Company will continue to employ Executive as the Senior Vice
President and General Manager of IDX. The Parties acknowledge and agree that
Executive’s employment with the Company is “at will” and that Executive’s
employment may be terminated by Executive or the Company at any time, for any
reason or for no reason.

 

2. Compensation and Benefits Payable Upon Involuntary Termination without Cause
or Resignation for Good Reason.

 

  a. Triggering Event. In further consideration for Executive’s employment,
Executive will receive the compensation and benefits set forth in Section 2(b)
if the following requirements (hereinafter referred to as the “Triggering
Event”) are met:

 

  i. Executive’s employment is terminated involuntarily by the Company at any
time for reasons other than death, Total Disability, or Cause, as defined in
this Agreement, or Executive resigns from employment for Good Reason, as defined
in this Agreement; and         ii. As of the 45th day following his termination
date, Executive has executed and delivered to the Company, a Severance Agreement
and General Release acceptable to the Company (the “Release”), and thereafter,
any applicable revocation period has expired and Executive has not revoked the
Release during such revocation period. Such Release shall include a release of
all claims against the Company, all affiliated and related entities and/or
persons deemed necessary by the Company. The Release may also include
Confidentiality, Non-Disparagement, No-Reapply, Tax Indemnification, and/or
other appropriate terms.

 

   

 

 

  b. Compensation and Benefits. Following the occurrence of a Triggering Event,
the Company will provide the following compensation and benefits to Executive:

 

  i. The Company will pay Executive a lump sum payment equal to the product of
twelve (12) times Executive’s Base Monthly Salary (excluding incentives,
bonuses, and other compensation), plus the average of the annual amounts paid to
Executive under any cash-based incentive or bonus plan in which Executive
participates with respect to the last three (3) full fiscal years of Executive’s
participation in such plan prior to the date of termination of Executive’s
employment with the Company (or, if Executive’s number of full fiscal years of
participation in any such plan prior to the date of termination of Executive’s
employment is less than three (3), the average of the annual amounts paid to
Executive over the number of full fiscal years of Executive’s participation in
such plan prior to the date of termination of Executive’s employment). Subject
to Section 2(c) below, such payment shall be made within sixty (60) days after
Executive’s termination date. Notwithstanding the foregoing, if the 60 day
period following the Executive’s termination ends in a calendar year after the
year in which the Executive’s Employment terminates, the Severance Payment shall
be made no earlier than the first day of such later calendar year.         ii.
The Company will reimburse Executive for the cost of the premiums for COBRA
group health continuation coverage under the Company’s group health plan paid by
Executive for coverage during the period beginning on Executive’s termination
date and ending on the earlier of either: (A) the first anniversary of
Executive’s termination date; or (B) the date on which Executive becomes
eligible for other group health coverage, provided that no reimbursement shall
be paid unless and until Executive submits proof of payment acceptable to the
Company within ninety (90) days after Executive incurs such expense. Any
reimbursements of the COBRA premium that are taxable to the Executive shall be
made on or before the last day of the year following the year in which the COBRA
incurred, the amount of the COBRA premium eligible for reimbursement during one
year shall not affect the amount of COBRA premium eligible for reimbursement in
any other year, and the right to reimbursement shall not be subject to
liquidation or exchange for another benefit.

 

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  c. Delay of Payment to Comply with Code Section 409A. Notwithstanding anything
herein to the contrary, if at the time of Executive’s termination of employment
with the Company, Executive is a “specified employee” within the meaning of Code
Section 409A, and the regulations promulgated thereunder, then if and to the
extent required in order to avoid the imposition on Executive of any excise tax
under Code Section 409A the Company shall delay the commencement of such
payments (without any reduction) by a period of six (6) months after Executive’s
termination date. Any payments that would have been paid during such six (6)
month period but for the provisions of the preceding sentence shall be paid in a
lump sum to Executive six (6) months and one (1) day after Executive’s
termination date. The 6-month payment delay requirement of this Section 2(c)
shall apply only to the extent that the payments under this Section 2 are
subject to Code Section 409A. With respect to payments or benefits under this
Agreement that are subject to Code Section 409A, whether Executive has had a
termination of employment shall be determined in accordance with Code Section
409A and applicable guidance issued thereunder.         d. Limitation of
Payments. If any payment or benefit due under this Agreement, together with all
other payments and benefits Executive receives or is entitled to receive from
the Company or any of its Affiliates, would (if paid or provided) constitute an
excess parachute payment (within the meaning of Section 280G(b)(1) of the Code),
the amounts otherwise payable and benefits otherwise due under this Agreement
will be limited to be minimum extent necessary to ensure that no portion thereof
will fail to be tax-deductible to the Company by reason of Section 280G of the
Code. The determination of whether any payment or benefit would (if paid or
provided) constitute an excess parachute payment will be made by the Board, in
its sole discretion. Any such reduction in the preceding sentence shall be made
in the following order: (i) first, any future cash payments (if any) shall be
reduced (if necessary, to zero); (ii) second, any current cash payments shall be
reduced (if necessary, to zero); (ii) third, all non-cash payments (other than
equity or equity derivative related payments) shall be reduced (if necessary, to
zero); and (iv) fourth, all equity or equity derivative payments shall be
reduced. Notwithstanding the foregoing, the Company shall use commercially
reasonable efforts to bring the issue to a shareholder vote in accordance with
Section 280G(b)(5) of the Code and the Treasury Regulations thereunder.        
e. Section 409A Compliance. The following rules shall apply, to the extent
necessary, with respect to distribution of the payments and benefits, if any, to
be provided to the Executive under this Agreement. This Agreement is intended to
comply with or be exempt from Section 409A of the Internal Revenue Code of 1986,
as amended (“Section 409 A”) and the parties hereto agree to interpret, apply
and administer this Agreement in the least restrictive manner necessary to
comply therewith and without resulting in any increase in the amounts owed
hereunder by the Company. Subject to the provisions in this Section, the
severance payments pursuant to this Agreement shall begin only upon the date of
the Executive’s “separation from service” which occurs on or after the date of
the Executive’s termination of employment. It is intended that each installment
of the severance payments and benefits provided under this Agreement shall be
treated as a separate “payment” for purposes of Section 409 A.

 

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    All reimbursements and in-kind benefits provided under this Agreement shall
be made or provided in accordance with the requirements of Section 409A, to the
extent that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirements that (i) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (ii) the reimbursement of
an eligible expense will be made on or before the last day of the calendar year
following the year in which the expense is incurred and (iii) the right to
reimbursement is not subject to set off or liquidation or exchange for any other
benefit. Notwithstanding anything herein to the contrary, the Company shall have
no liability to the Executive or to any other person if the payments and
benefits provided in this Agreement that are intended to be exempt from or
compliant with Section 409A are not so exempt or compliant.

 

3. Other Compensation.

 

  a. Except as may be provided under this Agreement, any benefits to which
Executive may be entitled pursuant to the plans, policies and arrangements of
the Company shall be determined and paid in accordance with the terms of such
plans, policies, and arrangements, and Executive shall have no right to receive
any other compensation or benefits, or to participate in any other plan or
arrangement, following the termination of Executive’s employment by either party
for any reason.         b. Notwithstanding any provision contained herein to the
contrary, in the event of any termination of employment, the Company shall pay
Executive his or her earned, but unpaid, base salary within ten (10) days of
Executive’s termination date and shall reimburse Executive for any accrued, but
unpaid, reasonable business expenses, in each case, earned or accrued as of the
date of termination. Executive shall submit documentation of any business
expenses within ninety(90) days of his or her termination date and any
reimbursements of such expenses that are taxable to the Executive shall be made
on or before the last day of the year following the year in which the expense
was incurred, the amount of the expense eligible for reimbursement during one
year shall not affect the amount of reimbursement in any other year, and the
right to reimbursement shall not be subject to liquidation or exchange for
another benefit.

 

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4. Withholding. All amounts payable under this Agreement shall be subject to
customary withholding and other employment taxes, and shall be subject to such
other withholding as may be required in accordance with the terms of this
Agreement or applicable law.     5. Confidentiality, Non-Solicitation and
Covenant Not to Compete Agreement. In the event Executive’s employment with the
Company is terminated by either party for any reason, Executive shall continue
to be bound by the Confidential Information, Non-Disclosure, Non-Competition,
Non-Solicitation, and Rights to Intellectual Property Agreement signed at or
about the time this Agreement is executed and/or the Confidentiality,
Non-Solicitation and/or Covenant Not to Compete Agreement most recently signed
by Executive prior to the termination date for the period set forth therein.    
6. Definitions.

 

  a. Cause shall mean (i) the failure of Executive to use Executive’s best
efforts in accordance with Executive’s position, skill and abilities to achieve
Executive’s goals as periodically set by the Company and such failure shall not
be cured by the Executive within thirty (30) days written notice from the
Company to the Executive specifying such failure; (ii) the failure by Executive
to comply with and follow reasonable instructions of the Chief Executive Officer
and/or the Company’s Board of Directors (the Board”); (iii) a material breach by
Executive of any of the terms or conditions of this Agreement and such breach
shall not be cured by the Executive within thirty (30) days written notice from
the Company to the Executive specifying such failure; (iv) the failure by
Executive to adhere to the Company’s documented policies and procedures; (v)
breach by Executive of any Confidentiality, Non-Solicitation and/or Covenant Not
to Compete Agreement signed by Executive; (vi) the failure of Executive to
adhere to moral and ethical business principles consistent with the Company’s
Code of Business Conduct and Guidelines on Corporate Governance as in effect
from time to time;(vii) Executive’s conviction of a criminal offense (including
the entry of a guilty or nolo contendere plea); (viii) any documented act of
material dishonesty or fraud by the Executive in the commission of his or her
duties; or (ix) Executive engages in an act or series of acts constituting
misconduct resulting in a misstatement of the Company’s financial statements due
to material noncompliance with any financial reporting requirement within the
meaning of Section 304 of The Sarbanes-Oxley Act of 2002.

 

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  b. Base Monthly Salary shall mean an amount equal to one-twelfth of
Executive’s then current annual base salary. Base Monthly Salary shall not
include incentives, bonus(es), health and welfare benefits, car allowances, long
term disability insurance or any other compensation or benefit provided to
executive employees of the Company.         c. Change of Control shall mean: (i)
any merger by the Company into another corporation or corporations which results
in the stockholders of the Company immediately prior to such transaction owning
less than 51% of the surviving corporation; (ii) any acquisition (by purchase,
lease or otherwise) of all or substantially all of the assets of the Company by
any person, corporation or other entity or group thereof acting jointly; (iii)
the acquisition of beneficial ownership of voting securities of the Company
(defined as common stock of the Company or any securities having voting rights
that the Company may issue in the future) or rights to acquire voting securities
of the Company (defined as including, without limitation, securities that are
convertible into voting securities of the Company (as defined above) and rights,
options, warrants and other agreements or arrangements to acquire such voting
securities) by any other person, corporation or other entity or group thereof
acting jointly, in such amount or amounts as would permit such person,
corporation or other entity or group thereof acting jointly to elect a majority
of the members of the Board, as then constituted; or (iv) the acquisition of
beneficial ownership, directly or indirectly, of voting securities and rights to
acquire voting securities having voting power equal to 51% or more of the
combined voting power of the Company’s then outstanding voting securities by any
person, corporation or other entity or group thereof acting jointly.
Notwithstanding the preceding sentence, any transaction that involves a mere
change in identity, form or place of organization with the meaning of Section
368(a)(l)(F) of the Code, or a transaction of similar effect, shall not
constitute a Change of Control.         d. Good Reason Executive’s termination
of employment with the Company shall be for Good Reason if (i) Executive
notifies the Company in writing that one of the Good Reason Events (as defined
in subparagraphs d. i. and ii. below) has occurred, which notice shall be
provided within ninety (90) days after he or she first becomes aware of the
occurrence of such Good Reason Event; (ii) the Company fails to cure such Good
Reason Event within thirty (30) days after receipt of the written notice from
Executive (the “Cure Period”); and (iii) Executive resigns employment within
thirty (30) days following expiration of the Cure Period. For purposes of this
Agreement, a “Good Reason Event” shall mean any of the following which occur
without Executive’s consent:

 

  i. Prior to a Change of Control,

 

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  A. The failure by the company to pay Executive any material amount of his or
her current base salary, or any material amount of his or her compensation
deferred under any plan, agreement or arrangement of or with the Company that is
currently due and payable;         B. A material reduction of Executive’s annual
base salary; provided that a reduction consistent with reductions made to the
annual base salaries for similarly situated senior executives of no more than
15% shall not constitute Good Reason; or         C. The relocation of
Executive’s principal place of employment to a location more than fifty (50)
miles from Executive’s current principal place of employment.

 

  ii. During the two (2) year period following any Change of Control,

 

  A. The failure by the Company to pay Executive any material amount of his or
her current base salary, or any material amount of his or her compensation
deferred under any plan, agreement or arrangement of or with the Company that is
currently due and payable;         B. A material reduction in Executive’s annual
base salary; provided that a reduction consistent with reductions made to the
annual base salaries for similarly situated senior executives of no more than
fifteen percent (15%) shall not constitute Good Reason;         C. The
relocation of Executive’s principal place of employment to a location more than
fifty (50) miles from Executive’s current principal place of employment;        
D. A material adverse alteration of Executive’s authority, duties or
responsibilities from those in effect immediately prior to the Change of
Control.         E. An intentional, material reduction by the Company of
Executive’s aggregate target incentive awards under any short-term and/or long
term incentive plans; and

 

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  F. The failure of the Company to maintain the Executive’s benefit, retirement,
or fringe benefit plans, policies, practices or arrangements in which Executive
participates (individually and collectively “Fringe Benefits”) at or above the
level in effect immediately before the Change of Control, unless such change is
a global change made to Fringe Benefits for all employees at or above
Executive’s level.

 

  e. Code shall mean the Internal Revenue Code of 1986, as amended.         f.
Total Disability shall mean incapacity due to a medically determinable physical
or mental impairment which can be expected to result in death or can be expected
to last for a continued period of not less than twelve (12) months and prevents
Executive from performing the essential functions of his position, with or
without reasonable accommodation, for a period in excess of twelve (12) months.

 

7. Integration: Amendment. This Agreement (including any Exhibits) shall
constitute the entire agreement between the parties hereto with respect to the
matters set forth herein and supersede and render of no force and effect all
prior understandings and agreements between the parties with respect thereto. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties, provided, however, that this Agreement may be
unilaterally amended by the Company where necessary to ensure any benefits
payable hereunder are either excepted from Code Section 409 A or otherwise
comply with Code Section 409A.     8. Governing Law; Headings. This Agreement
will be construed and governed by the laws of the State of New Jersey, without
regard to principles of conflicts of law and the parties to this Agreement
hereby submit to the jurisdiction of the Courts of the State of New Jersey with
regard to enforcement of this Agreement.       Headings and titles herein are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.     9. Notices. All notices and
other communications required or permitted to be given or made hereunder by
either party shall be in writing and shall be deemed to be duly given if
delivered personally or transmitted by first class certified mail, postage and
fees prepaid, return receipt requested, or sent by prepaid overnight delivery
service to the parties at the following addresses (or at such other addresses as
shall be specified by the parties by like notice):

 

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  If to the Company:       President   Interpace Diagnostics, LLC   Morris
Corporate Center 1   Building A   300 Interpace Parkway   Parsippany, NJ 07054  
    If to the Executive:       Gregory Richard   282 11th A venue   New York, NY
10001     10. Severability. Whenever possible, each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if any
provision or term of this Agreement is held to be prohibited by applicable law
or invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such term or provision or the remaining
provisions or terms of this Agreement.     11. Counterparts. This Agreement may
be executed in one or more counterparts, each of which will be deemed to be an
original of this Agreement and all of which, when taken together, will be deemed
to constitute one and the same agreement.     12. Assignment. The Company may
assign all of its rights and obligations hereunder to an affiliate or subsidiary
of the Company.

 

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date
first above written.

 

EXECUTIVE

 

By: /s/ Gregory Richard  

 

INTERPACE DIAGNOSTICS, LLC

 

By: /s/ Nancy L. Lurker     Nancy L. Lurker     Chief Executive Officer  

 

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