EXHIBIT 10.2
(CLARIENT LOGO) [c07536p0753601.jpg]
July 26, 2010
Michael J. Pellini, M.D.
Clarient, Inc.
31 Columbia
Aliso Viejo, CA 92656
Dear Mike:
Clarient Inc. (the “Company”) is pleased to enter into this letter agreement
(the “Letter Agreement”) with you (the “Executive”) which will address the terms
of Executive’s employment with the Company. The Company considers it essential
to the best interests of its stockholders to attract and foster the continuous
employment of key management personnel of the Company and the arrangements
described in this Letter Agreement are intended to address that goal.

1.   Duties. Executive will continue to serve as President and Chief Operating
Officer of the Company and will report directly to the Chief Executive Officer
of the Company. This Letter Agreement amends restates and supersedes in its
entirety the employment letter agreement dated, February 26, 2009, between
Executive and the Company.

2.   Term. Notwithstanding anything to the contrary, Executive’s employment
relationship with the Company is employment “at will”. As a result, Executive’s
employment may be terminated by the Company or by Executive at any time (subject
to the notice provision below), in each case without any liability or
obligation, except as set forth in this Letter Agreement. If Executive
terminates his employment, he shall give the Company written notice of such
termination not less than thirty (30) days prior to the effective date of such
termination. In light of the severance benefits provided for in Section 6, the
Company will have no obligation to give Executive prior notice of any such
termination by the Company (whether or not such termination is without cause).

3.   Compensation.

  a.   Base Salary. During the term of Executive’s employment, Executive will
receive a base salary of $347,500 per annum, payable in biweekly increments,
subject to annual salary and performance review and potential salary increase
(but not reductions) at the sole discretion of the Company.

  b.   Bonus. Executive will be eligible for a performance-based bonus as a
participant in the Company’s Management Incentive Plan (“MIP”) (target
incentives as determined by the Compensation Committee of the Company’s Board of
Directors) with an annual target payment of 65% of base salary, pro-rated for
the number of months of services in any given year. The potential exists to
receive as much as twice this figure based on achievement of Company and
personal objectives. Any bonus that becomes payable under this subsection
(b) shall be paid in accordance with the Company’s past 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 the Company 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 there under.

 

 

--------------------------------------------------------------------------------

 

4.   Change of Control/Equity Grants. If Executive remains employed by the
Company through the occurrence of a Change of Control (as defined below), then,
notwithstanding anything to the contrary contained in the stock option
agreements and restricted stock agreement by and between the Company and
Executive identified on Schedule 1 hereto (the “Equity Agreements”), all shares
subject to the stock options and all shares of restricted stock granted under
the Equity Agreements shall vest and become exercisable immediately prior to the
consummation of such Change of Control. To the extent inconsistent with the
Equity Agreements, this Section 4 shall constitute an amendment to the Equity
Agreements and, except as expressly provided herein, all terms and conditions of
the Equity Agreements shall remain in full force and effect. Additional equity
grants may be awarded by action of the Company’s Board of Directors or a duly
authorized committee of the Board and, if made, will be made in a manner
commensurate with senior executives, the terms and conditions of which shall be
as determined under the Company’s 2007 Incentive Award Plan, as amended, and by
the Company’s Board of Directors or Compensation Committee thereof.

5.   Fringe Benefits.

  a.   Executive will be paid a car allowance at the rate of $600 per month.

  b.   Executive is eligible for group life and accidental death and
dismemberment insurance in an amount equal to one times the Executive’s 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 the Company to its other
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.

  c.   Executive will also be entitled twenty-five (25) days of vacation per
annum which will accrue at the rate of 7.70 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 the Company’s directors and officers
liability insurance policies and indemnification policies on the same terms and
conditions as apply to the Company’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”) by reason of a
termination of Executive’s employment: (i) by the Company without “cause”,
(ii) by Executive for “good reason” within twelve months after a Change of
Control, or (iii) by Executive as a result of Executive’s death or disability
(any of the foregoing being a “Severance Termination”), the Company 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
the Company to which Executive shall be entitled. Without limiting the
generality of the foregoing, these benefits are in lieu of all salary and
bonuses (except for salary and bonuses for periods ending on the date of
termination as provided in Section 8 below), accrued vacation and other rights
Executive may have against the Company or its affiliates.

  a.   If a Severance Termination occurs, Executive will receive payment of an
amount equal to eighteen (18) months of his base salary in effect at the time of
the Severance Termination.

 

2

--------------------------------------------------------------------------------

 

  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 date of the option. In addition, in the event
that Executive remains employed by the Company through April 24, 2009 or
experiences a Severance Termination prior to such date and, in either case,
within one year following the date of termination of Executive’s employment,
either (A) a Change of Control occurs, or (B) (1) the Company enters into a
definitive agreement pursuant to which, if consummated, a Change of Control
would occur, and (2) no later than eighteen months following the date of
termination or a Change of Control occurs, then, in any such case, any options,
to the extent not vested as of the date of such termination, shall become fully
vested and exercisable immediately prior to the occurrence of any such Change of
Control (unless any such termination of employment was a termination for
“cause”, in which case the acceleration of vesting contemplated by this sentence
shall not apply).

  c.   Upon a Severance Termination, Executive will receive continued coverage
under the Company’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 the Company will subsidize the remaining costs which are
normally the responsibility of the former employee for eighteen 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 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. Executive will be reimbursed in accordance with
Company policies promptly for all of Executive’s reasonable and necessary
business expenses incurred on behalf of the Company prior to Executive’s
termination date. Without limiting the Company’s obligation under the preceding
sentence, the reimbursement of any expense under this subsection (c) shall be
made no later than December 31 of the year following the year in which the
expense was incurred. The amount of expenses reimbursed in one year shall not
affect the amount eligible for reimbursement in any subsequent year.

  d.   All compensation and benefits described above in (a) through (c) of this
Section 6 will be contingent upon (i) Executive’s execution of a release of all
claims against the Company substantially in the form of Exhibit A and expiration
of the seven-day revocation period referred to in the release, and
(ii) Executive’s not engaging in any Solicitation (as defined in Section 7 of
this Letter Agreement) during the period of his employment by the Company or the
one-year period following Executive’s termination date.

  e.   Subject to Section 11 below, the Company will pay Executive the amount
described in (a) above in equal bi-weekly installments (“Installments”) during
the period commencing on the date of the Severance Termination and ending on the
eighteen (18)-month anniversary of such date; provided, however, that no such
payments shall be made prior to the first payroll date occurring on or after the
fortieth (40th) day following the date of the Severance Termination (such
payroll date, the “First Payroll Date”) (with amounts otherwise payable prior to
the First Payroll Date paid on the First Payroll Date without interest thereon).
Each Installment shall be treated as a separate payment for purposes of
Section 409A of the Code. The Company will prepare the final release (which will
be substantially in the form attached as Exhibit A to this Letter Agreement) and
deliver it to Executive within five business days of Executive’s termination of
employment. Executive will have twenty-one (21) days in which to consider the
release although Executive may execute it sooner. Please note that the release
has a revocation period of seven days.

 

3

--------------------------------------------------------------------------------

 

  f.   In this Letter Agreement, the term “cause” means (a) Executive’s failure
to adhere to any lawful written policy of the Company (unless Executive’s
failure to adhere is at the request of the Board) if Executive has been given a
reasonable opportunity to comply with such policy and cure Executive’s failure
to comply (which reasonable opportunity to cure must be granted for a period of
at least ten days and up to thirty days, if reasonable); (b) Executive’s
appropriation (or attempted appropriation) of a business opportunity of the
Company, including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the Company;
(c) Executive’s misappropriation (or attempted misappropriation) of any of the
Company’s funds or property (including without limitation trade secrets and
other intellectual property); or (d) Executive’s conviction of, or Executive’s
entering of a guilty plea or plea of no contest with respect to, a felony or the
equivalent thereof. In this Letter Agreement, the term “ good reason ” means
(i) Executive’s assignment (without Executive’s consent) to a position, title,
responsibilities, or duties of a materially lesser status or degree of
responsibility than the position, responsibilities, or duties of President and
Chief Operating Officer of the Company or removal from his position as an
executive officer of the Company, (ii) the relocation of the Company’s offices
at which Executive is principally employed to a location which is more than
thirty miles from the location of the Company’s principal offices on the date of
this Letter Agreement, (iii) the reduction of Executive’s base salary or bonus
opportunity, except pursuant to a reduction which also applies to the Company’s
other senior executives or (iv) the requirement that Executive report to any
officer of the Company other than its Chief Executive Officer; provided,
however, that Executive must have given the written notice to the Company that
Executive believes he has the right to terminate employment for good reason,
within ninety (90) days of the initial occurrence of such event, and the Company
fails to eliminate the good reason within fifteen (15) days after receipt of the
notice. Further, Executive’s termination of employment must occur within 2 years
from the initial occurrence of an event that constitutes good reason.

  g.   In this Letter Agreement, the term “Change of Control” means (a) the
issuance, sale, transfer or acquisition of shares of capital stock of the
Company (including a transfer as a result of death, disability, operation of
law, or otherwise) in a single transaction or a group of related transactions,
as a result of which any entity, person, or group (other than Safeguard
Scientifics, Inc. and/or its affiliates) acquires the beneficial ownership of
newly issued, outstanding or treasury shares of the capital stock of the Company
having 50% or more of the combined voting power of the Company’s then
outstanding securities entitled to vote for at least a majority of the
authorized number of directors of the Company or (b) any merger, consolidation,
sale of all or substantially all the assets or other comparable transaction as a
result of which all or substantially all of the assets and business of the
Company are acquired directly or indirectly by another entity (except Safeguard
Scientifics, Inc. and/or any of its affiliates). An “affiliate” of an entity is
an entity controlling, controlled by, or under common control with the entity
specified, directly or indirectly through one or more intermediaries. “Group”
shall have the same meaning as in section 13(d) of the Securities Exchange Act
of 1934, and “beneficial ownership” shall have the meaning set forth in
Rule 13d-3 of the Securities and Exchange Commission adopted under the
Securities Exchange Act of 1934.

  h.   Executive will not be required to mitigate the amount of any payment
provided for in this Letter Agreement by seeking other employment or otherwise
and Executive shall be entitled to receive the severance payments provided in
this Section 6 without regard to whether Executive obtains other employment or
enters into other service relationships, provided Executive does not violate any
of his obligations under this Section 6.

  i.   Executive acknowledges that the arrangements described in this Letter
Agreement will be the only obligations of the Company or its affiliates in
connection with any determination by the Company to terminate Executive’s
employment with the Company. This Letter Agreement does not terminate, alter, or
affect Executive’s rights under any plan or program of the Company in which
Executive may participate, except as explicitly set forth herein. Executive’s
participation in such plans or programs will be governed by the terms of such
plans and programs.

 

4

--------------------------------------------------------------------------------

 

7.   Definitions of Competition and Solicitation.

(a) For purposes of Section 6(d) of this Letter Agreement “Solicitation” shall
mean (A) soliciting, enticing, or inducing any Customer (as defined below) to
become a client, customer, OEM, distributor, or reseller of the laboratory
services business of any other person, firm or corporation with respect to
products or services which are competitive with products or services then sold
or under development by the Company’s reference laboratory services business or
to cease doing business with the Company or authorizing or knowingly approving
the taking of such actions by any other person or (B) soliciting, enticing, or
inducing directly or indirectly, or hiring any person who presently is or at any
time during the term hereof shall be 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 authorizing or approving any such action by any
other person or entity. 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.
(b) For purposes of this Section 7, “Customer” means any person or entity which
at the time of determination, if made prior to termination of employment, or,
after termination of employment, at the time of such termination, shall be, or
shall have been within one year prior to such time, a client, customer, OEM,
distributor, or reseller of the Company.
(c) Executive acknowledges (i) that his experience and capabilities are such
that the conditions in Section 6(d) to his receiving the severance benefits
referred to in Section 6 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 and (ii) that he has,
prior to the execution of this Letter Agreement, reviewed this Letter Agreement
with his legal counsel. Executive acknowledges that the provisions contained in
this Section 7 and in Section 6(d) are reasonable and necessary to protect the
legitimate business interests of the Company and that the Company would not have
entered into this Letter Agreement in the absence of such provisions.

8.   Other Payments in the Event of Termination of Employment. In the event of
termination of Executive’s employment for any reason, Executive will be entitled
to receive upon such termination payment of all accrued, unpaid salary to the
date of termination. In addition, in the event of termination of Executive’s
employment for any reason other than by the Company for “cause”, Executive will
be entitled to receive upon such termination a “pro rata portion” of his “bonus
for the year of termination” (as those terms are defined below). “Pro rata
portion” means the number of days in the calendar year of termination up to and
including the date of termination divided by the total number of days in that
full calendar year. The “bonus for the year of termination” means the amount
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.

9.   Withholding; Nature of Obligations. The Company will withhold applicable
taxes and other legally required deductions from all payments to be made
hereunder. The Company’s obligations to make payments under this Letter
Agreement are unfunded and unsecured and will be paid out of the general assets
of the Company.

10.   Representations and Covenants of Executive. Executive represents and
warrants to the Company that: (a) he has full power and authority to enter into
this Letter Agreement and to perform his duties hereunder, (b) the execution and
delivery of this Letter Agreement and the performance of his duties hereunder
shall not result in an actual (as opposed to merely asserted) breach of, or
constitute an actual (as opposed to merely asserted) default under, any
agreement or obligation to which he may be bound or subject, including without
limitation any obligations of confidentiality, noncompetition, nonsolicitation
or use of information, (c) this Letter Agreement represents a valid, legally
binding obligation on him and is enforceable against him in accordance with its
terms except as the enforceability of this Letter Agreement may be subject to or
limited by general principles of equity and by bankruptcy or other similar laws
relating to or affecting the rights of creditors, (d) to Executive’s knowledge,
the services contemplated by this Letter Agreement do not (i) infringe any third
party’s copyright, patent, trademark, trade secret or other proprietary right,
or (ii) violate any law, statute, ordinance or regulation, and (e) the Executive
has resigned from all positions as an employee, officer, director or executive
of prior employers. Executive covenants to the Company that during his
employment with the Company (a) he shall not (i) intentionally use, in
connection with his employment with the Company, any confidential or proprietary
information or materials belonging to any third person or entity, or
(ii) knowingly violate any law, statute, ordinance or regulation and (b) he
shall not breach (i) any agreement with any third party to keep in confidence
any confidential or proprietary information, knowledge or data acquired prior to
his execution of this Letter Agreement or (ii) any obligations of
confidentiality, noncompetition, nonsolicitation or use of information.

 

5

--------------------------------------------------------------------------------

 

11.   Section 409A.

(a) Notwithstanding anything to the contrary in this Letter Agreement, if at the
time of Executive’s Separation from Service with the Company, Executive is a
“specified employee” as defined in Section 409A of the Code, as determined by
the Company in accordance with Section 409A of the Code, and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a result
of such Separation from Service is necessary in order to prevent any accelerated
or additional tax under Section 409A of the Code, then the Company will defer
the commencement of the payment of any such payments or benefits hereunder
(without any reduction in the payments or benefits ultimately paid or provided
to Executive) until the date that is at least six (6) months following
Executive’s Separation from Service with the Company (or the earliest date
permitted under Section 409A of the Code), whereupon the Company will pay
Executive a lump-sum amount equal to the cumulative amounts that would have
otherwise been previously paid to Executive under this Letter Agreement during
the period in which such payments or benefits were deferred. Thereafter,
payments will resume in accordance with this Letter Agreement.
(b) With respect to the provisions of this Letter Agreement which provide for
“nonqualified deferred compensation” within the meaning of Section 409A of the
Code, this Letter Agreement shall comply with the provisions of Section 409A of
the Code and the Regulations thereunder and shall be so interpreted, construed
and administered.
(c) In the event that following the date hereof the Company or Executive
reasonably determines that any compensation or benefits payable under this
Letter Agreement may become subject to taxes, interest or penalties imposed
under Section 409A of the Code, the Company and Executive shall work together to
adopt such amendments to this Letter Agreement or adopt other policies or
procedures (including amendments, policies and procedures with retroactive
effect), or take any other commercially reasonable actions necessary or
appropriate, to (i) exempt the compensation and benefits payable under this
Letter Agreement from Section 409A of the Code and/or preserve the intended tax
treatment of the compensation and benefits provided with respect to this Letter
Agreement or (ii) comply with the requirements of Section 409A of the Code and
related Department of Treasury guidance.

12.   Miscellaneous. This Letter Agreement will inure to the benefit of
Executive’s personal representatives, executors, and heirs. In the event
Executive dies while any amount payable under this Letter Agreement remains
unpaid, all such amounts will be paid to the parties legally entitled thereto in
accordance with the terms and conditions of this Letter Agreement. No term or
condition set forth in this Letter Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and an officer of the Company authorized to sign
such writing by the Board of Directors of the Company or an authorized committee
thereof. This Letter Agreement will be construed and enforced in accordance with
the laws of the State of California without regard to the conflicts of laws of
any state. Any controversy or claim arising out of or relating to this Letter
Agreement, or the breach thereof, will be settled by arbitration in Los Angeles
or Orange County, California in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, using
one arbitrator, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction.

 

6

--------------------------------------------------------------------------------

 

13.   Limit on Payments by the Company. Executive shall bear all expense of, and
be solely responsible for, all federal, state, local or foreign taxes due with
respect to any payment received hereunder, including, without limitation, any
excise tax imposed by Section 4999 of the Code; provided, however, that any
payment or benefit received or to be received by Executive in connection with a
Change of Control or the termination of Executive’s employment (whether payable
pursuant to the terms of this Letter Agreement (“Contract Payments”) or any
other plan, arrangements or agreement with the Company or any affiliate
(collectively with the Contract Payments, the “Total Payments”) shall be reduced
to the extent necessary so that no portion thereof shall be subject to the
excise tax imposed by Section 4999 of the Code but only if, by reason of such
reduction, the net after-tax benefit received by Executive shall exceed the net
after-tax benefit received by Executive if no such reduction was made. For
purposes of this Section 13, “net after-tax benefit” shall mean (i) the total of
all payments and the value of all benefits which Executive receives or is then
entitled to receive from the Company that would constitute “parachute payments”
within the meaning of Section 280G of the Code, less (ii) the amount of all
federal, state and local income taxes payable with respect to the foregoing
calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to Executive (based on the rate in effect for such year
as set forth in the Code as in effect at the time of the first payment of the
foregoing), less (iii) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) above by Section 4999 of the Code. The
foregoing determination shall be made by a nationally recognized accounting firm
(the “Accounting Firm”) selected by the Company and reasonably acceptable to
Executive (which may be, but will not be required to be, the Company’s
independent auditors). The Accounting Firm shall submit its determination and
detailed supporting calculations to both Executive and the Company within
fifteen (15) days after receipt of a notice from either the Company or Executive
that Executive may receive payments which may be “parachute payments.” If the
Accounting Firm determines that such reduction is required by this Section 13,
Executive, in Executive’s sole and absolute discretion, may determine which
Total Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
and the Company shall pay such reduced amount to Executive. If the Accounting
Firm determines that no reduction is necessary under this Section 13, it will,
at the same time as it makes such determination, furnish Executive and the
Company an opinion that Executive shall not be liable for any excise tax under
Section 4999 of the Code. Executive and the Company shall each provide the
Accounting Firm access to and copies of any books, records, and documents in the
possession of Executive or the Company, as the case may be, reasonably requested
by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and
calculations contemplated by this Section 13. The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by this Section 13 shall be borne by the Company.

If this Letter Agreement sets forth our agreement on the subject matter hereof,
kindly sign and return to us the enclosed copy of this letter which will then
constitute our legally binding agreement on this subject and supersedes any
prior discussions or agreements on this subject.

         
 
  Sincerely,    
 
       
 
  Clarient, Inc.    
 
       
 
  /S/ Ronald A. Andrews
 
By: Ronald A. Andrews, Vice Chairman and CEO    

I agree to the terms and conditions of this Letter Agreement.

     
/S/ Michael J. Pellini
 
Michael J. Pellini, M.D.
   

 

7

--------------------------------------------------------------------------------

 

GENERAL RELEASE AND AGREEMENT

This GENERAL RELEASE AND AGREEMENT (hereinafter the “Release”) is made and
entered into as of this      day of      , 20     , by and between CLARIENT,
INC. (the “Company”) and (“Executive”).

1. Background. The parties hereto acknowledge that this Release is being entered
into pursuant to the terms of the Letter Agreement, dated November [     ], 2009
(the “Letter Agreement”), between the Company and Executive and in consideration
of the payments and other benefits set forth in the Letter Agreement. As used in
this Release, any reference to the Company shall include its predecessors and
successors and, in their capacities as such, all of its present, past, and
future directors, officers, Executives, attorneys, insurers, agents and assigns,
as well as all Company affiliates, subdivisions, subsidiaries and parents,
including without limitation Safeguard Scientifics, Inc. and its subsidiaries
(collectively, the “Company Affiliates”) and their respective past, present and
future directors, officers, Executives, consultants, attorneys, insurers, agents
and assigns; and any reference to Executive shall include, in their capacities
as such, his attorneys, heirs, administrators, representatives, agents, and
assigns.

2. General Release.

(a) Executive, for and in consideration of the separation payments and other
benefits offered to him or her by the Company specified in the Letter Agreement
that accompanies this Release and intending to be legally bound, does hereby
REMISE, RELEASE AND FOREVER DISCHARGE the Company and the Company Affiliates, of
and from any and all causes of actions, suits, debts, claims, and demands
whatsoever in law or in equity, which he, his heirs, executors or administrators
may have, ever had or now have, that arise out of or are in any way related to
events, acts, conduct, or omissions occurring from the beginning of the
Executive’s employment with the Company and/or the Company Affiliates to the
date of this Release      , and particularly, but without limitation, any claims
arising from or relating in any way to his employment or the separation of his
employment relationship with the Company, including, but not limited to, any
claims arising under any federal, state, or local laws, including Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq.,
(“Title VII”), the Age Discrimination in Employment Act, 29 U.S.C. Section 621
et seq. (“the ADEA”), the Americans with Disabilities Act, 42 U.S.C.
Section 12101 et seq. (“ADA”), the Executive Retirement Income Security Act of
1974, 29 U.S.C. Section 301, et seq., as amended (“ERISA”), and any and all
other federal, state or local laws, and any common law claims now or hereafter
recognized, including claims for wrongful discharge, slander and defamation, as
well as all claims for counsel fees and costs.

(b) By signing this Release, Executive represents that Executive has not
commenced any proceeding against the Company or any Company Affiliate in any
forum (administrative or judicial) concerning Executive’s employment.

(c) Executive agrees and covenants not to sue or to bring, or assign to any
third person, any claims or charges against the Company or any Company Affiliate
with respect to any known matter arising before the date of this Release or
covered by the release and not to assert against the Company or any Company
Affiliate in any action, grievance, suit, litigation or proceeding any known
matter before the date of this Release or covered by the release. Executive and
the Company agree that in the event of a breach of any covenant of this Release
or the Letter Agreement by Executive or the Company or any Company Affiliate,
the party damaged as a result of such breach shall be entitled to recover costs
and reasonable attorneys’ fees in an action relating to such breach, in addition
to compensatory damages.

 

1

--------------------------------------------------------------------------------

 

(d) Anything herein to the contrary notwithstanding, neither party is released
from any of his, her or its obligations under this Release or the Letter
Agreement, and each party confirms that such obligations are the only
obligations of the Company or its affiliates in connection with the cessation of
Executive’s service with the Company.

(e) Executive acknowledges that this Release extends to all causes of action,
suits, debts, claims and demands referred to in (a) above, known or unknown,
suspected or unsuspected. By signing this Release, Executive expressly waives
all rights under Section 1542 of the California Civil Code, which reads in full
as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

(f) By signing this Release and the Letter Agreement and by making the payments
and providing the benefits contemplated by the Letter, the Company does not
admit any liability, wrongdoing or fault and expressly denies any such
liability, wrongdoing or fault.

3. Confidentiality; Non-Disparagement.

(a) Except to the extent required by law, including SEC disclosure requirements,
the Executive agrees that the terms of this Release will be kept confidential by
Executive, except that Executive may advise his or her family and confidential
advisors.

(b) Executive will not at any time knowingly reveal to any person or entity any
of the trade secrets or confidential information of the Company or the Company
Affiliates or of any third party which the Company is under an obligation to
keep confidential (including, but not limited to, trade secrets or confidential
information respecting inventions, products, designs, methods, know-how,
techniques, systems, processes, software programs, works of authorship, customer
lists, projects, plans, and proposals), and Executive shall keep secret all
confidential matters relating to the Company or the Company Affiliates and shall
not use or attempt to use any such confidential information in any manner which
injures or causes loss or may reasonably be calculated to injure or cause loss
whether directly or indirectly to the Company or the Company Affiliates. These
restrictions contained in this sub-paragraph (b) shall not apply to:
(i) information that at the time of disclosure is in the public domain through
no fault of Executive; (ii) information received from a third party outside of
the Company that was disclosed without a breach of any confidentiality
obligation; (iii) information approved for release by written authorization of
the Company or the Company Affiliate; or, (iv) information that may be required
by law or an order of the court, agency or proceeding to be disclosed; provided,
Executive shall provide the Company notice of any such required disclosure once
Executive has knowledge of it and will help the Company at the Company’s expense
to the extent reasonable to obtain an appropriate protective order.

 

2

--------------------------------------------------------------------------------

 

(c) Executive represents that Executive has not taken, used or knowingly
permitted to be used any memorandum, reports, lists, records, drawings,
sketches, specifications, software programs, data, documentation, or other
materials of any nature relating to any matter within the scope of the business
of the Company, the Company Affiliates, or their partner companies or concerning
any of its dealings or affairs otherwise than for the benefit of the Company or
the Company Affiliates. Executive shall not, after his or her termination of
employment, use or knowingly permit to be used any such memoranda, reports,
lists, records, drawings, sketches, specifications, software programs, data,
documentation, or other materials, it being agreed that all of the foregoing
shall be and remain the sole and exclusive property of the Company, the Company
Affiliate or client of the same, as the case may be, and that immediately upon
the effectiveness of Executive’s resignation from employment, Executive shall
deliver all of the foregoing, and all copies thereof, to the Company at its main
office.

(d) In accordance with normal ethical and professional standards, the Company
and Executive agree that they shall not in any way engage in any conduct or make
any statement that would defame or disparage the other, or make to, or solicit
for, the media or others, any comments, statements (whether written or oral),
and the like that may be considered to be derogatory or detrimental to the good
name or business reputation of either party. It is understood and agreed that
the Company’s obligation under this paragraph extends only to the conduct of the
Company’s officers and all of its directors. The only exception to the foregoing
shall be in those circumstances in which Executive or the Company is obligated
to provide information in response to an investigation by a duly authorized
governmental entity or in connection with legal proceedings.

4. Indemnity.

(a) This Release shall not release the Company or any of its insurance carriers
from any obligation it or they might otherwise have to defend and/or indemnify
Executive and hold him harmless from any claims made against him arising out of
his activities as director or officer of the Company, to the same extent as the
Company or its insurance carriers are or may be obligated to defend and/or
indemnify and hold harmless any other director or officer and the Company
affirms its obligation to provide indemnification to Executive as a director,
officer, former director, or former officer of the Company, as set forth in the
Company’s bylaws and charter documents in effect on the date of the Letter
Agreement; provided however, to the extent that such obligation of the Company
or its insurance carriers has increased in any scope or amount on the date
Executive’s employment with the Company ceases, Executive shall benefit from
such increase as of such date.

(b) Executive agrees that Executive will personally provide reasonable
assistance and cooperation to the Company, at the Company’s expense, in
activities related to the prosecution or defense of any pending or future
lawsuits or claims involving the Company.

 

3

--------------------------------------------------------------------------------

 

5. General.

(a) Executive acknowledges and understands that Executive has been given
twenty-one (21) days from the Termination Date to consider and review the terms
of this Agreement prior to signing it, and releasing Executive’s claims.
Executive understands that Executive may execute this Agreement in Executive’s
sole and absolute discretion, prior to the expiration of said twenty-one
(21) day period; however, Executive may not sign this Agreement prior to the
Termination Date. Executive also understands that this Release is revocable by
Executive for a period of seven (7) days following execution of the Release.
This Release shall not become effective or enforceable until this seven (7) day
revocation period has ended.

(b) Executive has carefully read and fully understands all the provisions of the
Notice and the Release which sets forth the entire agreement between Executive
and the Company, and Executive acknowledges that Executive has not relied upon
any representation or statement, written or oral, not set forth in this
document.

(c) Executive and Company agree that any breach of this Release or corresponding
Letter Agreement by Executive or Company will cause irreparable damage to the
other party and that in the event of such breach the other party shall have, in
addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the
obligations hereunder (d) No term or condition set forth in this Release may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Executive and a duly authorized officer of
the Company.

(e) Any waiver by the Company of a breach of any provision of this Release shall
not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision hereof.

(f) The parties agree that in no way does this Release preclude Executive from
enforcing his ownership rights pertaining to any stock options or RSAs which may
have been purchased by Executive or granted to Executive by the Company pursuant
to a written stock option or RSA grant and/or as memorialized in a written Board
Resolution (and as reported periodically in the Company’s proxy statements).

IN WITNESS WHEREOF, the parties have executed this Release as of the date
written above.

         
Dated:
                                       
 
 
 
 
 
  CLARIENT INC.
 
 
Dated:
  By:________________

 

4