Exhibit 10.5

 

RETIREMENT AGREEMENT

 

THIS RETIREMENT AGREEMENT (this “Agreement”) is made and entered into as of the
16th day of January, 2009 by and between QUIDEL CORPORATION, a Delaware
corporation (the “Company”), and CAREN L. MASON, an individual (“Mason”).

 

BACKGROUND

 

A.            Mason currently serves as the Company’s President and Chief
Executive Officer and as a member of the Company’s Board of Directors.  Pursuant
to pre-existing and continuing employment and related understandings and
agreements, Mason’s employment with the Company is “at will.”

 

B.            Mason previously advised the Company, and the Company has publicly
announced, that Mason will retire from her employment with the Company effective
June 1, 2009 (the “Retirement Date”).

 

C.            The Company and Mason are entering into this Agreement to confirm
their understandings as to Mason’s employment prior to the Retirement Date and
each party’s commitments and obligations on and after the Retirement Date.

 

AGREEMENT

 

1.             Employment.  The Company shall continue to employ Mason on a
full-time basis, and Mason accepts such continued employment, upon and subject
to the terms and conditions set forth herein.  Mason acknowledges and agrees
that, as of March 1, 2009, Mason’s title will be changed to “Special Advisor to
the Chief Executive Officer,” a position that will report to, and involve duties
determined by, the Chief Executive Officer.  In such role, Mason agrees to make
herself available for assignments and to dutifully complete such assignments to
the best of her ability at such locations as reasonably designated by the Chief
Executive Officer.  In connection with scheduling of assignments and travel, if
any, in her role as Special Advisor to the Chief Executive Officer, the Company
and Mason agree to schedule assignments with at least fourteen days notice and
as mutually agreed.

 

Concurrently herewith, (a) the Employment Agreement between the Company and
Mason dated August 20, 2004, as amended (the “Superseded Employment Agreement”),
shall automatically become void and superseded in its entirety by this Agreement
(except for those provisions of the Superseded Employment Agreement that are
expressly incorporated herein by reference pursuant to Section 5 hereof), and
(b) the term of the Agreement Re: Change in Control between the Company and
Mason dated August 20, 2004, as amended (the “CIC Agreement”), shall
automatically expire (after which the CIC Agreement will be of no force or
effect).  For the avoidance of doubt, (x) except as expressly provided herein,
Mason shall not be entitled to any payments or benefits of any kind in
connection with a termination or resignation for any reason and (y) that certain
Indemnification Agreement dated August 18, 2005 between the Company and Mason
shall continue in full force and effect pursuant to its terms.

 

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2.             Term.  Pursuant to the Retirement/Resignation attached hereto as
Exhibit A, which Mason has executed and delivered concurrently with this
Agreement, (a) Mason will automatically cease to be a member of the Company’s
Board of Directors on March 1, 2009, and (b) the term of Mason’s employment
shall continue until, and then automatically terminate, on June 1, 2009, unless
earlier terminated.

 

3.             Employment Compensation.  Until March 1, 2009, Mason’s base
salary shall continue at the same level as in effect as of the date of this
Agreement.  Effective March 1, 2009, Mason’s base salary shall automatically be
reduced to $10,000 per month (i.e., March, April, May), less applicable
withholdings and subject to the Company’s payroll policies.

 

Mason’s employee benefits shall continue until June 1, 2009 at the same levels
as are in effect as of the date of this Agreement; provided, however, that Mason
shall not receive any further grants of equity incentive awards nor shall she be
eligible to participate in any bonus plans applicable to fiscal year 2009 or any
year thereafter.  Mason shall, however, remain eligible to receive a bonus under
the Company’s existing 2008 cash incentive bonus plan if and to the extent that
(a) an allocation is made to Mason by the Board of Directors or the Compensation
Committee of the Board of Directors, (b) the relevant performance metrics are
achieved, and (c) Mason remains employed by the Company through the earlier of
(1) the payment date of the 2008 bonus, if any, or (2) the Retirement Date.

 

4.             Releases.  On each of (a) the date hereof, and (b) a date of
Mason’s choice between May 1, 2009 and May 11, 2009 inclusive, and as a material
condition to Mason’s receipt of the benefits set forth in Section 6 hereof,
Mason shall execute and deliver to the Company (and thereafter not revoke) a
Release in the form attached hereto as Exhibit B.  (For avoidance of doubt, the
parties acknowledge and agree that Mason’s failure to deliver (and not
thereafter revoke) either executed Release in the time period specified above
shall result in no further vesting of Mason’s equity awards after the date of
this Agreement.)

 

5.             Mason’s Acknowledgements and Obligations.  As a material
condition to Mason’s receipt of the benefits set forth in Section 6 hereof,
Mason acknowledges and reaffirms Section 5 (At Will Employment),
Section 6(f) (re: IRC Section 409A), Section 7 (Inventions), Section 8
(Nondisclosure of Confidential Information), Section 9 (Return of Materials at
Termination) and Section 10 (Non-Solicitation) of the Superseded Employment
Agreement, which provisions are incorporated herein by reference and shall
survive the termination of Mason’s employment.

 

6.             Vesting of Equity Awards.  The vesting of equity awards
(restricted stock and options) held by Mason shall not be accelerated.  Such
equity awards shall, during Mason’s continuing employment, continue to vest and
be governed in accordance with the applicable equity incentive plan and specific
equity award grant documentation.  All equity awards held by Mason at the time
of the termination of her employment shall also be handled in accordance with
the applicable equity incentives plans and grant documentation.

 

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7.             Early Resignation or Termination.  In the event that Mason either
(a) voluntarily resigns her employment with an effective date prior to the
Retirement Date, or (b) is terminated by the Company with “Cause” (as defined
below), Mason shall not be entitled to the payments or vesting benefits
described in Section 3 or Section 6 hereof, but shall only be entitled to
salary, accrued benefits and other amounts legally owing to Mason through the
date of employment termination.  The Company shall thereafter have no further
obligations to Mason under this Agreement.

 

In the event that Mason is terminated by the Company without “Cause” (as defined
below), provided that Mason executes and delivers to the Company within seven
(7) calendar days after such termination (and thereafter does not revoke) a
Release in the form attached hereto as Exhibit B, Mason shall be entitled to
receive the following severance payments and benefits:  (i) a lump-sum payment
equal to the remaining amount of base salary that Mason would have received if
the term of this Agreement had continued until June 1, 2009, less applicable
withholdings, payable within thirty (30) days from the date of termination,
(ii) the employee benefits described in the second paragraph of Section 3 hereof
through June 1, 2009 and (iii) the vesting of equity awards, as and to the
extent described in and contemplated by Section 6 hereof, as though Mason’s
employment continued through June 1, 2009.

 

For purposes hereof, “Cause” shall be limited to the following:  (1) fraud; (2) 
personal dishonesty involving money or property of the Company or that results
in material harm to the Company; (3) Mason’s willful misconduct that is
materially injurious to the Company; (4) a serious breach of a fiduciary duty to
the Company involving personal profit; (5) Mason’s conviction for a felony
(including via a guilty or nolo contendere plea), excluding traffic offenses;
(6) Mason’s willful and continued neglect of duties (other than any such failure
resulting from her incapacity because of physical or mental illness); or
(7) Mason’s material breach of this Agreement; provided, however, that
unsatisfactory job performance shall not be considered Cause for termination of
Mason’s employment by the Company.  Mason shall be afforded a reasonable
opportunity to cure any willful neglect of her duties and any other alleged
material breach of this Agreement, according to the following terms.  The
Company’s Board of Directors shall give Mason written notice stating with
reasonable specificity the nature of the circumstances determined by the Board
of Directors in good faith to constitute willful neglect or other material
breach, and that failure to cure or correct such circumstances or breach will
result in termination of employment for “Cause” under this Agreement.  Mason
shall have thirty (30) days from her receipt of such notice to cure such
circumstances or such breach if such breach is reasonably susceptible of cure. 
If, in the reasonable good faith judgment of the Board of Directors, the alleged
breach is not reasonably susceptible of cure, or such circumstances or material
breach has not satisfactorily cured within such thirty (30) day period, such
neglect of duties or material breach shall thereupon constitute “Cause.”

 

8.             Confidentiality of Business and Legal Information.  Mason
acknowledges that the Company holds as confidential and/or privileged certain
information (including, but not limited to, non-public information obtained by
Mason in her position as an officer of the Company), as well as certain trade
secret information and knowledge concerning the intimate and confidential
affairs of the Company and the various phases of its business, including, for
example and without limitation, processes, formulae, data and know-how,
improvements, inventions, techniques, marketing plans, strategies, forecasts,
mailing lists, customer lists, pricing

 

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information, manufacturing processes, distribution systems, computer systems or
programs and other types of similar information within Mason’s knowledge by
virtue of her employment with the Company (collectively, the foregoing shall be
referred to herein as “Confidential Trade Secret, Proprietary and Legal
Information”). Mason agrees that all Confidential Trade Secret, Proprietary and
Legal Information shall be the sole property of the Company and that the Company
shall be and is the sole owner of all patents and other rights in connection
therewith as well as any privileges.  Mason further agrees to hold in strictest
confidence and to refrain from using or disclosing to any other person or entity
any Confidential Trade Secret, Proprietary and Legal Information, other than the
Company, its employees, Directors and representatives.  In that regard, Mason
expressly acknowledges that she has not disclosed (other than to the Company,
its employees, Directors and representatives) any Confidential Trade Secret,
Proprietary and Legal Information.  Mason specifically agrees that she will not
disclose any Confidential Trade Secret, Proprietary and Legal Information at any
time in the future (other than to the Company, its employees, Directors and
representatives).  Mason further represents and warrants that, on the last day
of her employment, she will have returned to the Company all property and
documents of the Company, whether kept electronically or in hard copy form and
will have retained no copies thereof.  This Section supplements the obligations
of Mason contained in Section 5 hereof.

 

9.             Miscellaneous.

 

a.             Notices.  Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and delivered in person or sent by
registered or certified mail to Mason’s residence in the case of Mason or to its
principal office in the case of the Company.

 

b.             Arbitration.  Any dispute arising out of this Agreement shall be
resolved exclusively by final and binding arbitration, before a single
arbitrator, in San Diego, California pursuant to the rules of JAMS.  Judgment
upon any such arbitration award may be entered by any state or federal court of
competent jurisdiction.  In the event any party to this Agreement initiates any
arbitration action or proceeding in connection with enforcement of this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover its costs and attorney’s fees from the non-prevailing party.

 

c.             Waiver.  The waiver of any provision of this Agreement shall not
operate or be construed as a waiver of any other provision of this Agreement. 
No waiver shall be valid unless in writing and executed by the party to be
charged therewith.

 

d.             Severability/Modification.  In the event that any clause or
provision of this Agreement shall be determined to be invalid, illegal or
unenforceable, such clause or provision may be severed or modified to the extent
necessary, and, as severed and/or modified, this Agreement shall remain in full
force and effect.

 

e.             Assignment.  This Agreement may not be assigned by Mason.  The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.

 

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f.              Amendment.  This instrument may not be amended except by an
agreement in writing signed by both parties.

 

g.             Governing Law and Jurisdiction.  This Agreement shall be
interpreted, construed, and enforced under the internal laws of the State of
California.  The courts and authorities of the State of California shall have
sole jurisdiction and venue for purposes of enforcing the arbitration agreement
above.

 

h.             Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one in the same Agreement.

 

[Signature page follows.]

 

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

 

 

“COMPANY”

 

QUIDEL CORPORATION

 

 

 

 

 

By:

  /s/ Mark A. Pulido

 

 

Name:

Mark A. Pulido

 

 

Title:

Chairman of the Board of Directors

 

 

 

“MASON”

 

CAREN L. MASON

 

 

 

 

 

By:

  /s/ Caren L. Mason

 

 

Caren L. Mason

 

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EXHIBIT A

 

Date:

 

January 16, 2009

 

 

 

To:

 

Board of Directors

 

 

Quidel Corporation

 

 

 

From:

 

Caren L. Mason

 

 

 

Subject:

 

Retirement/Resignation

 

This letter is to confirm my resignation as a Director and President and Chief
Executive Officer of Quidel Corporation (the “Company”), effective as of
March 1, 2009, together with all other employment, Director and trustee
positions held with the Company or any of its subsidiaries or with their
respective employee plans (except for my continued employment as Special Advisor
to the Chief Executive Officer, from which position I confirm my resignation as
of June 1, 2009).

 

This letter is also to confirm that my resignation is not a result of any
disagreement with the Company as to the Company’s operations, policies or
practices.

 

 

/s/ Caren L. Mason

 

Caren L. Mason

 

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EXHIBIT B

 

GENERAL RELEASE

 

In consideration of the agreement by Quidel Corporation (the “Company”)  to
provide certain benefits to Caren L. Mason (“Mason”), Mason hereby gives the
following General Release effective on                       , 2009.

 

1.             Release of Claims.  Mason hereby irrevocably and unconditionally
releases, acquits and forever discharges the Company and its affiliated
companies and persons from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, remedies, costs, losses, debts, expenses and
attorneys’ fees, including those arising out of or in connection with Mason’s
employment with and consulting services for the Company and/or the termination
thereof.  (All such charges, complaints, etc. are collectively referred to
herein as “Claims.”)  The Claims irrevocably and unconditionally released,
acquitted and forever discharged include, for example and without limitation,
Claims arising under the federal Age Discrimination in Employment Act of 1967,
which prohibits discrimination on the basis of age, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1866, the Americans With
Disabilities Act, the California Fair Employment and Housing Act, the California
Labor Code, and common law employment and wrongful discharge claims.

 

The Claims irrevocably and unconditionally released, acquitted and forever
discharged by Mason extend to all such Claims by Mason against any and all of
the current and former owners, stockholders, predecessors, successors, assigns,
agents, directors, officers, employees, representatives, attorneys, divisions,
parents, subsidiaries, affiliates (and the directors, officers, employees,
representatives and attorneys of such divisions, parents, subsidiaries and
affiliates) of the Company and all other persons acting by, through, under or in
concert with any of them.  (All such persons and entities, as well as the
Company are collectively referred to herein as the “Releasees”).  The Claims
irrevocably and unconditionally released, acquitted and forever discharged
herein by Mason also extend to all Claims which Mason now has, owns or holds, or
contends to have, own or hold or which Mason at any time heretofore had, owned
or held or contended to hold against any of the Releasees.  Mason represents
that she has not heretofore assigned or transferred or purported to have
assigned or transferred to any person or entity any Claims released, acquitted
and forever discharged herein.  This General Release (a) shall not affect any
Claims that Mason may have which arise solely after the effective date of this
General Release, (b) shall not apply to any of the Company’s obligations under
that certain Retirement Agreement dated as of January 16, 2009 (the
“Agreement”), (c) shall not apply to any of the Company’s obligations under that
certain Indemnification Agreement dated as of August 18, 2005 (the
“Indemnification Agreement”) and (d) shall not serve as a release of any claims
that cannot be released as a matter of law, including but not limited to
indemnification under the California Labor Code.

 

2.             Release of Unknown and Unsuspected Claims.  For the purpose of
implementing a full and complete release and discharge of the Releasees, Mason
expressly acknowledges that this General Release is intended to include in its
effect, without limitation, all Claims (as defined

 

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above) which Mason does not know or suspect to exist in her favor at the time of
execution hereof, and this General Release contemplates the extinguishment of
any and all such Claims.  In this regard, Mason expressly waives the provisions
of Section 1542 of the California Civil Code, which state:

 

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

 

Furthermore, Mason hereby expressly waives and relinquishes any rights and
benefits she may have under other statutes or common law principles of similar
effect.  Mason understands that the facts under which she gives this full and
complete release and discharge of the Releasees may hereafter prove to be
different than now known or believed by her and Mason hereby accepts and assumes
the risk thereof and agrees that her full and complete release and discharge of
Releasees shall remain effective in all respects and not be subject to
termination, rescission or modification by reason of any such difference in
facts.

 

3.             No Complaint, Charge or Lawsuit Pending.  Mason represents that
she has not filed with any governmental agency or court any complaint, charge or
lawsuit against any of the Releasees involving any Claims released herein, and
that, except as otherwise permitted by law, she will not do so at any time
hereafter; provided, however, this paragraph shall not limit Mason from filing
an action for the purpose of enforcing her rights under the Agreement or the
Indemnification Agreement or from filing a charge or complaint of discrimination
with the EEOC.

 

4.             Severability.  The provisions of this General Release are
severable, and if any part of this General Release is found unenforceable,
invalid or illegal, the other parts of this General Release shall remain fully
valid and enforceable.

 

5.             Governing Law.  This General Release and any dispute concerning
the validity, interpretation or breach of any term or condition hereof shall be
construed and interpreted under and in conformance with the laws of the State of
California applicable to contracts negotiated and to be fully performed in the
State of California.

 

6.             Arbitration.  Any dispute concerning the validity, interpretation
or breach of this General Release or any term or condition hereof or any dispute
concerning the Claims released herein shall be resolved exclusively by final and
binding arbitration as provided in Section 9(b) of the Agreement.  Judgment upon
any such arbitration award may be entered by any state or federal court of
competent jurisdiction.  This General Release shall be admissible in any
proceeding to enforce its terms.

 

7.             Construction.  Mason has had ample opportunity to make
suggestions or changes to the terms and language of this General Release and
agrees that principles of contract construction against the drafter shall have
no application hereto.  Mason agrees that this General Release should be
construed fairly and not in favor of or against Mason or the Company as the
drafter.

 

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8.             Waiting Period and Right of Revocation.  Mason hereby releases
Releasees from any and all claims for age discrimination, whether under state or
federal law.  Mason understands that pursuant to federal law, Mason has the
right to review this General Release for a full twenty-one (21) calendar day
period before executing the same, and that Mason has the right to revoke this
General Release in its entirety at any time within seven (7) calendar days after
executing the same and that this General Release is not effective until such
seven (7) day revocation period has expired.  Mason acknowledges her right to
consult with her attorney prior to signing this General Release, and that she
has been advised to consult with her attorney prior to such signing.

 

9.             Full Understanding of Terms.  Mason represents and agrees that
she fully understands her right to discuss all aspects of this General Release
with her private attorney; that to the extent, if any, she desires, she has
availed herself of this right; that she has carefully read and fully understands
all of the provisions of this General Release; and that she is voluntarily
entering into it.

 

IN WITNESS WHEREOF, Mason and the Company acknowledge agreement with the
foregoing by their signatures set forth below.

 

 

 

CAREN L. MASON

 

 

 

 

 

By:

 

 

 

Caren L. Mason

 

 

 

 

 

QUIDEL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

Robert J. Bujarski

 

 

Title:

Senior Vice President, General

 

 

 

Counsel and Corporate Secretary

 

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