Exhibit 10.19

Biolase, Inc.

4 Cromwell

Irvine, California 92618

December 28, David C. Dreyer

c/o Biolase, Inc.

4 Cromwell

Irvine, California  92618

 

Re:

Transition Arrangement Letter

Dear David:

The purpose of this letter is to confirm the circumstances of your employment as
Senior Vice President and Chief Financial Officer of Biolase, Inc. (the
“Company”).  Our intent is to facilitate the Company’s transition to a new Chief
Financial Officer and to provide you with a monetary payment (the “Transition
Payment”) in exchange for your help and assistance in this transition.

We plan to continue your employment as Senior Vice President and Chief Financial
Officer at your current base salary and benefits, through and including January
13, 2017 (the “Final Transition Date”). During that period of time, we expect
that you will devote your full business time and best efforts to the Company,
although you may be transitioning your duties and responsibilities to others, as
advised by the Chief Executive Officer.  Although our plan is to continue your
employment through the Final Transition Date, your employment status until that
time will remain “at will,” which means that either you or the Company may end
your employment at any time for any reason.

Provided that you remain employed by the Company on the Final Transition Date,
and you have performed your transitional duties to the reasonable satisfaction
of the Chief Executive Officer, and provided on the Final Transition Date you
cease to act in any capacity (including as an officer) for the Company, the
Company agrees to (i) provide you with a Transition Payment equal to $50,000.00,
payable in lump sum following the expiration of the revocation period set forth
in the form of Separation Agreement with Release of All Claims attached hereto
(the “Separation Agreement”), (ii) the vesting of your stock options existing as
of the date hereof such that a total of 623,026 option shares shall be vested
and fully exercisable as of the Separation Date (as defined in the Separation
Agreement), (iii) extend the period to exercise your vested stock options for a
period of one year from the Separation Date (as defined in the Separation
Agreement), and (iv) subject to your timely election of COBRA continuation
coverage, reimburse you for COBRA premiums for you (and your eligible
dependents) under the Company’s medical and dental benefit plans in which you
participated in as of the Final Transition Date, for a period of six (6) months
following the Separation Date.  The foregoing benefits shall be subject to your
execution and non-revocation of the attached Separation Agreement with Release
of All Claims within the time-period specified in such agreement.  

If your employment ends for any reason before the Final Transition Date (unless
by mutual agreement between you and the Company), you will not be eligible for
the Transition Payment or the other benefits described in this letter.  

Please sign below to indicate your acceptance of this agreement. If this letter
is not countersigned by you on or before 5:00 p.m. Pacific Time on December 30,
2016, the offer contained herein shall be of no force and effect and shall
expire without any further action on the part of the Company.

 

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We thank you, David, for your hard work, dedication, and contribution to the
Company, and we look forward to a mutually beneficial transition.

 

Very truly yours,

 

/s/ Harold C. Flynn, Jr.

 

 

 

 

 

Harold C. Flynn, Jr.

 

 

Chief Executive Officer

 

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

/s/ David C. Dryer

 

Dated: December 30, 2016

David C. Dreyer

 

 

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EXHIBIT A

SEPARATION AGREEMENT WITH GENERAL RELEASE OF ALL CLAIMS

This Separation Agreement With General Release of All Claims (“Agreement”) is
entered into by and between David C. Dreyer (“Mr. Dreyer”), and Biolase, Inc., a
Delaware corporation (the “Company”), and is intended by the parties hereto to
settle fully and finally any claims that Mr. Dreyer may have against the Company
and all obligations of the Company to Mr. Dreyer, except as set forth in and
incorporated into this Agreement.

a.

Employment Separation.  Mr. Dreyer’s employment with the Company ended effective
January 13, 2016 (the “Separation Date”).  From and after the Separation Date,
Mr. Dreyer shall no longer be employed by, or act in any capacity (including as
a director) for, the Company, and Mr. Dreyer hereby resigns from all Company
positions held and on any Company subsidiary boards as of the Separation Date.

b.

Termination Pay.  Mr. Dreyer acknowledges that he has been paid his base salary
and accrued but unused vacation through the Separation Date  (“Termination
Pay”).  Mr. Dreyer shall submit expense reimbursement requests with suitable
documentation within thirty (30) days following the Separation Date, and the
Company shall promptly process such requests in accordance with its expense
reimbursement policies.

c.

Payments; Extension of Vesting and Exercise Periods; COBRA
Premiums.  In  consideration for the promises contained herein and subject to
Mr. Dreyer’s continued compliance with the terms and conditions of this
Agreement and his execution and non-revocation of this Agreement within the
timeframe specified herein, Mr. Dreyer shall receive the following benefits:  

 

i.

Compensation equal to $50,000.00, less all applicable withholding and
deductions. The foregoing compensation shall be payable in lump sum following
the non-revocation and expiration of the seven (7) day revocation period
identified below, and shall be paid in accordance with the Company’s standard
payroll practices and procedures.

 

ii.

Mr. Dreyer’s existing stock options shall be vested such that a total of 623,026
option shares shall be vested and fully exercisable as of the Separation Date,
and the period to exercise such vested stock options shall be extended (as
specified in the underlying award agreement) for a period of one year following
the Separation Date.

 

iii.

Subject to Mr. Dreyer’s timely election of COBRA continuation coverage, the
Company shall pay COBRA premiums for Mr. Dreyer (and his eligible dependents)
under the Company’s medical and dental benefit plans in which Mr. Dreyer
participated in as of the Separation Date, for the six (6) month period
following the Separation Date.

d.

Vested Retirement Benefits.  Nothing in this Agreement shall limit, expand upon,
or alter in any way any vested retirement benefits that Mr. Dreyer has or is
entitled to receive under any Company sponsored 401(k) or other retirement plan
to which Mr. Dreyer may have been entitled to participate by virtue of his
employment.  Mr. Dreyer’s rights and obligations shall continue to be governed
by the terms of such plans, as they presently exist or as they may permissibly
be amended, and shall be based upon his Separation Date.

e.

No Other Payments.  Other than whatever is specifically provided for in this
Agreement, Mr. Dreyer acknowledges that there are no other sums or benefits of
any nature whatsoever due and owing to him, including without limitation any
sums or benefits set forth in that certain Employment Agreement, dated February
22, 2015, by and between the Company and Mr. Dreyer (the “Employment
Agreement”), other than whatever payments or benefits are specifically provided
for and set forth in this Agreement.  In consideration for this Agreement, Mr.
Dreyer specifically waives any claim that he may have to any past, present, or
future compensation of any nature whatsoever arising out of his prior employment
with the Company.

f.

Confirmation Of Payment Of Wages.   Mr. Dreyer acknowledges that he has been
paid all wages due and owing to him from the Company, including all minimum
wages, overtime compensation, commissions, bonuses, waiting-time penalties, and
liquidated damages.  Accordingly, Mr. Dreyer understands that the release
provisions below release and discharge the Company from any and all claims that
he may have against the

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Company for unpaid wages and other compensation including, but not limited to,
any claims for unpaid wages, salary, bonuses, commissions, stock, stock options,
vacation pay, holiday pay, sick or disability pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation.

g.

Biolase Proprietary Information. As a material inducement to Biolase to enter
into this Agreement, Mr. Dreyer covenants and represents that (i) he has
complied with the terms and conditions of the Biolase Proprietary Information
Agreement at all times during his employment with Biolase; and (ii) he will
continue to comply with such terms for the periods specified therein.  The terms
of the Biolase Proprietary Agreement are incorporated into this Agreement by
reference and made a part hereof.

h.

Continuing Obligations of Mr. Dreyer.   To the extent that Mr. Dreyer has come
into contact with confidential or trade secret information concerning the
Company and its operations or concerning the Company’s customers, prospective
customers, or projects, Mr. Dreyer will continue to protect the confidentiality
of such information.  In addition, Mr. Dreyer represents and warrants that, he
has returned to the Company and has not copied or duplicated in any manner
whatsoever, all tangible and intangible property (including, without limitation,
all computer hardware, whether portable or stationary, and software), books,
records, documents and reports owned by, or pertaining to the business of, the
Company or any of the Company’s existing or prospective clients that was in Mr.
Dreyer’s possession or under Mr. Dreyer’s direct or indirect control as of the
Separation Date.  If Mr. Dreyer shall come into possession of any property
(tangible or intangible), books, records, documents or reports of the type
described above after the Separation Date, Mr. Dreyer will promptly return them
to the Company.

i.

Complete Release.  Mr. Dreyer, on behalf of himself, his heirs and assigns,
fully and forever releases and discharges the Company and, as the case may be,
each of its respective employees, shareholders, officers, directors, agents,
attorneys, predecessors, successors, assigns, and affiliated corporations or
organizations, whether previously or hereafter affiliated in any manner
(collectively, the “Released Company Parties”), to the fullest extent permitted
by law, from any and all claims, demands, causes of action, charges of
discrimination, obligations, damages, attorneys’ fees, costs and liabilities of
any nature whatsoever, including all claims of race, sex, national origin,
religion, handicap and age discrimination under any federal or state statute,
whether or not now known, suspected or claimed of any nature, including without
limitation any claims, demands, causes of action, charges of discrimination,
obligations, damages, attorneys’ fees, costs and liabilities of any nature in
connection with the Employment Agreement, which Mr. Dreyer ever had, now has, or
may claim to have as of the date of this Agreement against the Released Company
Parties.  

j.

General Nature of Release.  The Release set forth above is a general release of
all claims, demands, causes of action, obligations, damages, and liabilities of
any nature whatsoever that are described in the Release and is intended to
encompass all known and unknown, foreseen and unforeseen claims which Mr. Dreyer
may have against the Released Company Parties, except that Mr. Dreyer does not
release any claims that may not be released herein as a matter of law, including
but not limited to claims for indemnity under Labor Code Section 2802, claims
that may be adjudicated before the California Workers’ Compensation Appeals
Board, claims for vested benefits or any claims for enforcement of any other
provision of this Agreement.  This Release specifically includes, without
limiting the generality of the foregoing, any claims against any Released
Company Party occurring before the effective date of this Agreement and arising
out of or related to alleged violations of any federal or state employment
discrimination laws, including, but not limited to, the California Fair
Employment and Housing Act; the Age Discrimination In Employment Act; the Older
Workers Benefit Protection Act; Title VII of the Civil Rights Act of 1964; the
Americans With Disabilities Act; the National Labor Relations Act; the Equal Pay
Act; the Employee Retirement Income Security Act of 1974; as well as claims
arising out of or related to violations of the provisions of the California
Government Code; the California Business & Professions Code, including Business
& Professions Code Section 17200 et seq.; state and federal wage and hour laws;
breach of contract; fraud; misrepresentation; common counts; unfair competition;
unfair business practices; negligence; defamation; infliction of emotional
distress; invasion of privacy; assault; battery; false imprisonment; wrongful
termination; and any other state or federal law, rule, or regulation.  Mr.
Dreyer acknowledges that his separation and the consideration offered hereunder
were based on an individual determination and were not offered in conjunction
with any group termination or group severance program and waives any claim to
the contrary, and further acknowledges that he does not presently believe he has
suffered any work-related injury or illness.  

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k.

Release of Unknown Claims.  It is the intention of Mr. Dreyer to release both
known and unknown claims of any nature whatsoever.  This includes, without
limitation, claims, which Mr. Dreyer does not know or suspect to exist in his
favor at the time of executing this release, even though such claims, if known
by him would have materially affected his settlement with the
Company.  Accordingly, Mr. Dreyer expressly waives all rights under Section 1542
of the Civil Code of the State of California, which reads as follows:

“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.”

l.

Non-Disparagement; Neutral Reference.  Mr. Dreyer agrees during the term of this
Agreement and for a period of ten (10) years thereafter, he shall not, in any
communication with any person or entity, including any actual or potential
customer, client, investor, vendor, or business partner of the Company, or any
third party media outlet, make any derogatory or disparaging or critical
negative statements – orally, written or otherwise – against the Company, or any
of its directors, officers, agents, employees, contractors, or affiliated
persons or entities.  Mr. Dreyer also agrees that unless compelled by valid
legal process he will not give or offer to provide any statements, testimony or
the like in connection with any claim, action, or demand (being contemplated or)
brought against the Company which concerns the Company, his employment or the
cessation of his employment with the Company, the Company’s business practices,
its customers and/or prospective customers, its products, and/or any other
aspect of the Company’s business, its directors, officers, agents, employees,
contractors, or affiliated persons or entities.  Further, Mr. Dreyer agrees that
if he agrees that should he be called as a witness or to provide testimony in
any case, action, and/or proceeding concerning the Company, he and/or his
counsel will contact either the Chief Executive Officer or the Secretary of the
Company immediately, but in no event later than ten (10) days before he is to be
deposed or to testify as a witness, so that the Company can take whatever
precautionary measures it deems necessary to protect from disclosure any of its
proprietary and/or confidential information and/or documents.

m.

No Other Actions.  Mr. Dreyer represents and covenants that he has not filed or
lodged any complaints or charges against any of the Released Company Parties
with any local, state, or federal agency or court.  

n.

Risk of Different Facts.  The parties to this Agreement acknowledge that they
may hereafter discover facts different from or in addition to those they now
know or believe to be true, and they expressly agree to assume the risk of the
possible discovery of additional or different facts, and agree that this
Agreement shall be and remain effective in all respects regardless of such
additional or different facts.

o.

No Future Actions.  Mr. Dreyer covenants and agrees never to commence, aid in
any way, prosecute or cause to be commenced or prosecuted any action or other
proceeding based upon any claims, demands, causes of action, obligations,
damages or liabilities which are the subject of this Agreement; provided
however, that Mr. Dreyer does not relinquish any protected rights he may have to
file a charge, testify, assist or participate in any manner in an investigation,
hearing or proceeding conducted by the Equal Employment Opportunity Commission,
the Office of Federal Contract Compliance, or any similar state human rights
agency.  However, Mr. Dreyer may not recover additional compensation or damages
as a result of such participation.

p.

Twenty-One Day Consideration Period.  This Agreement was originally given to Mr.
Dreyer on the Separation Date.  Mr. Dreyer shall have twenty-one (21) days to
consider this Agreement; provided however, that if Mr. Dreyer chooses to sign
this Agreement before the end of this twenty-one (21)-day period, Mr. Dreyer
acknowledges that he does so knowingly and voluntarily and waives any claim that
to the effect that he was not given the full twenty-one (21) days to consider
whether to sign this Agreement or did not use the entire period of time
available to consider this Agreement or to consult with an attorney.

q.

Seven Day Revocation Period.  Following execution of this Agreement, Mr. Dreyer
shall have seven (7) days to revoke this Agreement.  To be effective, the
revocation must be in writing and signed by Mr. Dreyer and must be delivered to
and received by the Company, before 5 p.m. local time of the 7th day.  This
Agreement shall become effective on the eighth (8th) day following the execution
of this Agreement.  Any revocation shall be in writing and shall be effective
upon timely receipt by the Company by: Corporate Secretary, c/o Harold C. Flynn,
Jr., Chief Executive Officer, Biolase, Inc., 4 Cromwell, Irvine, California,
92618.

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r.

Non-Assignment of Claim.  Mr. Dreyer warrants that he has made no assignment and
will make no assignment of any claim, chose in action, right of action, or any
right of any kind whatsoever, embodied in this Agreement and referred to herein,
and that no other person or entity of any kind (other than as expressly
mentioned above) had or has any interest in any of the demands, obligations,
actions, causes of action, debts, liabilities, rights, contracts, damages,
attorneys’ fees, costs, expenses, losses or claims referred to herein.

s.

Successors and Assigns.  This Agreement, and all the terms and provisions
hereof, shall be binding upon and shall inure to the benefit of the parties and
their respective heirs, legal representatives, successors and assigns.

t.

Assistance of Counsel.  Mr. Dreyer acknowledges that he has been advised to
consult with counsel of his choosing before entering into this Agreement.  The
parties specifically represent that they either have consulted to their
satisfaction with their attorneys, or have elected on their own accord not to
seek legal counsel, prior to executing this Agreement concerning the terms and
conditions of this Agreement.

u.

Interpretation.  Should any portion, word, clause, phrase, sentence or paragraph
of this Agreement be declared void or unenforceable, such portion shall be
considered independent and severable from the remainder, the validity of which
shall remain unaffected.  Whenever required by the context, as used in this
Agreement the singular number shall include the plural, and the masculine gender
shall include the feminine and neuter.

v.

Entire Agreement.  This Agreement constitutes the entire agreement between the
parties who have executed it and supersedes any and all other agreements,
understandings, negotiations, or discussions, either oral or in writing, express
or implied, between the parties to this Agreement.  The parties hereto
acknowledge that no representations, inducements, promises, agreements, or
warranties, oral or otherwise, have been made by them, or anyone acting on their
behalf, which are not embodied in this Agreement, that they have not executed
this Agreement in reliance on any such representations, inducements, promise,
agreement or warranty, and that no representation, inducement, promise,
agreement or warranty not contained in this Agreement, including, but not
limited to, any purported supplements, modifications, waivers or terminations of
this Agreement shall be valid or binding, unless executed in writing by all of
the parties to this Agreement.

w.

Governing Law.  This Agreement shall be enforced and governed under the laws of
the State of California without reference to its choice of law provisions.

x.

Knowing and Voluntary Agreement.  This Agreement in all respects has been
voluntarily and knowingly executed by the parties hereto.

y.

Counterparts.  This Agreement may be executed in counterparts, and when each
party has signed and delivered at least one such counterpart, each counterpart
shall be deemed an original, and, when taken together with other signed
counterparts, shall constitute one agreement, which shall be binding upon and
effective as to all parties.

z.

No Waiver.  Failure to insist on compliance of any term, covenant or condition
contained in this Agreement shall not be deemed a waiver of that term, covenant,
or condition, nor shall any waiver or relinquishment of any right or power
contained in this Agreement at any one time or more times be deemed a waiver or
relinquishment of any right or power at any other time or times.

aa.

Arbitration.  Any disputes concerning this Agreement or otherwise arising out of
this Agreement or Mr. Dreyer’s employment or termination that the parties are
unable to resolve among them shall be submitted to final and binding arbitration
in Orange County, California at and under the rules of the Judicial Arbitration
and Mediation Service (“JAMS”); provided that nothing in this provision shall
prevent the Company from seeking injunctive relief in any Court of competent
jurisdiction.

bb.

Section 409A.  The payments to Mr. Dreyer pursuant to this Agreement are
intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as
amended, to the maximum extent possible, under either the separation pay
exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term
deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for such
purposes, each installment paid to Mr. Dreyer under this Agreement shall be
considered a separate payment. In the event the terms of this Agreement would
subject Mr. Dreyer to taxes or penalties under Section 409A of the Code (“409A
Penalties”), the Company and

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Mr. Dreyer shall cooperate diligently to amend the terms of the Agreement to
avoid such 409A Penalties, to the extent possible; provided that in no event
shall the Company be responsible for any 409A Penalties that arise in connection
with any amounts payable under this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Separation Agreement and
General Release of All Claims on the date(s) set forth hereinafter.

 

Dated: January 13, 2016

By:

 

 

 

DAVID C. DREYER

 

 

 

 

BIOLASE, INC.

 

 

 

Dated: January 13, 2016

By:

 

 

 

Harold C. Flynn, Jr.

 

 

Chief Executive Officer

 

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