Exhibit 10.3






EXHIBIT 10.3









July 26, 2010





Mr. David J. Daly

Clarient, Inc.

31 Columbia

Aliso Viejo, CA 92656




Dear Dave:



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
Chief Commercial Officer and will report directly to the Chief Executive Officer of the Company
(the “CEO”). This Letter Agreement amends, restates and supersedes in its entirety the employment
letter agreement, dated as of December 15, 2008, between Executive and the Company. The
obligations of Executive under that certain Agreement to Protect Business Interests dated
January 30, 2008 between Executive and the Company (the “January 2008 Agreement”) shall remain in
full force and effect.



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 $256,500 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 50% of base salary,
pro-rated for the number of months of services in any given year. 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
thereunder.




 


 









 











	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, paid on
a monthly basis. Without limiting the Company’s obligation pursuant to the preceding
sentence, in no event shall the monthly allowance be made later than December 31 of the
year following the year in which the expense was incurred. The allowance paid to
Executive in one year shall not affect the allowance paid to Executive in any
subsequent year and shall not be subject to liquidation in favor of any other benefit.






	 	(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-three (23) days of vacation per annum
which will accrue at the rate of 6.77 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, bonuses and vacation accruals (except for salary, bonuses and vacation
accruals for periods ending on the date of termination as provided in Section 8 below) 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 twelve (12) months of his base salary in effect at the time of the Severance Termination.



(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. To
the extent inconsistent with any Equity Agreement, this Section 6(b) shall constitute an amendment
to such Equity Agreement and, except as expressly provided herein, all terms and conditions of such
Equity Agreement shall remain in full force and effect.


 


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(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
twelve 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.



(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 compliance with the terms of the January 2008
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 twelve (12)-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.



(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 Chief Commercial Officer of the
Company, or (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; 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.


 


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(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.



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.




 


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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) payable no later than
March 15th of the year following that in which such termination occurs. “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) 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.



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.


 


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(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.



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.


 


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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.

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




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



	 	 	 
	/S/ David J. Daly
 

David J. Daly

	 	 







 


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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.


 


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(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.


 


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(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.


 


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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:________________






 


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