Exhibit
10.31


 


EMPLOYMENT AGREEMENT


 


This EMPLOYMENT
AGREEMENT (the “Agreement”) is entered into as of September 11, 2003
by and between Specialty Laboratories, Inc., a California corporation (the
“Company”), and Robert M. Harman (“Executive”), and is effective upon execution
by the Executive and approval by the Compensation Committee of the Company’s
Board of Directors (the “Compensation Committee”).


 


1.                                       Duties
and Responsibilities.


 


A.                                   Executive
shall serve as the Company’s Vice-President and Chief Information Officer or
such other title or position as may be designated from time to time by the
Board of Directors.


 


B.                                     Executive
agrees to devote his/her full time and attention to the Company, to use his/her
best efforts to advance the business and welfare of the Company, to render
his/her services under this Agreement fully, faithfully, diligently,
competently and to the best of his/her ability, and not to engage in any other
employment activities to the extent such other employment interferes with the
Company’s business or the performance of the Executive’s duties hereunder.


 


C.                                     Executive
shall be based at the Company’s office located in Santa Monica, California
(which the Company may move to Valencia, California), but Executive may be
required to travel to other geographic locations in connection with the
performance of his/her Executive duties.


 


2.                                       Period
of Employment.


 


Executive’s
employment with the Company shall be governed by the provisions of this
Agreement for the period commencing September 11, 2003 and continuing until
this Agreement terminates pursuant to written notification by either the
Company or Executive, which notification may occur at any time for any reason
or no reason.  The period during which
the Executive provides services to the Company pursuant to this Agreement shall
be referenced in this Agreement as the “Employment Period.”


 


3.                                       Cash
Compensation.


 


A.                                   Executive’s
base salary shall be payable in accordance with the Company’s standard payroll
schedule (“Base Salary”).  Executive’s
compensation shall be subject to periodic review by the Company, and may be
increased or decreased in the Company’s discretion with approval of the
Compensation Committee.


 


B.                                     For
each fiscal year during the Employment Period, Executive shall be eligible for an
incentive bonus in the Company’s sole discretion (“Incentive Bonus”).  For each full fiscal year of employment
during the Employment Period, Executive shall be eligible for an Incentive
Bonus, targeted at thirty percent (30%) of his/her annual base salary.  The Incentive Bonus amount will be based on
a number of factors, including but not limited to:  (1) the


 

















 


financial
performance of the Company as determined and measured by the Company’s Board of
Directors, and (2) Executive’s achievement of management targets and goals as
set by the Company.  The Incentive Bonus
amount is intended to reward contribution to the Company’s performance over an
entire fiscal year, and to encourage continuing contribution, and consequently
will be paid only if Executive is employed and in good standing at the time of
bonus payments, which generally occurs within ninety (90) days after the close
of the Company’s fiscal year. 
Determination of the amount of Incentive Bonus, or whether any Incentive
Bonus shall be paid, will be made in the Company’s sole discretion.


 


C.                                     The
Company shall deduct and withhold from the compensation payable to Executive
hereunder, including the Incentive Bonus (if any), any and all applicable
Federal, state and local income and employment withholding taxes and any other
amounts required or authorized by Executive to be deducted or withheld by the
Company under applicable statutes, regulations, ordinances or orders governing
or requiring the withholding or deduction of amounts otherwise payable as compensation
or wages to employees.


 


4.                                       Equity
Participation. 


 


Pursuant to the
Company’s 2000 Stock Incentive Plan, Executive may have previously been granted
a specific number of options to purchase shares of the Company’s common stock
(the “Options”), with certain vesting schedules and exercise prices, and except
as specifically detailed herein, such grants remain in effect and are not
affected by this Agreement.


 


5.                                       Expense
Reimbursement.


 


In addition to the
compensation specified in Section 3, Executive shall be entitled, in accordance
with the Company’s reimbursement policies in effect from time to time, to
receive reimbursement from the Company for reasonable business expenses
incurred by Executive in the performance of his/her duties hereunder, provided
Executive furnishes the Company with vouchers, receipts and other details of
such expenses in the form required by the Company sufficient to substantiate a
deduction for such business expenses under all applicable rules and regulations
of Federal and state taxing authorities.


 


6.                                       Fringe
Benefits.


 


A.                                   Executive
shall, throughout the Employment Period (after any applicable waiting period
for new employees as specified in Company policies), be eligible to participate
in all group term life insurance plans, group health plans, accidental death
and dismemberment plans and short-term disability programs and other Executive
perquisites which are made available to the Company’s Executives and for which
Executive qualifies.  The Company’s
Employee Handbook, copies of which Executive acknowledges were provided to
Executive by Company, set forth further information concerning these benefits.


 


B.                                     Executive
shall earn vacation time during the Employment Period at the rate of three (3)
weeks per year. Vacation shall accrue and be taken pursuant to the Company’s
vacation benefit policy set forth in the Company’s Employee/Team Member
Handbook, up to a maximum accrual of 160 hours, or four (4) weeks, of unused
vacation time.  Once this maximum


 


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accrual
is reached, the accrual will stop until Executive reduces the vacation balance
by taking vacation time.


 


7.                                       Severance
Pay for Exercise of the At-Will Clause.


 


A.                                   Notwithstanding
any of the provisions of this Agreement, Executive’s employment with the
Company is “at will”, which means that it is not for a specific term and may be
terminated by either the Company or Executive at any time, for any reason or no
reason, without advance notice. 
Similarly the Company may change the terms and conditions of Executive’s
employment at any time, for any reason, without advance notice.


 


B.                                     Should
the Company terminate Executive’s employment for Cause (as defined in Section 9
below), or should Executive voluntarily resign (other than a resignation for
Good Reason (as defined in Section 8 below)), the Company shall have no
obligation to Executive under this Agreement other than for accrued but unpaid
salary and vacation time as of the date of termination.


 


C.                                     If
the Company terminates Executive’s employment other than for Cause, or if
Executive resigns for Good Reason, the Company shall pay to Executive (in
either a lump sum or on a bi-weekly basis, at the sole discretion of the
Company) severance pay in the amount equivalent to nine (9) months of
Executive’s Base Salary immediately preceding such termination of Executive’s
employment, and Company shall also make a lump sum payment to Executive
of an amount equivalent to the payments necessary for continuation of Executive’s health benefits for nine
(9) months under COBRA (such payments
collectively “Severance Compensation”). 
Any election of coverage under COBRA will be at Executive’s sole
discretion and expense.  Executive must
comply with the terms and conditions of COBRA to establish and maintain
eligibility.  In the event the
provisions of this Section 7(C) are implemented, upon the payment of the
Severance Compensation and any accrued but unpaid salary and vacation
time as of the date of termination have been paid to Executive, the Company
shall have no further obligation to Executive under this Agreement.  The
Company shall not provide nor reimburse Executive for any supplemental
insurance products, including life insurance.


 


D.                                    The
Company shall deduct and withhold from the Severance Compensation any and all
applicable Federal, state and local income and employment withholding taxes and
any other amounts required or authorized by Executive to be deducted or
withheld by the Company under applicable statutes, regulations, ordinances or orders
governing or requiring the withholding or deduction of amounts otherwise
payable as compensation or wages to employees.


 


8.                                       Good
Reason.


 


For Purposes of this
Agreement, “Good Reason” shall mean any of the following events or occurrences,
provided that Executive first provides prompt written notice to Company of the
event or occurrence, and Company has not cured such event or occurrence within
fourteen (14) days of receipt of such notice:


 


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A.                                   A
material reduction or alteration in the duties, responsibilities, status,
reporting responsibilities, title, or offices that Executive had with the
Company immediately before the reduction;


 


B.                                     A
reduction by more than 10% of the annual Base Salary that Executive was
eligible to receive from the Company and its affiliates immediately before the
reduction, or any cumulative reductions totaling more than 10% of the annual
Base Salary of Executive as the effective date of this Agreement;


 


C.                                     A
Change in Control after which the Executive is not offered the same or
equivalent position at no less than ninety percent (90%) of Executive’s Base
Salary immediately preceding such Change of Control;


 


D.                                    The
failure of any successor to the Company by merger, consolidation or acquisition
of all or substantially all of the business or assets of the Company to assume
the Company’s obligations under this Agreement; or


 


E.                                      A
material breach by the Company of its obligations under this Agreement.


 


9.                                       Cause. 


 


For purposes of this Agreement,
“Cause” shall mean a reasonable belief by the Board of Directors (or any of the
Executive’s supervisors) that Executive has engaged in any one or more of the
following:  (i) financial dishonesty,
including, without limitation, misappropriation of a material or substantial
quantity of Company funds or property, or any attempt by Executive to secure
any personal profit related to the business or business opportunities of the
Company without the informed, written approval of the Company’s Board of Directors;
(ii) gross insubordination; (iii) gross negligence or reckless or willful
misconduct in the performance of Executive’s duties; (iv) misconduct which has
a materially adverse effect upon the Company’s business or reputation; (v) the
conviction of, or plea of nolo contendre to, any felony involving moral
turpitude or fraud; (vi) the material breach of any provision of this
Agreement; (vii) a material violation of Company policies including, without
limitation, the Company’s policies on equal employment opportunity and
prohibition of unlawful harassment; or (viii) the death or Disability of the
Executive (as defined below).


 


10.                                 Failure
to Render Service.


 


In the event Executive
fails for a period of 365 calendar days during any twelve-month period, as a
result of illness, incapacity, Disability (as defined below), injury, or by
reason of any statute law, ordinance, regulation, order, judgment or decree, to
render the services contemplated by this Agreement, Company, by written notice
to Executive, may, to the extent consistent with applicable law, suspend
payment of any salary or other benefits and/or terminate Executive’s employment
without those benefits provided herein. 
For purposes of this Agreement, “Disability” shall mean the absence of
the Executive from this duties with the Company on a full-time basis for 365
consecutive days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the


 


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Company or its insurers and acceptable to the Executive or his/her
legal representative (such agreement as to acceptability not to be unreasonably
withheld).


 


 


11.                                 Special
Change In Control Provisions.


 


A.                                   For
purposes of this Agreement, “Change In Control” shall mean any of the following
transactions or events effecting a change in ownership or control of the
Company:


 


(i)                                     a merger,
consolidation or reorganization approved by the Company’s stockholders, unless
securities representing more than fifty percent (50%) of the total combined
voting power of the voting securities of the successor company are immediately
thereafter beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Company’s
outstanding voting securities immediately prior to such transaction, or


 


(ii)                                  any
stockholder-approved transfer or any other disposition of all or substantially
all of the Company’s assets, or


 


(iii)                               the acquisition,
directly or indirectly, by any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Company), of beneficial ownership (within
the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities pursuant to a tender or exchange offer made directly to
the Company’s stockholders, or


 


(iv)                              a
change in the composition of the Board such that: (a) five (5) or more Board
members resign or are otherwise removed as Board members within any period of
six (6) consecutive months or less; or (b) five (5) or more Board members opt
not to stand for re-election to the Board within any period of six (6)
consecutive months or less; or (c) the authorized number of Board members is
increased or decreased by five (5) or more members within any period of six (6)
consecutive months or less; or (d) any combination of the foregoing Sections 11(A)(iv)(a-c)
occurs, such that five (5) or more Board member positions are affected by a
combination of resignations/removals, the option not to stand for re-election,
or the increase/decrease of the authorized number of Board members within any
period of six (6) consecutive months or less. 
As an example of the foregoing, and for illustrative purposes only, in
the event that two (2) Board members resign, one (1) Board member opts not to
stand for re-election, and the authorized number of Board members is increased
by two (2) positions, all of which occur within any period of six (6)
consecutive months or less, a Change of Control will be deemed to have
occurred.


 


B.                                     Change in
Control Acceleration. In the event of a of a Change in Control as
described in Section 11(A)(iv) herein, the Options, to the extent outstanding
at the time of such Change in Control, but not otherwise vested and exercisable
for all the shares of Common Stock subject to those Options will, immediately
and automatically as of the effective date of


 


5

















 


such
Change in Control, vest and become exercisable for all of the shares of Common
Stock at the time subject to the Options and may be exercised for any or all of
those shares as fully-vested shares of Common Stock.  In the event of a Change of Control other than that described in
Section 11(A)(iv) herein, the Options shall be governed by the terms of the
Company’s 2000 Stock Incentive Plan.


 


D.                                    Termination
or Resignation Following Change in Control.  Following a Change in Control, should
Executive’s employment with the Company or successor company terminate by
reason of (i) a resignation for Good Reason within twelve (12) months after a
Change in Control, or (ii) an involuntary termination of Executive’s employment
(other than a termination for Cause) within twelve (12) months after a Change
in Control (“Involuntary Termination”), Executive will become entitled to
receive the severance benefits set forth herein, provided and only if Executive executes and
delivers to the Company or successor company a general release (in form and
substance substantially similar to that in Exhibit A hereto or such other form
as mutually agreed to by Executive and Company or successor company).


 


12.                                 Additional
Restrictive Covenants.


 


A.                                   Executive
acknowledges and agrees that given the extent and nature of the confidential
and proprietary information he/she will obtain during the course of his/her
employment with the Company, it would be inevitable that such confidential
information would be disclosed or utilized by the Executive should he/she
obtain employment from, or otherwise become associated with, an entity or
person that is engaged in a business or enterprise that directly competes with
the Company.  Consequently, if in any
period during which the Executive is receiving payments from the Company as a
severance benefit,  including but not limited to severance pay
pursuant to Section 7, Executive shall, without prior written consent of the
Company’s Board of Directors, directly or indirectly own, manage, operate,
join, control or participate in the ownership, management, operation or control
of, or be employed by, render service to or be connected in any manner with,
any enterprise which is engaged in any business directly competitive with that
of the Company, then Company may, in its sole discretion, permanently and/or
temporarily cancel and/or suspend any remaining severance payments to
Executive.  Cancellation or suspension
of payments to Executive under this Section 12(A) shall not be deemed a breach
of this Agreement by Company.  The
provisions of this Section 12(A) shall not apply to any passive investment
representing an interest of less than two percent (2%) of an outstanding class
of publicly-traded securities of any company or other enterprise.


 


B.                                     During
the Employment Period, and for any additional period thereafter during
which the Executive is receiving payments from the Company as a severance
benefit, including
but not limited to severance pay pursuant to Section 7, Executive
shall not encourage or solicit any of the Company’s employees to leave
the Company’s employ for any reason or interfere in any other manner with
employment relationships at the time existing between the Company and its
employees.  In addition, Executive shall
not solicit, directly or indirectly, business from any client of the Company,
induce any of the Company’s clients to terminate their existing business
relationship with the Company or interfere in any other manner with any existing
business relationship between the Company and any client or other third party.


 


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C.                                     Executive
acknowledges that monetary damages may not be sufficient to compensate the
Company for any economic loss which may be incurred by reason of his/her breach
of the foregoing restrictive covenants. 
Accordingly, in the event of any such breach, the Company shall, in
addition to the termination of this Agreement and any remedies available to the
Company at law, be entitled to obtain equitable relief in the form of an
injunction precluding Executive from continuing such breach.


 


13.                                 Proprietary
Information.


 


As a condition of
Executive’s employment with the Company, Executive will execute (or has already
executed) the Company’s standard Confidential Information and Assignment of
Inventions Agreement.  Executive’s
obligations pursuant to the Confidential Information and Assignment of
Inventions Agreement will survive termination of Executive’s employment with
the Company.


 


14.                                 Successors
and Assigns.


 


This Agreement is
personal in its nature and the Executive shall not assign or transfer his/her
rights under this Agreement.  The
provisions of this Agreement shall inure to the benefit of, and be binding on
each successor of the Company whether by merger, consolidation, transfer of all
or substantially all assets (whether or not such transaction qualifies as a
Change in Control) or otherwise and the heirs and legal representatives of
Executive.


 


15.                                 Notices.


 


Any notices, demands or
other communications required or desired to be given by any party shall be in
writing and shall be validly given to another party if served either personally
or if deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested.  If
such notice, demand or other communication shall be served personally, service
shall be conclusively deemed made at the time of such personal service.  If such notice, demand or other
communication is given by mail, such notice shall be conclusively deemed given
forty-eight (48) hours after the deposit thereof in the United States mail
addressed to the party to whom such notice, demand or other communication is to
be given as hereinafter set forth:


 


	
  To the Company:

  
	
   

  	
   

  
	
   

  	
  Human Resources Department

  
	
   

  	
  Specialty Laboratories, Inc.

  
	
   

  	
  2211 Michigan Avenue

  
	
   

  	
  Santa Monica, California 90404

  



 


To Executive at the
current address as noted in personnel file at Company.


 


Any
party may change its address for the purpose of receiving notices, demands and
other communications by providing written notice to the other party in the
manner described in this Section.


 


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16.                                 Governing
Documents.


 


This Agreement
along with the documents expressly referenced in this Agreement constitute the
entire agreement and understanding of the Company and Executive with respect to
the terms and conditions of Executive’s employment with the Company and the
payment of severance benefits and supersedes all prior and contemporaneous
written or verbal agreements and understandings between Executive and the
Company relating to such subject matter. 
This Agreement may only be amended by written instrument signed by
Executive and an authorized officer of the Company.  Any and all prior agreements, understandings or representations
relating to the Executive’s employment with the Company are terminated and
cancelled in their entirety and are of no further force or effect.


 


17.                                 Governing
Law.


 


The provisions of
this Agreement will be construed and interpreted under the laws of the State of
California. If any provision of this Agreement as applied to any party or to
any circumstance should be adjudged by a court of competent jurisdiction to be
void or unenforceable for any reason, the invalidity of that provision shall in
no way affect (to the maximum extent permissible by law) the application of
such provision under circumstances different from those adjudicated by the
court, the application of any other provision of this Agreement, or the
enforceability or invalidity of this Agreement as a whole.  Should any provision of this Agreement
become or be deemed invalid, illegal or unenforceable in any jurisdiction by
reason of the scope, extent or duration of its coverage, then such provision
shall be deemed amended to the extent necessary to conform to applicable law so
as to be valid and enforceable or, if such provision cannot be so amended
without materially altering the intention of the parties, then such provision
will be stricken and the remainder of this Agreement shall continue in full
force and effect.


 


18.                                 Remedies.


 


All rights and remedies
provided pursuant to this Agreement or by law shall be cumulative, and no such
right or remedy shall be exclusive of any other.  A party may pursue any one or more rights or remedies hereunder
or may seek damages or specific performance in the event of another party’s
breach hereunder or may pursue any other remedy by law or equity, whether or
not stated in this Agreement.


 


19.                                 Arbitration.


 


A.                                   Except
as provided for in Section 12(C), and to the fullest extent allowed by law, any
controversy or claim arising out of or relating to Executive’s employment with
the Company or anything set forth herein, shall be settled by final and binding
arbitration, conducted in Los Angeles County, by an arbitrator selected in
accordance with the procedure set forth below. 
Possible disputes covered by the foregoing, include (without limitation)
claims pursuant to Title VII of the Civil Rights Act, the California Fair
Employment and Housing Act and comparable statutes in other states if
applicable, the Americans with Disabilities Act,  the Age Discrimination in Employment Act, and any other statutes
relating to an employee’s relationship with his/her employer. The Executive and
the Company shall initially confer and attempt to


 


8

















 


reach
agreement on the individual to be appointed as the arbitrator.  If no agreement is reached, the Executive
and the Company shall request from the Judicial Arbitration and Mediation
Services (“JAMS”) a list of five (5) retired judges affiliated with JAMS. The
Executive and the Company shall each alternately strike names from such list
until only one (1) name remains, and such person shall thereby be selected as
the arbitrator.  Except as otherwise
provided for herein, such arbitration shall be conducted in conformity with the
procedures specified in the California Arbitration Act (Cal. C.C.P. §§ 1280 et
seq.).  The arbitrator shall
allow the discovery authorized by California Code of Civil Procedure section
1283.05 or any other discovery required by law in arbitration proceedings.  To the extent that anything in this
Agreement conflicts with the arbitration procedures required by applicable law,
the arbitration procedures required by applicable law shall govern.  The arbitrator shall issue a written award
that sets forth the essential findings and conclusions on which the award is
based.  The arbitrator shall have the
authority to award any relief authorized by law in connection with the asserted
claims or disputes.  The arbitrator’s
award shall be subject to correction, confirmation or vacation, as provided by
any applicable law setting forth the standard of judicial review of arbitration
awards.


 


B.                                     The
Company shall bear the entire cost of (i) the arbitrator’s fee, (ii) any other
type of expense or cost that the Executive would not be required to bear if the
Executive were free to bring the dispute or claim in court and (iii) any other
expense or cost that is unique to arbitration. 
The parties intend that this section describing arbitration
shall be valid, binding, enforceable and irrevocable and shall survive the
termination of this Agreement.  Any
final decision of the arbitrator so chosen may be enforced by a court of
competent jurisdiction.  The Executive
acknowledges and agrees that he/she is waiving his/her right to a jury trial
and agrees that the decision of the arbitrator shall be final and binding.  Each party shall pay its own costs and
attorneys’ fees, if any.  However, if
any party prevails on a statutory claim which affords the prevailing party
attorneys’ fees and costs, the Arbitrator may award reasonable fees and costs
to the prevailing party.  Any dispute as
to the reasonableness of any fee or cost shall be resolved by the Arbitrator.


 


 


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20.                                 No
Waiver.


 


The waiver by
either party of a breach of any provision of this Agreement shall not operate
as or be construed as a waiver of any later breach of that provision.


 


21.                                 Counterparts.


 


This Agreement may
be executed in more than one counterpart, each of which shall be deemed an
original, but all of which together shall constitute but one and the same
instrument.


 


	
   

  	
  SPECIALTY LABORATORIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Douglas S.
  Harrington

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Douglas S.
  Harrington, M.D.

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  September 12,
  2003

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert M. Harman

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  September 17,
  2003

  
				



 


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Exhibit A


Form of General Release


 


GENERAL
RELEASE OF ALL CLAIMS


 


This General Release of All Claims (“Agreement”) is
voluntarily entered into by «NAME» (“Executive”) and Specialty Laboratories,
Inc. (“Specialty” or “Company”)
to settle fully and finally all obligations and/or differences between them,
disputed and/or undisputed, arising out of, relating to or resulting from
Executive’s employment with Specialty
and separation from employment. 
Executive and Specialty
agree:


 


 


1.                                                                                       Executive’s employment with Specialty will terminate/terminated
effective «TERMDATE».  On that date
Executive’s employment with Specialty
will/did automatically and immediately cease for all purposes except as provided
below.  Also on that date, the Company
will/did provide the Executive with a final paycheck which will include payment
for hours worked up through and including «TERMDATE», plus all earned and
untaken vacation.


 


2.                                                                                       As full and final settlement of all claims,
demands, damages, liabilities and/or causes of action of any kind whatsoever,
known or unknown (“Claims”) that Executive has or may have against Specialty, its officers, directors,
shareholders, owners, parent companies, subsidiaries, affiliates, predecessors,
successors, assigns, agents, employees and representatives (“Specialty, et al”), and in reliance upon
Executive’s termination of employment, release, covenants and promises
contained herein, Specialty
agrees to provide Executive with the severance benefits provided for and
described in the Employment Agreement between Specialty and Executive
dated September 11, 2003.


 


3.                                                                                       In consideration of the above, Executive and Specialty waive, release and forever
discharge each other, et al, from all Claims that Executive or Specialty has or may have against each
other, et al, arising out of, relating to, or resulting from any events
occurring before the execution of this Agreement, including but not limited to
any Claims arising out of, relating to or resulting from Executive’s employment
with Specialty, the cessation of
that employment, any Claims for violation of Specialty’s
policies or procedures, wrongful termination, breach of contract, breach of the
covenant of good faith and fair dealing, violation of public policy, negligent
and/or intentional infliction of emotional distress and/or stress, negligence,
injury to the psyche and/or internal organs, negligent and/or intentional
misrepresentation, fraud and/or deceit, defamation and/or invasion of privacy,
any claims for physical, mental and/or psychological injuries, attorneys’ fees,
costs, any Claims under the California Labor Code, the California Workers’
Compensation Act, the California Fair Employment and Housing Act, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights
Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, the
California Family Rights Act, the Consolidated Omnibus Budget Reconciliation
Act of 1985 and/or the Employee Retirement Income Security Act of 1974 and/or
any Claims under any other federal, state of local law, constitution,
regulation or ordinance.  Executive and Specialty further agree


 


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not to bring, continue or
maintain any legal proceedings of any nature whatsoever against each other, et
al, before any court, administrative agency, arbitrator or any other tribunal
or forum by reason of any such Claims. 
Specifically included in this release are all Claims of age
discrimination, whether under the Federal Age Discrimination in Employment Act
of 1967, 29 U.S.C. Section 621 et seq., the California Fair Employment and
Housing Act, California Government Code Section 12941 et seq. or any other law.


 


4.                                                                                       This Agreement is intended to be effective as
a bar to all Claims as stated in paragraph 3. 
Accordingly, Executive and Specialty
hereby expressly waive all rights and benefits conferred by Section 1542 of the
California Civil Code, which states:


 


“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.”


 


Executive and Specialty acknowledge that they may hereafter discover
Claims or facts in addition to or different from those which they now know or
believe to exist with respect to the subject matter of this Agreement and
which, if known or suspected this Agreement, may have materially affected this
settlement.  Nevertheless, Executive and
Specialty hereby waive any right,
claim or cause of action that might arise as a result of such different or
additional claims or facts.  Executive
and Specialty acknowledge that
they understand the significance and consequence of such release and such
specific waiver of Section 1542.


 


5.                                                                                       Executive acknowledges and agrees he/she has
signed, or concurrent with this Agreement is signing, the “Agreement with
Respect to Confidential Information, Inventions and Works of Authorship”
(“Confidentiality Agreement”), which is fully incorporated herein by this
reference.  Executive warrants and
represents he/she has not breached any of his obligations under the
Confidentiality Agreement and agrees to abide by all promises, terms,
obligations and covenants agreed to, made and/or assumed by Executive under the
Confidentiality Agreement.


 


6.                                                                                       Executive acknowledges and agrees he/she will
make only truthful remarks and statements about and will not disparage Specialty and/or Specialty’s business operations, products,
services, practices, procedures, policies, officers, directors, shareholders,
agents, employee and representatives. 
The Company acknowledges and agrees that no member of Company senior
management will make disparaging or untrue remarks about Executive.


 


7.                                                                                       Executive agrees that upon termination of
employment with the Company, Executive will promptly transfer to the Company,
all drawings, manuals, guides, records, notebooks, papers, writings, computer
software or programs in any form and other documents and materials, including
all copies thereof, which are in Executive’s possession or under Executive’s
control, whether or not such items were prepared by


 


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Executive, which would not
be in the possession of the Executive except for the employment of the
Executive by the Company.


 


8.                                                                                       Executive agrees not to disclose this
Agreement or any of its terms to anyone except his attorney, or tax advisor, if
any.


 


9.                                                                                       Specialty expressly denies any violation of any of its
policies, procedures, state or federal laws or regulations.  Accordingly, while this Agreement resolves
all issues between Executive and Specialty
relating to any alleged violation of Specialty’s
policies or procedures or any state or federal law or regulation, this
Agreement does not constitute an adjudication or finding on the merits and it
is not, and shall not be construed as, an admission by Specialty of any violation of its
policies, procedures, state or federal laws or regulations.


 


10.                                                                                 The consideration described in paragraph 2
above constitutes the sole and exclusive consideration provided Executive under
this Agreement.  Executive acknowledges
and agrees he/she has received all wages, bonuses, commissions, compensation
remuneration, and all other moneys due him/her arising out of, relating to or
resulting from his employment with Specialty,
including but not limited to all moneys due him/her under any and all benefit
plans established and/or maintained by Specialty.


 


11.                                                                                 Executive and Specialty each represent and warrant they have not
transferred or assigned to any person or entity any rights or Claims released
herein.


 


12.                                                                                 This Agreement is binding upon and inures to
the benefits of Executive’s spouse, family, heirs, successors, assigns,
executors, administrators and personal representatives and is binding upon the
inures to the benefit of the successors and assigns of Specialty.


 


13.                                                                                 Except as explicitly provided herein, neither
party will be liable to the other party for any costs or attorneys’ fees,
including any provided by statutes.


 


14.                                                                                 Executive fully understands, acknowledges and
agrees among the various rights and Claims he/she is waiving, releasing and
forever discharging by the execution of this Agreement are all rights and
Claims arising under the Federal Age Discrimination in Employment Act of 1967,
29 U.S.C. Section 621, et. seq.  Executive
further understands, acknowledges and agrees that:


 


a.                                       In return for this Agreement, Executive will
receive compensation beyond that which Executive was already entitled to
receive before entering into this Agreement.


 


b.                                      Executive was given a copy of this Agreement
on                      ,
and informed that Executive has been given forty-five (45) days within which to
consider this Agreement;


 


c.                                       Executive has carefully read and fully
understands all of the provisions of this Agreement;


 


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d.                                      Executive is, by the execution of this
Agreement, waiving, releasing and forever discharging Specialty, et al, from all Claims that
he/she has or may have against Specialty,
et al, individually and/or collectively, including but not limited to all Claims
of age discrimination;


 


e.                                       Executive was previously advised, and is
hereby further advised, in writing to consult with an attorney before executing
this Agreement; and


 


f.                                         Executive was informed that Executive has a
period of seven (7) days following the execution of this Agreement by both
parties to revoke this Agreement by providing written notice of such revocation
to Specialty’s Human Resources
Department and was previously advised, and is hereby further advised, in
writing that this Agreement shall not become effective or enforceable until
this seven (7) day revocation period has expired without him/her having
exercised his right of revocation; and


 


15.                                                                                 This is the entire agreement between the
parties and supersedes all previous negotiations, agreements and
understandings, with the exception of the Confidentiality Agreement referenced
in Section 5 herein and the surviving provisions of the Employment
Agreement.  Any oral representations
regarding this Agreement shall have no force or effect.  No modifications of this Agreement can be
made except in writing signed by Executive and an authorized representative of Specialty.  If any action or other legal proceeding is brought by either
party for damages, specific performance or other injunctive relief by reason of
any asserted violation of this Agreement, the prevailing party shall be
entitled to recover its reasonable costs and attorney fees.


 


16.                                                                                 Executive acknowledges and agrees that he/she
has been advised this Agreement is a final and binding legal document, that
he/she has had reasonable and sufficient time and opportunity to consult with
an attorney of his own choosing before signing this Agreement and that in
signing this Agreement, he/she has acted voluntarily of his own free will and
has not relied upon any representation made by Specialty
or any of its agents, employees or representatives regarding this Agreement’s
subject matter or its effect.


 


17.                                                                                 Executive agrees to return all Company
property, including but not limited to all computer equipment, credit cards,
telephone equipment, and dictation equipment. 
Executive also agrees to provide a final reconciliation of all cash
advances, travel advances, along with incurred authorized expenses as substantiated
by appropriate receipts.  Executive agrees
that failure to return all Company property and/or provide proper documentation
to account for any outstanding travel or cash advances within seven (7) days of
Executive’s execution of this Agreement shall make this Agreement null and
void.


 


18.                                                                                 Executive agrees that he/she will make
himself available at mutually agreeable times as requested by Specialty to use his best efforts to
cooperate with Specialty in any
litigation or government investigations or proceedings now pending or which may
later


 


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arise in which Specialty requires or desires his
cooperation as a witness or otherwise.  Specialty will reimburse Executive for
reasonable travel and other out-of-pocket expenses incurred as a result of providing
such cooperation.  It is understood that
Executive’s availability will be for reasonable periods of time during normal
business and employment activities elsewhere and that his availability for
assistance in such litigation activities on behalf of Specialty will not unreasonably interfere
with his efforts to pursue such other business and employment activities.


 


19.                                                                                 Any dispute or controversy between Executive,
on the one hand, and Specialty, on
the other hand, in any way arising out of, related to, or connected with this
Agreement or the subject matter thereof, shall
be resolved through final and binding arbitration in Los Angeles, California,
pursuant to California Civil Procedure Code §§ 1282 – 1284.2.  In the event of such arbitration, unless otherwise
required by law, each party shall pay its own attorneys’ fees and costs and Specialty shall pay the arbitrator’s fees,
and any and all other administrative costs of the arbitration.  Notwithstanding any provision in this
Section 19, neither party shall be prohibited from seeking injunctive relief as
necessary to maintain the status quo pending an arbitration proceeding
regarding the breach or threatened breach of the Confidentiality Agreement or
any other confidentiality obligations owed to the other party.  The provisions of this Section 19 supercede
and replace in their entirety any prior arbitration agreement(s) that may exist
between Executive and Specialty.


 


20.                                                                                 If any provision of this Agreement or the
application thereof is held invalid the invalidity shall not affect other
provisions or applications of this Agreement which can be given effect without
the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable.


 


I HAVE COMPLETELY AND CAREFULLY READ THE
FOREGOING, INCLUDING THE WAIVER AND RELEASE OF CLAIMS SET FORTH IN PARAGRAPHS
2, 3, 4, 10, 13, AND 14 ABOVE AND FULLY UNDERSTAND AND VOLUNTARILY AGREE TO ITS
TERMS.


 


 


THIS AGREEMENT CONTAINS A WAIVER OF CLAIMS UNDER THE
AGE DISCRIMINATION IN EMPLOYMENT ACT. 
YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  «NAME»

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPECIALTY LABORATORIES,
  INC.

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  



 


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