Exhibit
10.29


 


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 Michael C. Dugan M.D. (“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 Co-Laboratory Director 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


 


2

















 


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:


 


3

















 


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


 


4

















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.


 


6

















 


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.


 


7

















 


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.


 


[THE REMINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK]


 


9

















 


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/ Michael C. Dugan

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:
  

  	
  September 22,
  2003

  	
   

  
						






 


10

















 


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


 


11

















 


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


 


12

















 


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;


 


13

















 


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


 


14

















 


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:

  	
   

  	
   

  
						



 


15