Document:

Exhibit

EXHIBIT 10.7

TRANSITION AGREEMENT, PART-TIME EMPLOYMENT AGREEMENT, AND GENERAL RELEASE OF CLAIMS 

This TRANSITION AGREEMENT, PART-TIME EMPLOYMENT AGREEMENT, AND GENERAL RELEASE OF CLAIMS (the “Agreement”) is entered into as of December 1, 2019, by and between Accelerate Diagnostics, Inc. (the “Company”), and Lawrence Mehren (“Executive”). The Company and Executive are collectively referred to herein as the Parties.

A. Executive is employed by the Company pursuant to an Offer Letter dated June 26, 2012 (the “Offer Letter”) and a Confidentiality and Inventions Assignment Agreement dated June 26, 2012 (the “Existing Confidentiality Agreement”).

B. The Company and Executive have determined that it is in their mutual best interests for Executive to retire from his full-time position as President and Chief Executive Officer of the Company.

C. The Company and Executive have also determined that Executive’s skillset is uniquely valuable to the Company and that it is in their mutual best interests for Executive to continue to assist the Company in a part-time employment capacity as more fully described below.

D. The Company and Executive now desire to enter into this Agreement to describe Executive’s retirement and transition from the President and Chief Executive Officer role into a new part-time employment role and resolve all claims and issues arising from or related to Executive’s full-time employment with the Company.

NOW, THEREFORE, for and in consideration of the mutual agreements described and agreed to be performed, Executive and the Company agree as follows:

1. RETIREMENT. 

(a) Effective as of January 31, 2020 (the “Retirement Date”), and without any further action on Executive’s part, Executive retires from, and is further removed by the Company, as its President and Chief Executive Officer and from any and all other positions including directorships or offices that Executive holds with the Company, its affiliates, and any other entities including where Executive serves as a director, officer, trustee, partner, or member by virtue of his role as President and Chief Executive Officer of the Company.

(b) From the date of this Agreement through the Retirement Date, Executive’s employment will continue to be governed by his existing Offer Letter. For sake of clarity, this means, among other things, that, his employment remains at-will and that through the Retirement Date, Executive will continue to receive his annual base salary of $500,000 (less any base salary amounts waived under the Company’s 2019 Salary Waiver and Nonqualified Stock Option Grant Plan) and continue to participate in the Company’s standard benefit and vacation plans, as an active employee, as such plans may be amended, modified, or terminated by the Company from time to time.

(c) Provided that Executive signs and does not revoke this Agreement and otherwise complies with all of the terms and conditions of this Agreement, including the requirement that Executive signs and does not revoke the Supplemental Release described in Section 15 below, Executive will be entitled to receive a 2019 bonus in the amount Executive would have received had he continued as a full-time employee through the date such bonuses are paid to other executive officers of the Company. Any such bonus will be paid or awarded to Executive at the same time and in the same manner and form such bonuses are paid or awarded to other executive officers of the Company (e.g., if other executive officers receive their 2019 bonuses in the form of equity grants made under the 2012 Omnibus Equity Incentive Plan (the “2012 Plan”), Executive will also receive his 2019 bonus in the form of an equity grant under the 2012 Plan).

(d) Provided that Executive signs and does not revoke this Agreement and executes the New Confidentiality Agreement described in Section 6 below, the Company will pay Executive a single lump cash sum payment in an amount not to exceed $15,000, to reimburse Executive for the reasonable legal fees incurred by him in connection with the negotiation of this Agreement and the attached Exhibits.

2. PART-TIME EMPLOYMENT. Provided that Executive signs and does not revoke this Agreement and otherwise complies with all of the terms and conditions of this Agreement, including the requirement that Executive 

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signs and does not revoke the Supplemental Release described in Section 15 below, then beginning February 1, 2020 (“Part-Time Start Date”), Executive will transition to a part-time employment role with the Company, reporting to the Company’s Head of Research & Development. For the avoidance of doubt, there shall be no break in service between the Retirement Date and the Part-Time Start Date.

(a) Effective on the Part-Time Start Date, the provisions of this Section 2 will supersede and replace the Offer Letter and any prior understandings, whether oral or written, with respect to Executive’s employment relationship with the Company.

(b) Unless terminated by: (1) mutual written agreement of the Parties (in a writing signed by Executive and an authorized Company officer) or (2) Executive’s death, Executive will serve as a part-time employee beginning on the Part-Time Start Date and ending on the second anniversary of the Retirement Date (the “Part-Time Period”). If Executive’s part-time employment and the Part-Time Period is terminated due to one of the reasons provided in (1) or (2) above, Executive will be entitled to receive his earned but unpaid Part-Time Salary (as defined below) through the date of termination and any accrued but unpaid reasonable business expenses through the date of termination, with such amount paid in a single lump sum within 10 days of the termination date (the “Accrued Obligations”). The Part-Time Period may be renewed or extended by mutual agreement of the Parties, but unless such a renewal or extension is agreed upon in writing, the Company shall have no obligation to employ Executive after the second anniversary of the Retirement Date.

(c) During the Part-Time Period, Executive shall work for the Company a minimum of 25 hours per week, with the majority of such time spent working from Executive’s home office, provided that Executive agrees to attend in-person meetings and other functions as reasonably requested by the Company. Executive’s duties during the Part-Time Period will consist of advising, consulting, and counseling his successor and the Head of Research & Development, or their respective delegates, in connection with the following matters: (1) investor relations activities, including investor presentations; (2) communications with analysts; (3) quarterly and other financial reporting matters; (4) corporate culture and people management; (5) the development of Pheno 2 including design and marketing specifications, engineering prototyping, and bringing Pheno 2 to market; and (6) such other projects and services as may be mutually agreed to by the Parties from time to time. Executive shall perform the services in good faith and to the best of his ability but is not obligated to track or report his hours to the Company.

(d) During the Part-Time Period, the Company will pay Executive an annual base salary (“Part-Time Salary”) of $250,000.

(e) Except as set forth in Section 1(c), above, and unless otherwise determined by the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”): (1) Executive will not be entitled to any cash bonuses from the Company during the Part-Time Period; and (2) Executive will not be eligible to receive future grants of stock options, performance shares, or other awards under the 2012 Plan.

(f) Executive and the Company previously entered into the Stock Option Agreements identified on Exhibit A (the “Option Agreements”). Consistent with such Option Agreements, each option shall remain outstanding and continue to vest during the Part-Time Period. In all other respects each option shall remain subject to the terms and conditions of the applicable Option Agreement, provided, that, by signing this Agreement, Executive agrees that any shares subject to any Option Agreement that are unvested as of the Retirement Date (the Unvested Shares) may be subject to forfeiture, recoupment, or clawback if Executive violates the non-competition, non-solicitation, confidentiality, invention assignment, or other material covenants set forth the New Confidentiality Agreement described in Section 6 below as reasonably determined by the Compensation Committee in its sole discretion. In the case of such an event, the Company may seek such forfeiture, recoupment, or clawback of the Unvested Shares in any manner it deems appropriate and permitted by applicable law including, without limitation, cancelling all or a portion of any option award (vested or unvested), requiring the return of shares of stock acquired upon exercise, and/or requiring the reimbursement of any net proceeds or amounts previously received from the sale of any Unvested Shares.

(g) During the Part-Time Period, Executive will be eligible to participate in the Company’s standard company benefit and vacation plans, as such plans may be amended, modified, or terminated by the Company, in its sole discretion, from time to time, with or without notice. Executive’s participation in such plans will be subject to the terms and conditions set forth in the applicable benefit plan and vacation plan documents. Upon Executive’s termination of part-time employment, or at the expiration of the Part-Time Period, Executive and his eligible dependents will be eligible to elect and purchase, at his cost, group medical coverage through COBRA or within the Company’s then existing group health plan. The Company will ensure its then-existing carrier will make available to Executive and his eligible 

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dependents all plan options and benefit coverage under the Company’s group medical plan that are available to other Company executives until the earlier of (1) the date on which Executive is eligible to receive group medical benefits from another employer; or (2) the date on which Executive is eligible to receive medical benefits under Medicare. Any post-employment health insurance coverage provided pursuant to this Section will be subject to Executive’s timely payment of premiums and the terms and conditions set forth in the then existing group health plan.

(h) During the Part-Time Period, Executive will be provided with a laptop computer and IT support services as reasonably requested by Executive from time to time. In addition, Executive will be reimbursed for the reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties as long as Executive submits his expenses promptly, with appropriate documentation, in compliance with the Company’s expense reimbursement policies. Executive will seek pre-approval from the Company for any expenses exceeding $500 or requiring out-of-town travel. On or before the Retirement Date, Executive agrees to return any Company credit or charge cards in his possession back to the Company.

(i) Following the termination of Executive’s employment for any reason, Executive agrees to cooperate fully with the Company and with the Company’s counsel in connection with any present and future actual or threatened litigation, administrative or regulatory proceeding or inquiry, or other investigation involving the Company or any affiliate that relates to events, occurrences, or conduct occurring, or claimed to have occurred, during Executive’s employment. Executive is hereby instructed to tell the truth in any litigation, administrative or regulatory proceeding or inquiry, or other investigation involving the Company and nothing herein shall be deemed or construed to suggest otherwise. If Executive’s cooperation is required pursuant to this section, the Company will: (1) reimburse Executive for reasonable out-of-pocket expenses, excluding legal fees; and (2) pay Executive an hourly compensation at a rate equivalent to his hourly Part-Time Salary at the time of his termination of employment.

3. EXECUTIVE’S GENERAL WAIVER AND RELEASE.

(a) Except as set forth in Section 3(b), which identifies claims expressly excluded from this Agreement, Executive, on Executive’s own behalf and on behalf of his spouse, heirs, agents, legal representatives, and assigns, hereby releases, waives, and forever discharges the Company, its affiliated companies, and their respective officers, directors, agents, members, partners, trustees, insureds, employees, contractors, successors, and assigns (the “Released Parties”) from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities, and obligations of every kind and nature, in law, equity or otherwise, known and unknown, suspected and unsuspected, whether disclosed or undisclosed. This full release and waiver include, but is not limited to, claims arising from or relating to Executive’s employment with the Company, his services as a member of its Board of Directors, and all positions and roles he has or has had as a director, officer, employee, trustee, member, partner, shareholder, or agent of any affiliated entities, and the termination of his employment and all such positions and roles. This full release and waiver includes, but is not limited to, claims of wrongful discharge, breach of contract, promissory estoppel, restitution, misrepresentation, emotional distress, defamation, invasion of privacy, fraud, breach of the covenant of good faith and fair dealing, discrimination, retaliation, and harassment; claims based on sex, age, race, national origin, religion, veteran status, disability or any other basis or protected class, and any and all claims brought under applicable statutes, as amended, such as: Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act, Older Workers’ Benefits Protection Act, Americans with Disabilities Act, Employee Retirement Income Security Act, Consolidated Omnibus Budget Reform Act, Uniformed Services Employment and Reemployment Rights Act, Fair Credit Reporting Act, False Claims Act, Family Medical Leave Act, Fair Labor Standards Act, Rehabilitation Act, Equal Pay Act, Arizona Civil Rights Act, Arizona Employment Protection Act, the anti-retaliation provisions of the Arizona Workers Compensation law, and Arizona state wage payment laws including the Arizona Wage Act; and claims arising from any applicable local, state, or federal law, and wage or benefit claims, including without limitation claims for salary, bonuses, commissions, equity awards in any affiliated or related companies (including stock grants, stock options and restricted stock units), vesting acceleration, vacation pay, fringe benefits, severance pay or any other form of compensation.

(b) The only claims that Executive is not waiving and releasing under this Agreement are claims he may have for: (1) unemployment claims and workers’ compensation claims for accidents or injuries at work; (2) any benefits entitlements that are either payable pursuant to this Agreement, or are vested and unpaid as of the Retirement Date pursuant to the terms of a Company sponsored benefit plan; (3) indemnification by the Company under applicable law as a former officer and director and Executive’s rights under insurance policies including Directors and Officers insurance coverage; (4) violation of any federal, state, or local statutory or public policy right or entitlement that, by applicable law, is not waivable; (5) Executive’s rights expressly set forth in this Agreement; (6) any rights or claims that may arise after the execution date of this Agreement; and (7) any rights to receive an award for information or cooperation provided 

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to the Securities and Exchange Commission pursuant to SEC Rule 21-F. Nothing in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission (“EEOC”), the Occupational Safety and Health Administration (“OSHA”), or any other applicable federal, state, or local governmental agency or commission (“Government Agencies”). Executive acknowledges that this Agreement and the Supplemental Release described in Section 15, below, do not limit Executive’s ability to communicate with Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency nor will they preclude Executive from giving truthful testimony in response to a lawful subpoena or preclude any conduct protected under any local, state or federal law, including those providing “whistleblower” protection to Executive or the right to engage in concerted activities. Notwithstanding the foregoing, Executive acknowledges and agrees that, in light of the consideration he is receiving under this Agreement, he is waiving any monetary or personal relief that may be available to him with respect to any charge, cause of action, or complaint filed by any person, including Executive, or entity with any Government Agency.

(c) Executive represents and warrants that he has not filed any complaints, charges, claims, grievances, or lawsuits against the Released Parties with any local, state or federal agency or court, or with any other forum. Executive further represents and warrants that he has not assigned or transferred any claims he may have or had against the Released Parties or any of his rights or obligations under this Agreement.

(d) Executive acknowledges that this Agreement is intended to include, and does include in its effect, without limitation, all claims which Executive does not know or suspect to exist in his favor against the Released Parties as of the execution date of this Agreement, and that this Agreement extinguishes all such claims, unless excluded under Section 3(b).

(e) Executive understands and agrees that the Company has no obligation to provide him with the amounts described in Section 1(c) and 1(d) or to offer him the part-time employment described in Section 2 unless he executes and does not revoke this Agreement and the Supplemental Release. Executive also understands that he has received or will receive, regardless of the execution of this Agreement, any benefit entitlements that are vested and unpaid as of the Retirement Date and all wages owed to him through the Retirement Date, together with any accrued but unpaid vacation pay earned through the Retirement Date, less applicable withholdings and deductions.

4. EXECUTIVE’S ADEA WAIVER. Executive is advised to consult with an attorney of his choice prior to executing this Agreement. By signing below, Executive expressly acknowledges and agrees that by entering into this Agreement, Executive is waiving any and all rights or claims that Executive may have arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), which have arisen on or before the date he executes this Agreement. Executive further acknowledges and certifies the following:

(a) Executive has read and understands all of the terms of this Agreement and is not relying on any representations or statements, written or oral, not set forth in this Agreement.

(b) The consideration provided for in Sections 1(c) and 1(d) and the offer of part-time employment described in Section 2 is in addition to anything of value to which he is or may have been entitled.

(c) Executive understands that the release in this Agreement does not apply to any rights or claims that may arise after the execution date of this Agreement.

(d) Executive has been provided a period of 21 calendar days from receipt of this Agreement within which to decide whether he will execute this Agreement. Executive may sign this Agreement any time within this time period. If Executive signs before the 21-day period expires, Executive does so to expedite the Agreement and waives the remaining days to consider the Agreement.

(e) Executive is signing this Agreement knowingly and voluntarily.

(f) Executive has the right to revoke this Agreement within 7 calendar days after signing it, by providing written notice of revocation via email or certified mail to the General Counsel of the Company. Executive’s written notice of revocation must be received via email or postmarked on or before the end of the 7th calendar day after he has timely signed this Agreement. This deadline will be extended to the next business day should it fall on a Sunday or holiday recognized by the U.S. Postal Service.

(g) Executive agrees that this Agreement is not effective and no amounts will be paid or owed pursuant to 

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Section 1(c) or 1(d) and that that the Company will not be obligated to offer him the part-time employment described in Section 2 until all of the following have occurred: (1) Executive signs this Agreement in the time period identified above and signs the Supplemental Release in the allotted time; (2) the 7-day revocation periods contained in this Section and in the Supplemental Release have passed; and (3) Executive has not revoked this Agreement or the Supplemental Release during the respective 7-day revocation periods (the “Effective Date(s)”). If Executive does not timely sign or revokes this Agreement or does not timely sign or revokes the Supplemental Release, then this Agreement shall be null and void and no payments shall be made or due pursuant to Section 1(c) or 1(d) and the Company will not offer Executive the part-time employment described in Section 2.

5. COMPANY’S GENERAL WAIVER AND RELEASE. The Company, its subsidiaries, and affiliated companies, and their respective successors and assigns hereby release, waive, and forever discharge Executive, his spouse, heirs, agents, legal representatives, and assigns (the “Executive Released Parties”) from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities, and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, whether disclosed or undisclosed arising from or relating to Executive’s employment with the Company, his service as a member of its Board of Directors, and all positions and roles he has or has had as a director, officer, employee, trustee, member, partner, shareholder, or agent of the Company. Notwithstanding the foregoing, the Company’s release in this Section shall not extend to and claims it may have for: (1) a breach of this Agreement or its Exhibits by Executive; (2) any rights it has with respect to unvested benefits under any Company-sponsored pension, retirement, or health and welfare plans; (3) Company’s rights expressly set forth in this Agreement or its Exhibits; (4) any of the Company’s rights or claims that may arise after the Retirement Date.

6. NEW RESTRICTIVE COVENANT AGREEMENT. In connection with the execution of this Agreement, Executive agrees to execute and deliver to the Company’s General Counsel, a new restrictive covenant agreement (“New Confidentiality Agreement”), in the form attached as Exhibit B. The New Confidentiality Agreement will replace the Existing Confidentiality Agreement in its entirety and apply to Executive for the duration of his employment and certain restrictive covenants in the New Confidentiality Agreement shall extend for a period of one (1) year after the Part-Time Period ends.

7. COMPANY PROPERTY. Unless required to do so at an earlier date by this Agreement, upon the Company’s request or Executive’s termination of employment or service for any reason, Executive shall promptly return to the Company all property of the Company, including but not limited to: originals and hard and electronic copies of records, documents, Confidential Information (as defined in the New Confidentiality Agreement), computer and office equipment, other equipment, plans, designs, electronic devices, keys, access cards, passwords, charge or credit cards, and other tangible and intangible items, in whatever form, in Executive’s possession or control. Executive understands that all electronic mail, equipment, and all computer hardware and software are property of the Company.

8. DISPUTE RESOLUTION. Executive and the Company agree to meet to informally in a good faith effort to resolve any issues arising under this Agreement. If the Parties are unable to resolve their differences, they agree to submit to binding arbitration in Tucson, Arizona, any and all such claims and disputes. The Parties agree that such disputes will be heard by a single arbitrator, applying Arizona and federal substantive law, as applicable, in accordance with the American Arbitration Association’s Employment Arbitration Rules. If necessary, an action may be brought in any court of competent jurisdiction solely to compel arbitration or enforce an arbitration award or for injunctive relief to enforce the Confidentiality Agreement and other restrictive covenants described in this Agreement. This agreement to arbitrate survives the termination of Executive’s service to the Company. Executive expressly agrees and understands that, by agreeing to arbitration to resolve all claims described herein, he, as well as the Company, are waiving the right to a jury or court trial for all such claims. Executive further understands that arbitration is a private, claim resolution process which uses a neutral third-party, instead of a judge or jury, to resolve all claims and typically has more limited discovery than in a case filed in court. Executive understands that he may refuse to sign this Agreement, but that if the Agreement is not signed, he will not be entitled to the compensation and benefits described in this Agreement. If Executive prevails in any action he brings to enforce his rights set forth in this Agreement, the Company will pay Executive for Executive’s reasonable attorneys’ fees and costs incurred in such action.
___________

Employee must initial above, indicating his agreement to submit all claims to arbitration.

9. ENTIRE AGREEMENT. This Agreement along with the Supplemental Release and the New Confidentiality Agreement and the other agreements described therein constitute the entire understanding and agreement between Executive and the Company in connection with the matters described, and replaces and cancels all previous agreements 

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and commitments, whether spoken or written, with respect to such matters.

10. MODIFICATION IN WRITING. No oral agreement, statement, promise, commitment or representation shall alter or terminate the provisions of this Agreement. This Agreement cannot be changed or modified except by written agreement signed by the Parties.

11. GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (a) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (b) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof. Each Party acknowledges that such Party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each party.

12. SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

13. WITHHOLDING. The amounts due, if any, pursuant to this Agreement shall be subject to reduction in order to comply with applicable federal, state and local tax withholding requirements and will be reflected on Executive’s Form W-2 for the year in which such amounts are paid. Executive hereby acknowledges that the Company, nor any of its directors, officers, agents, or employees have provided Executive with any tax-related advice with respect to the matters covered by this Agreement. Executive understands and acknowledges that he is solely responsible for obtaining his own tax advice with respect to the matters covered by this Agreement.

14. SECTION 409A COMPLIANCE. This Agreement shall comply with Section 409A of the Internal Revenue Code or an exception thereto and each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to Executive, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. Executive does not have any right to make any election regarding the time or form of any payment due under this Agreement. Notwithstanding anything in this Agreement to the contrary, if the Company concludes, that the any amounts due pursuant to this Agreement are subject to Section 409A of the Internal Revenue Code, then no such amounts will be paid prior to Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)) and if Executive is deemed to be a specified employee as defined in Treasury Regulation Section 1.409A-1(i)(1) on the date of his termination of employment, no payments that are subject to Section 409A shall begin until the first day of the seventh month following his “separation from service”.

15. SUPPLEMENTAL RELEASE. In exchange for the Company’s agreement to provide the payments under Section 1(c) of this Agreement, and to continue Executive’s employment as a part-time employee pursuant to Section 2 of this Agreement, Executive shall sign, deliver to the General Counsel, and not revoke, the Supplemental Release of All Claims (“Supplemental Release”) in a form substantially similar to the attached Exhibit C. To be effective the Supplemental Release must be signed by Executive within 21 calendar days after the Retirement Date but not before the day after the Retirement Date.

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IN WITNESS WHEREOF, the Parties have hereby approved and executed this Agreement as of the date identified below by Executive:

	
		
	EXECUTIVE 

	 

	Signature:
	/s/ Lawrence Mehren 

	Printed Name:
	Lawrence Mehren

	Date:
	12/1/2019

	
		
	ACCELERATE DIAGNOSTICS, INC. 

	 

	Signature:
	/s/ John Patience 

	Printed Name:
	John Patience

	Title: 
	Chairman of the Board

	Date:
	12/1/2019

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EXHIBIT A 

LIST OF OUTSTANDING EQUITY AWARDS 

		
	•
	Stock Option Agreement dated April 20, 2012 by and between Lawrence Mehren and the Company (2,200,000 shares).

		
	•
	Stock Option Agreement dated February 26, 2014 by and between Lawrence Mehren and the Company (52,132 shares).

		
	•
	Stock Option Agreement dated March 18, 2016 by and between Lawrence Mehren and the Company (60,000 shares).

		
	•
	Stock Option Agreement dated March 18, 2016 by and between Lawrence Mehren and the Company (10,408 shares).

		
	•
	Stock Option Agreement dated March 7, 2018 by and between Lawrence Mehren and the Company (25,099 shares).

		
	•
	Stock Option Agreement dated January 1, 2019 by and between Lawrence Mehren and the Company (37,736 shares).

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EXHIBIT B

NEW CONFIDENTIALITY AGREEMENT (SEE ATTACHED)

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EXHIBIT C

SUPPLEMENTAL RELEASE OF ALL CLAIMS 

On December __, 2019, I signed a TRANSITION AGREEMENT, PART-TIME EMPLOYMENT AGREEMENT, AND GENERAL RELEASE OF CLAIMS (the “Agreement”). As required by Section 15 of the Agreement, by signing this Supplemental Release of Claims (“Supplemental Release”), I hereby renew and reaffirm my release and waiver of all potential claims against the Released Parties as defined in the Agreement through the date of my execution of this Supplemental Release.

In accordance with the ADEA as defined in the Agreement, I acknowledge and agree that I have been fully advised of my rights under the ADEA with respect to the Agreement and this Supplemental Release as stated in Section 4 of the Agreement. Those agreements and understandings are hereby incorporated by reference and such understandings include, but are not limited to, that I have been advised to consult with an attorney before signing this Supplemental Release and have been given a period of 21 calendar days in which to consider whether to enter into this Supplemental Release. I understand that I do not have to use the entire 21-day period before signing this Supplemental Release and may waive this right. If I enter into this Supplemental Release, I understand that I may revoke the Supplemental Release and that any such revocation must be in writing, sent via certified mail or email to the General Counsel of the Company, and postmarked on or before the end of the 7th calendar day after my timely execution of this Supplemental Release. If I revoke this Supplemental Release, I understand that this Supplemental Release will be null and void, and that the Company will not engage me as a part-time employee or provide me with the benefits described in Section 1(c) and 2 of the Agreement. If I do not revoke this Supplemental Release, it will become effective, irrevocable, binding and enforceable on the 8th day after I execute it.

I understand that my entitlement to the consideration described in Section 1(c) of the Agreement and my employment as a part-time employee as described in Section 2 of the Agreement is conditioned upon me signing, not revoking, and abiding by the terms of the Agreement and this Supplemental Release.

If I sign this Supplemental Release, I understand that I must sign and return it to the General Counsel of the Company within 21 calendar days after the Retirement Date as defined in the Agreement, but not before the day after the Retirement Date.

	
			
	 
	Date:
	 

	Lawrence Mehren
	 
	 

10Exhibit

EXHIBIT 10.8

January 31, 2020

Jack Phillips
Delivered Electronically via Email

Re: Appointment to CEO

Dear Jack:

We are delighted to enter into this Letter Agreement (the “Agreement”)  under which you will serve as the Chief Executive Officer of Accelerate Diagnostics, Inc. (the “Company”). Your start date as President and Chief Executive Officer will be February 1, 2020 (“Start Date”). Once this Agreement becomes effective, it will form the entire agreement between you and the Company with respect to the matters described in this Agreement and it will supersede and replace any prior understandings (whether oral or written) with respect to the subject matter described herein, including the letter agreement between you and the Company, dated August 6, 2019. 

		
	Provision
	Agreement

		
	Location:
	Your principal place of employment will be the Company’s principal executive offices in Tucson, Arizona.  

Title; Reporting; Duties;
		
	No Conflicts:
	Beginning on the Start Date, you will serve as the President and Chief Executive Officer of the Company.  In your capacity as the President and Chief Executive Officer, you will have control over, and responsibility for the overall management of the Company and its subsidiaries, and you will report to the Company’s board of directors (the “Board”). 

You understand that, while you are employed with the Company, your employment services will be full-time and exclusive to the Company and that you will be expected to devote substantially all of your full business time, attention, energy and skills to the Company. You agree to serve the Company faithfully, loyally, honestly and to the best of your ability. You will not, without the express written consent of the Board, engage in any other commercial activity or outside employment.

The preceding paragraph is not intended to prohibit you from engaging in charitable or nonprofessional activities such as personal investments or conducting private business affairs, as long as they do not conflict or interfere with the performance of your duties to the Company. You agree to observe and comply with the Employee Confidentiality Agreement you signed, dated August 6, 2019, and the Company’s rules and policies, as the same may be adopted and amended from time to time. 

		
	Board Seat: 
	So long as you are employed as Chief Executive Officer, the Company will use its reasonable efforts, subject to applicable law and the rules of the Nasdaq Stock Market (“Nasdaq”) and the Company’s bylaws, to cause you to be nominated for election to the Board at the Company’s annual shareholder meeting (and for future years, re-election) as a director of the Company.

		
	Base Salary:
	$595,000 per year (the “Base Salary”) to be paid according to the Company’s normal payroll cycle.  Your Base Salary will be reviewed at least annually and may be adjusted upward or downward by the Compensation Committee of the Board of Directors (the “Compensation Committee”) in its sole discretion.

		
	CEO Equity Grant: 
	On the Start Date, you will be granted 50,000 Restricted Stock Units under our 2012 Omnibus Equity Incentive Plan, as amended (the “Equity Plan”).  The Grant will be subject to a 5-year annual vesting schedule with the first annual vesting and issuance 

occurring on the one-year anniversary of the Start Date. The Grant will be subject to such other terms and conditions specified by the Compensation Committee, the Equity Plan, the award agreement that you must execute as a condition of the grant, and the Company’s insider trading policy. 

Annual Incentive
		
	Opportunity:
	Beginning January 1, 2020 and for each full calendar year during the Term thereafter, you will be eligible to participate in an annual incentive program adopted in writing and approved by the Compensation Committee (the “AIP”).  Your target incentive under the AIP will equal 100% of your Base Salary as of the first day of the calendar year, with the opportunity to earn up to (but not exceed) 150% of your Base Salary as of the first day of the calendar year. Whether you are entitled to receive an AIP payment, and the amount and form of such payment, will depend on the attainment of written quantitative and qualitative performance goals, including financial performance goals, establish by the Compensation Committee in its sole discretion. The amount and form of the AIP, if any, will be certified by the Compensation Committee in February of the year following the year to which the AIP relates, and the earned AIP, if any, will be paid to you no later than March 15 of the year following the year to which the AIP relates (e.g., the AIP for 2020, if any, will be paid no later than March 15, 2021).  Except as set forth below, you must be employed by the Company through the date the AIP is paid in order to earn and be eligible to receive the AIP.

Long-Term Incentive
		
	Compensation:
	Beginning January 1, 2021 and for each full calendar year during the Term thereafter, you will be eligible to receive grants of stock options, performance shares and other awards under the Equity Plan (the “Equity Awards”).  The amount of Equity Awards, the mix of Equity Awards, the vesting schedule and the other terms and conditions of the Equity Awards will be established by the Compensation Committee in its sole discretion, provided, that, for the 2021 calendar year your target Equity Award grant will equal 400% of your then Base Salary and will consist of an award mix of 50% non-qualified stock options and 50% performance shares. The Equity Awards will be subject to such other terms and conditions specified by the Compensation Committee, the Equity Plan, the award agreement that you must execute as a condition of the grant(s), and the Company’s insider trading policy.

		
	Benefits; Vacation:
	You will continue to be eligible to participate in the Company’s standard company benefit plans, as such plans may be amended, modified, or terminated by the Company from time to time, with or without notice, in accordance with the applicable benefit and vacation plan documents. For the avoidance of doubt, your participation in such plans will be subject to the terms and conditions set forth in the applicable benefit plan documents.

		
	Term:
	The initial term of your employment under this Agreement shall commence on the Start Date and shall continue until the two (2) year anniversary of the Start Date (the “Initial Term”). The Initial term will automatically extend on the same terms and conditions set forth below for additional one (1) year periods (each a “Renewal Term”), unless either party gives the other party written notice of non-renewal at least 30 days prior to the end of the Initial Term or any Renewal Term. The Initial Term, together with all Renewal Terms, are collectively referred to in this Agreement as the “Term.”

Unless otherwise indicated in a writing to you from the Board, upon your termination of employment with Company for any reason, and without any further action on your part, you will be deemed to immediately resign all other officerships, directorships, managerships, and other positions you hold with the Company and its affiliates. If for any reason this provision is determined to be insufficient to effectuate such resignations, you agree to sign any documents or instruments the Company determines necessary to effectuate such resignations.

Termination
		
	of Employment:
	This Agreement, and your employment hereunder, may be terminated at any time, for any reason, by you or the Company upon at least 30 days prior written notice, provided, that, the Company may terminate your employment immediately for Cause.  Upon your termination for any reason, the Company will pay you your accrued but unpaid Base Salary and any accrued but unpaid reasonable business expenses through your date of termination (the “Accrued Obligations”), with such amount paid in compliance in accordance with applicable law. In addition to the Accrued Obligations, you may be entitled to receive severance benefits and Equity Award acceleration as described below. 

		
	Death or Disability:
	This Agreement, and your employment hereunder, will terminate immediately upon your death or Disability (as defined in Exhibit A). In such case, you (or your spouse or estate) will be entitled to the Accrued Obligations.

Termination and
Severance Prior to
		
	a Change of Control:
	In the event your employment is terminated by the Company without Cause or by you with Good Reason (as defined in Exhibit A) prior to a Change of Control (as defined in Exhibit A), then, in addition to the Accrued Obligations, and subject to your timely execution (and non-revocation) of the release described below, you will be entitled to receive a cash severance payment equal to the sum of: (i) 12 months of your then Base Salary; and (ii) your average earned AIP for over the Term (collectively, the “Base Severance Amount”). The Base Severance Amount will be paid to you in installments over a 12 month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below.  In addition to the Base Severance Amount, you will be entitled to receive a pro-rata AIP for the year in which your termination occurred, with such pro-rata AIP paid at the same time described above.

Full Vesting of Equity Awards
		
	on Change of Control:
	Upon the closing of a transaction that results in a Change of Control, and notwithstanding anything in the Equity Plan to the contrary, your Option and other Equity Awards shall fully vest and become exercisable. 

Termination and 
Severance Following 
		
	a Change of Control:
	In the event your employment is terminated by the Company without Cause or by you with Good Reason (as defined in Exhibit A) during the 12 month period following a Change of Control, then, in addition to the Accrued Obligations, and subject to your timely execution (and non-revocation) of the release described below, you will be entitled receive a cash severance payment equal to the sum of: (i) 18 months of your then Base Salary; and (ii) 18 times the monthly amount that is charged to COBRA qualified beneficiaries for the same medical coverage options elected by you immediately prior to your last day of employment (collectively, the “Enhanced Severance Amount”). The Enhanced Severance Amount will be paid to you in installments over a 18 month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below. In addition to the Enhanced Severance Amount, you will be entitled to receive a pro-rata AIP for the year in which your termination occurred, with such pro-rata AIP paid at the same time described above. 

Release Required to 
		
	Receive Severance:
	In order to receive the severance pay and other benefits described above, you must, no later than 60 days following your last day of employment, execute (and not revoke) a general release and waiver of any claims that you may have in connection with your employment and termination of employment with the Company and its affiliates.  

Notwithstanding anything in this Agreement to the contrary, if the Company concludes that the severance pay and benefits are subject to Section 409A of the Internal Revenue Code, and if the consideration period described in the release, plus the revocation period described in the release spans two (2) calendar years, then, to the extent required by Section 409A of the Code, such severance payments and benefits shall not begin to be paid until the second calendar year (and such first installment shall include installment payments that would otherwise have been made prior to such date).

		
	Restrictive Covenants:
	This offer is contingent upon you, on your Start Date, signing the Restrictive Covenant Agreement attached hereto as Exhibit B. 

		
	Cooperation: 
	Following the termination of your service with the Company for any reason, you agree to cooperate fully with the Company and with the Company’s counsel in connection with any present and future actual or threatened litigation, administrative proceeding or other investigation involving the Company or any affiliate that relates to events, occurrences or conduct occurring (or claimed to have occurred) during your employment.  You are hereby instructed to tell the truth in any litigation, administrative proceeding, or other investigation involving the Company and nothing herein shall be deemed or construed to suggest otherwise.

Non-Disparagement; 
		
	Social Media: 
	During the Term and following the termination of your service for any reason, you agree that you will not criticize, defame, be derogatory toward or otherwise disparage the Company, its products, services, or the Company’s past, present and future officers, directors, managers, stockholders, agents, representatives, employees, or affiliates, or its or their business plans or actions, to any third-party, either orally or in writing; provided that that this provision will not preclude you from giving truthful testimony in response to a lawful subpoena or preclude any conduct protected under any local, state or federal law, including those providing “whistleblower” protection to you or the right to engage in concerted activities. Finally, on the date of your termination of service for any reason, you agree to update your profile on social media websites (such as LinkedIn) to reflect that you are no longer an employee of the Company.

		
	Dispute Resolution: 
	You and the Company agree to meet to informally in a good faith effort to resolve any issues arising under this Agreement. If the parties are unable to resolve their differences, they agree to submit to binding arbitration in Tucson, Arizona, any and all claims and disputes arising hereunder. The parties agree that any dispute will be heard by a single arbitrator, applying Arizona and Federal substantive law, as applicable, in accordance with the American Arbitration Association’s Employment Arbitration Rules. If necessary, an action may be brought in any court of competent jurisdiction solely to compel arbitration or enforce an arbitration award (or for injunctive relief to enforce the Restrictive Covenants of this Agreement).  The prevailing party at arbitration shall be awarded reasonable attorneys’ fees and costs. This agreement to arbitrate survives the termination of your employment. 

You expressly agree and understand that, by agreeing to arbitration to resolve all claims described herein, you, as well as the Company, are waiving your right to a jury or court trial for all such claims. You further understand that arbitration is a private, claim resolution process which utilizes a neutral third-party, instead of a judge or jury, to resolve all claims and typically has more limited discovery than in a case filed in court.  You understand that you may refuse to sign this Agreement, but that if the Agreement is not signed, you will not be entitled to the compensation and benefits outlined in this Agreement. 

___________

Employee must initial above, indicating his agreement to submit all claims to arbitration.

		
	Return of Property:
	Upon the Company’s request or your termination of employment for any reason, you shall promptly return to the Company all property of the Company, including but not limited to: originals and hard and electronic copies of records, documents, Confidential Information, computer and office equipment, other equipment, plans, designs, electronic devices, keys, access cards, passwords, credit cards, and other tangible and intangible items, in whatever form, in your possession or control. You understand that all electronic mail, equipment, and all computer hardware and software are property of the Company.

		
	Miscellaneous:
	To the extent required by law, the Company shall withhold from any payments due to you under this Agreement any applicable federal, state or local taxes. You hereby acknowledge that neither the Company nor any of its affiliates, shareholders, members, directors, managers, officers, employees, agents or representatives have provided you with any tax-related advice with respect to the matters covered by this Agreement and that you are solely responsible for obtaining your own tax advice with respect to the matters covered by this Agreement.

This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (i) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (ii) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof.

Each party acknowledges that such party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each party.

		
	Section 409A of the Code:
	This Agreement shall comply with Section 409A of the Internal Revenue Code or an exception thereto and each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Nevertheless, the Company does not and cannot guarantee any particular tax effect or treatment of the amounts due under this Agreement.  Except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to you, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided pursuant to this Agreement. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. You do not have any right to make any election regarding the time or form of any payment due under this Agreement.  Notwithstanding anything in this Agreement to the contrary, if the Company concludes, that the Base Severance Amount or the Enhanced Severance Amount are subject to Section 409A of the Internal Revenue Code, then no such Severance Amount will be paid prior to your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)). Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).

If the Base Severance Amount or the Enhanced Severance Amount are subject to Section 409A of the Internal Revenue Code, and if you are a “specified employee” as defined in Treasury Regulation Section 1.409A-1(i)(1) on the date of your termination of employment, such payments shall not begin until the first day of the seventh month following your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)) (and such first payment shall include all prior payments that 

would otherwise have been made prior to such date).

		
	Section 280G of the Code:
	In the event that any payments, distributions, benefits or entitlements of any type payable to you, whether or not payable upon a termination of employment (“Payments”): (i) constitute “parachute payments” within the meaning of Section 280G of the Code; and (ii) but for this Section would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Payments shall be reduced to such lesser amount (the “Reduced Amount”) that would result in no portion of the Payments being subject to the Excise Tax; provided, however, that such Payments shall not be so reduced if a nationally recognized accounting firm or compensation consulting firm selected by the Company (the “Accountants”) determines that without such reduction, you would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Internal Revenue Code, federal, state and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal rates which applied (or is likely to apply) to you for the tax year in which the Payments are to be made, or such other rate(s) as the Accountants determine to be likely to apply to you in the relevant tax year(s) in which any of the Payments are expected to be made), an amount that is greater than the amount, on a net after-tax basis, that you would be entitled to retain upon receipt of the Reduced Amount.  Unless otherwise agreed in writing, any determination made under this paragraph shall be made in good faith by the Accountants in a timely manner and shall be binding on the parties absent manifest error. In the event of a reduction of Payments pursuant to this paragraph, the Payments shall be reduced in the order determined by the Accountants that results in the greatest economic benefit to you in a manner that would not result in subjecting you to additional tax under Section 409A of the Internal Revenue Code. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Internal Revenue Code, and other applicable legal authority.  The Accountants shall provide detailed supporting calculations to both you and the Company and the Company shall bear the cost of all fees charged by the Accountants in connection with any calculations contemplated by this Section.  If the provisions of Sections 280G and 4999 of the Internal Revenue Code are repealed without succession or if the Company determines that such provisions do not apply to it and/or you for whatever reason, this paragraph shall be of no further force or effect.

If you are in agreement with the terms and conditions of this Agreement, please execute and date the Agreement and return a copy to me.

	
		
	 
	Sincerely,

	 
	Accelerate Diagnostics, Inc. 

	 
	

	 
	By: /s/ John Patience

	 
	John Patience, Chairman, Board of Directors

	Accepted and agreed to:
	 

	 
	 

	/s/ Jack Phillips
	1/31/2020

	Jack Phillips
	Date

Exhibit A

Letter Agreement Definitions

“Cause” to terminate your employment shall exist if the Company reasonably determines after due inquiry that any one or more of the following has occurred: (i) your commission or conviction of, or plea of guilty or nolo contendere to, a felony; (ii) your material breach of this Agreement, any other agreement you have entered into with the Company, or of any fiduciary duty you have to the Company; (iii) misconduct that is materially injurious to the Company or a significant violation of the Company’s harassment or discrimination policies; (iv) your habitual drug or alcohol use which materially impairs your ability to perform your duties for the Company; (v) your engaging in fraud, embezzlement or any other illegal conduct that is materially injurious to the Company or any of its affiliates; (vi) deliberate or intentional refusal, or habitual failure to discharge your employment duties, responsibilities or obligations or to follow the Company’s policies or procedures which is not cured, if curable, within 10 days following the Company’s written notice to you of such behavior; or (vii) your engaging in any illegal, unethical, or immoral act (inside or outside of the scope of your employment) that results in material reputational or financial harm to the Company or any of its affiliates.

“Change of Control” shall have the meaning ascribed to it in the Equity Plan. 

“Disability” means you are unable to perform your duties under this Agreement for 90 consecutive days in any 12-month period.

“Good Reason” means: (i) a material diminution of your base compensation; (ii) a material diminution of your authorities, duties, or responsibilities; (iii) any action or inaction that constitutes a material breach of this Agreement by the Company; or a (iv) material change in the geographic location at which you are required to provide services. For a termination to constitute “Good Reason” for purposes of this Agreement: (1) you must provide a notice of termination to the Company within 30 days of the initial existence of the facts or circumstances constituting such event; (2) the Company must fail to cure such facts or circumstances within 30 days after receipt of such notice; and (3) you must actually terminate your employment within 30 days after the expiration of the cure period described in clause (2).

Exhibit B

Employee Restrictive Covenant Agreement

In consideration for Accelerate Diagnostics, Inc. (the “Company”) agreement to employ me and provide me with the compensation and benefits described in the attached Letter Agreement and access to the Company’s Confidential Information (as defined below) and trade secrets, I understand, acknowledge and agree as follows:

		
	Restrictive Covenants:
	Non-Solicitation of Customers/Prospective Customers. You agree, for the duration of the Time Limit (as defined below), that you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s current customers or clients with whom you have had contact in the past year to withdraw, curtail, cancel, or decrease the level of their business with the Company or request that they do business with any third party in competition with the Company. You further agree that, for the duration of the Time Limit, you will not, either directly or indirectly, or in any individual or representative capacity, request or solicit any of the Company’s prospective customers (defined as any person or entity who has been directly solicited to become a customer or client by the Company and with whom you have had contact with within the past year or possesses Confidential Information about) or clients with whom you have had contact with in the past year or possesses Confidential Information about to forgo doing business with the Company or request that such prospective customer or client do business with any third party in competition with the Company.

Non-Solicitation of Employees/Applicants.  You agree, for the duration of the Time Limit, that you will not, either directly or indirectly, or in any individual or representative capacity, solicit, induce or encourage or attempt to solicit, induce or encourage any Company employee and/or applicant to terminate his/her employment or prospective employment with the Company.

Non-Competition.  You agree, for the duration of the Time Limit, (as defined below), that you will not, either directly or indirectly or in any individual or representative capacity, be employed by, engage, own, manage, operate, control, aid, or assist another in the operation, organization or promotion of, participate in, advise, contract with or otherwise engage in any manner with the ownership, management, operation, or control of any business, which has a place of business or regularly conducts business in the Geographical Limit (as defined below) and that promotes or sells products or services competitive with those of the Company. You acknowledge and agree that a business will be deemed “competitive” with the Company if it performs any of the services or produces, distributes or sells any of the products or services provided or offered by the Company during the term of your relationship with the Company.

Tolling.  The non-competition and non-solicitation Time Limits set forth above shall be tolled during any period in which you are in breach of the restrictions set forth herein.

Reasonable Limitations.  You hereby acknowledge and agree that the covenants and obligations made and undertaken in this Agreement are fair and reasonable with respect to duration, geographic area and scope of activity, and do not (and shall not) prevent you from earning a livelihood in complying with the covenants herein.

Injunctive Relief. You agree that a breach of the covenants described herein will result in substantial and irreparable damages to the Company, which would be difficult to fully ascertain and calculate, and, by reason of such fact, you agree that, in the event of any such breach or threatened or anticipated breach, the Company will have the right to a restraining order and injunction, both temporary and permanent, enjoining and restraining any such breach or threatened breach, without the necessity of proving 

actual damages or posting a bond. Such injunctive relief will be in addition to any other remedies available to the Company at law or in equity.

Survival of Restrictive Covenants.  Your acknowledgements and agreements set forth in this Agreement shall survive the expiration or termination of this Agreement and the termination of your employment with the Company for any reason.

		
	Notice to Future Employers: 
	You agree that you will notify, and the Company shall have the right to notify, any future or prospective employers, or individuals or entities with whom you may be entering into a contractual relationship, of the Restrictive Covenant provisions of this Agreement for purposes of ensuring that the Company’s interests are protected.

Company Proprietary
		
	Information:
	While you are providing services to the Company, the Company may disclose or make available to you, Confidential Information.  By signing this Agreement, you agree to: (i) protect and safeguard the confidentiality of the Confidential Information with at least the same degree of care as you would protect your own confidential information, but in no event with less than a commercially reasonable degree of care; and (ii) not use or disclose the Confidential Information, or permit it to be accessed, used or disclosed, for any purpose other than to carry out the duties assigned to you by the Company or as may be required to be disclosed pursuant to applicable federal, state or local law, regulation or a valid order issued by a court or governmental agency of competent jurisdiction. Upon your termination of service for any reason, or upon the Company’s written request, you shall promptly return to the Company all copies, whether in written, electronic or other form or media, of the Confidential Information, or destroy all such copies at the Company’s written request and certify in writing to the Company that such Confidential Information has been destroyed. In addition to all other remedies available at law, the Company may seek equitable relief (including injunctive relief) against you to prevent the breach or threatened breach of this confidentiality covenant and to secure its enforcement. Notwithstanding anything in this Agreement to the contrary, pursuant to the Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  If you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s trade secrets to your attorney and use the trade secret in the court proceeding, if you file any document containing the trade secret under seal and do not disclose the trade secret, except pursuant to court order.

In addition to the obligations above, we may ask that you also sign the Company’s standard Confidentiality and Intellectual Property Assignment Agreement.  

		
	Definitions:
	For purposes of this Agreement, the following terms shall have the following meanings: 

“Confidential Information” means non-public information about the Company’s business affairs, products, services, confidential intellectual property, trade secrets, third-party confidential information and other sensitive or proprietary information, whether orally or in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential.” Confidential Information shall not include information that, at the time of disclosure and as established by documentary evidence: (i) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Agreement by you; (ii) is or becomes available to you on a non-confidential basis from a third-party source, provided that such third-party is not and was not prohibited from disclosing such Confidential Information; (iii) was known by or in the possession of you prior to being disclosed by or on behalf of the Company; or (iv) was or is independently 

developed by you without reference to or use, in whole or in part, of any of the Confidential Information.

“Geographical Limit” means the United States of America; if a court determines that the United States of America is too broad, then the state of Arizona; if a court determines that Arizona is too broad, then Maricopa and Pima County; if a court determines that Maricopa and Pima County is too broad, then Pima County only; if a court determines that Pima County is too broad, then Tucson, Arizona.

“Time Limit” means the term of your employment with the Company and for a period of 18 months thereafter; if a court determines that 18 months is longer than necessary to protect the Company’s legitimate interests, then 12 months; if a court determines 12 months is longer than necessary to protect the Company’s legitimate interests, then 9 months.

		
	Miscellaneous:
	This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles. If any term or provision of this Agreement is declared by a court or tribunal of competent jurisdiction to be invalid or unenforceable for any reason, this Agreement shall remain in full force and effect, and either: (i) the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable; or (ii) if such a modification is not possible, this Agreement shall be interpreted as if such invalid or unenforceable provision were not a part hereof.

Each party acknowledges that such party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each party.

The dispute resolution provisions of the Offer Letter attached hereto are incorporated by reference and by signing below you acknowledge and agree that any dispute arising under this Agreement will be resolved in accordance with the procedures set forth in the Offer Letter.   

	
		
	Accepted and agreed to:
	 

	 
	 

	/s/ Jack Phillips
	1/31/2020

	Jack Phillips
	Date

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