Document:

Exhibit 10.60

 

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into as of May 3, 2005, by and between Specialty Laboratories, Inc.,
a California corporation (the “Company”), and Vicki DiFrancesco (“Executive”),
and is effective upon execution by the Executive and approval by the Company’s
Board of Directors (the “Board”).

 

1.                                       Duties and Responsibilities.

 

A.                                   Executive
shall serve as the Company’s Senior Vice-President, Sales & Marketing,
or such other title or position as may be designated from time to time by the
Board.

 

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 primary offices located in 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 on or
before June 1, 2005, 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 $235,000 per year, 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 Board.

 

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 up to seventy-five percent (75%) 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 Board, and (2) Executive’s
achievement of management targets and goals as set by the Board.  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

 

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(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 Board’s sole discretion.

 

C.                                     Executive
will be paid a guaranteed minimum bonus for 2005 of $58,750 (representing 50%
of Executive’s maximum target bonus amount, prorated for 8 months of employment
with the Company in 2005).  Payment of
such guaranteed minimum bonus for 2005 will be paid only if Executive is employed
and in good standing at the end of the 2005 fiscal year.  Bonus payments will generally occur within
ninety (90) days after the close of the Company’s fiscal year.  The guaranteed bonus amount for 2005 is
intended to only be a minimum bonus amount, and may be increased at the
discretion of the Board.

 

D.                                    The
Company shall deduct and withhold from the compensation payable to Executive
hereunder, including the Incentive Bonus (if any) and the 2005 bonus amount,
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. 

 

Upon formal approval of the Board, Executive
will be granted an option to purchase 160,000 shares of the Company’s common
stock (“Options”), with the grant date and exercise price to be determined by
the Board.  Such options shall vest in
four (4) equal annual installments of 25% each on the anniversary date of
the grant.  Notwithstanding anything to
the contrary set forth herein or in the Company’s 2000 Stock Incentive Plan all
such Options shall immediately and fully vest upon a Change of Control as
defined herein and shall be fully exercisable by Executive at the time of the
Change in Control.  Except as
specifically set forth herein, the grant of the Options shall be governed
pursuant to the Company’s 2000 Stock Incentive Plan.

 

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.  Company shall also
reimburse Executive for reasonable lodging expenses while working at the
Company’s primary offices in Valencia, California.

 

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, 401(k) plan,
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.

 

B.                                     Executive
shall earn vacation time during the Employment Period at the rate of four (4) 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

 

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maximum accrual of 160 hours, or four (4) weeks,
of unused vacation time.  Once this
maximum 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, and for any Options
granted to Executive that have vested as of that date; nor in such case shall
Executive have any further obligation to the Company.

 

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 six (6) 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 six
(6) months
under COBRA.  If within twelve (12)
months following a Change in Control (as defined below), 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 twelve (12) 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 twelve
(12) months under
COBRA.  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.  All such payments made to Executive under this
Section 7(c) shall be collectively referred to as the “Severance
Compensation”.  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, and except for any obligations relative to any Options granted to
Executive that have vested as of that date, the Company shall have no further
obligation to Executive under this Agreement and Executive likewise shall have
no further obligation thereafter to the Company.  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.

 

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E.                                      Executive
will become entitled to receive the Severance Compensation set forth herein, provided and only if Executive
executes and delivers to the 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).

 

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:

 

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 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 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 less than 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 (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 Board; (ii) insubordination; (iii) 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

 

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the
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.

 

B.                                     Change in Control Acceleration. In the event of a Change of Control,
notwithstanding anything to the contrary set forth herein or in the Company’s
2000 Stock Incentive Plan, all such Options granted to Executive hereunder
shall immediately and fully vest, and shall be fully exercisable by Executive
at the time of the Change in Control.

 

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 Compensation
pursuant to Section 7, Executive shall, without prior written consent of
the Board, 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.

 

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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.

 

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 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:

 

Office of the General Counsel

Specialty Laboratories, Inc.

27027 Tourney Road

Valencia, California 91355

 

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

 

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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.

 

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 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

 

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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.

 

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/ Nicholas R. Simmons

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Nicholas R. Simmons

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice-President & General
  Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  May 3, 2005

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Victoria DiFrancesco

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  Date: 

  	
  May 3, 2005

  	
   

  
							

 

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Exhibit A

Form of General Release

 

GENERAL RELEASE OF ALL CLAIMS

 

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

 

21.                                 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.

 

22.                                 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 May 3, 2005.

 

23.                                 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 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.

 

24.                                 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:

 

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“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.

 

25.                                 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.

 

26.                                 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.

 

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

 

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

 

29.                                 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.

 

30.                                 The consideration described in paragraph 2
above constitutes the sole and exclusive consideration provided Executive under
this Agreement.  Subject to the
foregoing, 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.

 

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

 

10

 

32.                                 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.

 

33.                                 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.

 

34.                                 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;

 

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

 

35.                                 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.

 

36.                                 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.

 

37.                                 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

 

11

 

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.

 

38.                                 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 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.

 

39.                                 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.

 

40.                                 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:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Vicki DiFrancesco

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECIALTY LABORATORIES, INC.

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
						

 

12Exhibit 10.61

 

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into as of July 25, 2005, by and between Specialty Laboratories, Inc.,
a California corporation (the “Company”), and David C. Weavil (“Executive”),
and is effective upon execution by the Executive and approval by the Company’s
Board of Directors (the “Board”).

 

1.                                       Duties and Responsibilities.

 

A.                                   Executive
shall serve as the Company’s Chief Executive Officer.

 

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 primary offices located in 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 on July 27,
2005, 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 $400,000 per year, 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 Board.

 

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 up to sixty (60%) 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 Board, and (2) Executive’s
achievement of management targets and goals, to be set by the Board within
thirty (30) days of Executive’s employment commencement date.  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

 

1

 

Incentive Bonus shall be paid, will be made in
the Board’s sole discretion.  In the
event Executive’s employment with the Company terminates prior to the time of
bonus payments being made for a given year, the Executive and Company agree to
negotiate in good faith regarding whether a pro rata share of such annual bonus
shall be paid to Executive.

 

C.                                     Executive
agrees that Company shall deduct and withhold from the compensation payable to
Executive hereunder, including the Incentive Bonus, 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. 

 

Upon formal approval of the Board, or the
appropriate Committee of the Board, Executive will be granted an option to
purchase 425,000 shares of the Company’s common stock (“Options”), with the
grant date and exercise price to be determined by the Board.  Such options shall vest in three (3) equal
annual installments of 33.3% each on the anniversary date of the grant.  Notwithstanding anything to the contrary set
forth herein or in the Company’s 2000 Stock Incentive Plan ( “Plan”), in the
event of a Change in Control (as defined herein), fifty percent (50%) of any of
Executive’s then outstanding and unvested Options shall immediately and fully
vest, and shall be fully exercisable by Executive at the time of the Change in
Control; provided, however, that Executive remains employed with the Company
(or any successor entity following a Change in Control) for at least six (6) months
following the Change in Control.  In the
event Executive voluntarily resigns his/her employment within six (6) months
following such Change in Control, the Company shall have the right to
repurchase any such accelerated and exercised Options at the exercise price,
and Executive shall not be entitled to any proceeds from the sale of any such
accelerated and exercised Options, and Executive agrees to repay to Company any
such proceeds immediately upon such resignation.  In the event of such voluntary resignation by
Executive within six (6) months following a Change in Control, Executive
expressly authorizes Company to withhold, from Executive’s final salary
payment, vacation accrual, and/or other bonus amount owed to Executive, funds
necessary to recoup such proceeds from the sale of the accelerated and
exercised Options. Except as specifically set forth herein, the grant of the
Options shall be governed pursuant to the Company’s 2000 Stock Incentive Plan.

 

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 (pursuant to the Company’s
applicable policies and procedures) 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, 401(k) plan,
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.

 

2

 

B.                                     Executive
shall earn vacation time during the Employment Period at the rate of four (4) weeks
per year. Vacation shall accrue and be taken pursuant to the Company’s vacation
benefit policy set forth in the Company’s Employee Handbook, up to a maximum
accrual of 160 hours, or four (4) weeks, of unused vacation time.  Once this maximum 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, and for any Options granted
to Executive that have vested as of that date; nor in such case shall Executive
have any further obligation to the Company.

 

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 twelve (12) 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 twelve
(12) months under
COBRA.  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.  All such payments made to Executive under this
Section 7(C) shall be collectively referred to as the “Severance
Compensation”.  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, and except for any obligations relative to any Options granted to
Executive that have vested as of that date, the Company shall have no further
obligation to Executive under this Agreement and Executive likewise shall have
no further obligation thereafter to the Company.  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.

 

E.                                      Executive
will become entitled to receive the Severance Compensation set forth herein, provided and only if Executive
executes and delivers to the 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).

 

3

 

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:

 

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; provided,
however, that following a Change in Control, it is anticipated by the parties
that Executive’s duties,
responsibilities, status, reporting responsibilities, title, or offices may be
materially altered, and thus the parties agree that for a period of six (6) months
following a Change in Control, Executive may not rely on this Section 8(A) as
the basis for resignation for Good Reason;

 

B.                                     A reduction of the annual Base Salary that
Executive was eligible to receive from the Company and its affiliates
immediately before the reduction;

 

C.                                     A Change in Control after which the Executive
is not offered the same or equivalent position he/she held immediately
preceding such Change of Control; provided, however, that following a Change in
Control, it is anticipated by the parties that Executive’s position may be
materially altered, and thus the parties agree that for a period of six (6) months
following a Change in Control, Executive may not rely on this Section 8(C) as
the basis for resignation for Good Reason

 

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 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 Board; (ii) insubordination;
(iii) 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

 

4

 

due
to mental or physical illness which is determined to be total and permanent by
a physician selected by the 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.

 

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 Compensation
pursuant to Section 7, Executive shall, without prior written consent of
the Board, 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

 

5

 

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.

 

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 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:

 

Office of the General Counsel

Specialty Laboratories, Inc.

27027 Tourney Road

Valencia, California 91355

 

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.

 

6

 

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
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

 

7

 

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.

 

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/ Richard K. Whitney

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Richard K. Whitney

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chairman of the Board of Directors

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  July 21,2005

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David C. Weavil

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  July 21, 2005

  	
   

  
						

 

8

 

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 May 3, 2005.

 

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 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:

 

9

 

“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 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.  Subject to the
foregoing, 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.

 

10

 

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;

 

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

 

11

 

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 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:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  David C. Weavil

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECIALTY LABORATORIES, INC.

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
						

 

12

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