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Exhibit 10.2  

 
 

AGREEMENT    
  

        This
Agreement ("Agreement") is made and entered into by and between James B. Peter, M.D., Ph.D. ("Dr. Peter") and Specialty Laboratories, Inc., a California corporation
(the "Company") (hereinafter, Dr. Peter and the Company shall collectively be referred to as the "Parties"), with reference to the following facts: 

        A.
Dr. Peter has been employed by the Company as its Chief Executive Officer and Chairman of the Board of Directors of the Company. The terms of Dr. Peter's employment were
governed by a written Employment Agreement dated September 1, 2000 (the "Employment Agreement"). 

        B.
Dr. Peter has decided to end his employment relationship with the Company, and has tendered his voluntary resignation to the Company's board of directors (the
"Board") effective April 21, 2002 (the "Resignation Date"), which was accepted by the Board on that date. 

        C.
The Employment Agreement does not provide for severance payments to Dr. Peter in the event of a voluntary resignation, but does provide for the continuation of
Dr. Peter's salary for two years in the event that the Company terminates Dr. Peter's employment other than for Cause (as defined in the Employment Agreement) or should Dr. Peter
resign for Good Reason (as defined in the Employment Agreement). After discussions between the Parties, the Company has agreed to offer Dr. Peter a severance payment as described below in
exchange for certain covenants and obligations as described below. 

        NOW,
THEREFORE, in consideration of the covenants and promises contained herein, the Parties hereto agree as follows: 

        1.    Voluntary Resignation of Corporate Positions. Dr. Peter acknowledges that he has
voluntarily resigned, effective April 21, 2002, all positions held as an officer and employee of the Company, and since April 21, 2002, he has not been an employee of the Company. 

        2.    Term. This Agreement shall have a term of two (2) years, commencing April 21, 2002
and terminating April 21, 2004 (the "Term"), unless terminated earlier in accordance with this Agreement. 

        3.    Payment and Benefits.

        (a)  The
Company agrees to pay Dr. Peter $600,000 per year through April 21, 2004 to be paid in accordance with the Company's normal standard payroll schedule.
The Company shall deduct and withhold from the compensation payable to Dr. Peter hereunder any and all applicable Federal, state and local income and employment withholding taxes and any other
amounts required or authorized by Dr. Peter 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. Even though Dr. Peter is no longer a Company employee, the Parties acknowledge and agree that the payments required
by this subsection(a) are wages subject to Federal and state income tax withholding and FICA taxation. 

        (b)  During
the Term, Dr. Peter shall continue to be eligible to participate in all group term life insurance plans and group health plans that are made available to
the Company's (or its successors') executives on the most favorable terms offered to any of them (e.g., the lowest contribution rate). The Company shall not provide nor reimburse Dr. Peter for
any supplemental insurance products, including life insurance. 

        (c)  During
the Term, Dr. Peter shall receive reimbursement from the Company for business expenses incurred by Dr. Peter in the aggregate amount of $150,000 per
year payable in four equal 

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installments of $37,500, without any need to prove to the Company that he has or will incur business expenses of at least these amounts. The first payment shall be made within fifteen
(15) days after the execution of this Agreement, and subsequent payments shall be made thereafter on the first business day of August, November, February and May during the Term. In addition,
to furnish the office Dr. Peter intends to establish, within a week after being requested to do so by Dr. Peter, the Company shall deliver to that office (or such other location
Dr. Peter specifies) any or all of the furnishings of the office suite he occupied when his employment ended, as Dr. Peter requests. These payments and the provision of these furnishings
are intended to reimburse Dr. Peter for expenses incurred in the lease
and operation of an office, the employment of a secretary and all other business costs and expenses related to Dr. Peter's business activities. The Company shall not be responsible for any
business costs or expenses incurred by Dr. Peter except as provided in this paragraph. 

        (d)  The
Company shall assist Dr. Peter in the initial organizing of his office, including, but not limited to, setting up computers and fax machines. 

        (e)  Dr. Peter
shall have the right to request, on a reasonable basis, data, books and other materials from the Company's library; provided that the Company shall be
under no obligation to bear out-of-pocket expenses in connection therewith other than photocopying. Dr. Peter shall have the right to request courier service for
materials he has ordered from the UCLA or other libraries at such times as the Company is otherwise making trips to the facility in question for its own purposes. The Company shall use reasonable
efforts to accommodate any such requests for data, books and other materials. All such data, books and materials provided by the Company shall be delivered to Dr. Peter at his office or home,
whichever he specifies. 

        4.    Covenant Of Confidentiality.

        4.1  Acknowledgment of Confidentiality. Dr. Peter acknowledges that he has an obligation not to
disclose or use confidential, proprietary or trade secret information obtained during the course of his employment with the Company. Dr. Peter hereby acknowledges that during the course of his
employment with the Company he has acquired, created, developed or added to certain confidential and/or proprietary information regarding the Company and its affiliates and/or their respective
business ("Proprietary Information"), which Proprietary Information shall include, without limitation, all of the following materials and information (whether or not reduced to writing and whether or
not patentable or protected by copyright): inventions, processes, formulae, programs, technical data, "know-how," procedures, manuals, confidential reports and communications, marketing
methods, product sales or cost information, new product ideas or improvements, new packaging ideas or improvements, research and development programs, identities or lists of suppliers, vendors,
customers, financial information of the Company or its affiliates of any nature whatsoever, or any other confidential or proprietary information relating to the Company or its affiliates. The Parties
hereto agree that the failure of any Proprietary Information to be marked or otherwise labelled as confidential or proprietary information shall not affect its status as Proprietary Information.
Dr. Peter shall hold in the strictest confidence (except as approved by the Company in advance in writing), and shall not, directly or indirectly, disclose, divulge, reveal, report, publish,
transfer or otherwise communicate, or use for his own benefit or the benefit of any other person, partnership, firm, corporation or other entity, or use to the detriment of the Company or its
affiliates, or misuse in any way, any Proprietary Information. Dr. Peter and the Company each hereby stipulate that, as between them, all Proprietary Information acquired or made, developed or
conceived of in whole or in part by Dr. Peter constitutes important, material and confidential and/or proprietary information of the Company or its affiliates, constitutes unique and valuable
information, and affects the successful conduct of the business of the Company or its affiliates and its goodwill, and that the Company and/or its affiliates, as applicable, shall be entitled to
recover its damages, in addition to any injunctive 

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remedy for any breach of this Section. The foregoing notwithstanding, if, after consulting with legal counsel, Dr. Peter determines that he is legally compelled to disclose Proprietary
Information to any tribunal or governmental agency or else stand liable for contempt or suffer other similar censure or penalty, then the disclosure to such tribunal or governmental agency of only
that Proprietary Information which such counsel advises in writing is legally required to be disclosed, shall not constitute a breach of this Section, provided that Dr. Peter shall give the
Company as much advance notice of such disclosure as is reasonably practicable. 

        4.2  Prohibited Activity. Dr. Peter and the Company also recognize that an important part of
Dr. Peter's duties has been to develop goodwill for the Company and its affiliates through his personal contact with Clients (as defined below), employees, and others having business
relationships with the Company and its affiliates, and that there is a danger that this goodwill, a proprietary asset of the Company, may follow Dr. Peter upon the termination of his employment
relationship with the Company. Dr. Peter, accordingly, agrees as follows: 

        (a)  Prohibited Activities. Dr. Peter agrees that he will not at any time during the Term: (i) directly or
indirectly, whether for his own account or for the account of any other person, solicit, divert, or endeavor to entice any Client or supplier of the Company away from the Company or its affiliates, or
otherwise engage in any activity intended to terminate, disrupt, or interfere with the Company's or its affiliates' relationship with Clients or suppliers, or otherwise adversely affect the Company's
or its affiliates' relationship with Clients or suppliers or other business relationships of the Company and/or its affiliates; (ii) directly or through one or more intermediaries, solicit for
employment or recommend to any subsequent employer of Dr. Peter the solicitation for employment of, any person who, at the time of such solicitation, is employed by the Company or any
affiliate; (iii) represent to any person or entity, directly or indirectly, that he is an employee of the Company, or use Company materials in any manner, including, but not limited to, the
Company's e-mail system or letterhead; (iv) enter the Company's laboratories without the prior consent of the Chairman of the Board or Chief Executive Officer of the Company; and
(v) other than as required in his role as a director of the Company, communicate with or authorize any person on his behalf to communicate with the California Department of Health Services or
the federal Center for Medicare an Medicaid Services regarding the Company's business without the prior consent of the Chairman of the Board or the Chief Executive Officer of the Company. 

        "Clients"
shall mean those persons or entities who, at any time during Dr. Peter's course of employment with the Company were clients or customers of the Company or any affiliate,
or any predecessor of any of the foregoing. 

        (b)  Remedies. Dr. Peter understands that the Company would (i) immediately terminate the payment set forth in
Section 3 above, and (ii) seek an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by Dr. Peter, in addition to
any other remedies or damages to which the Company may be entitled at law or in equity, in the event Dr. Peter were to breach any of the terms of (A) Section 4.1 if such breach
has, or could reasonably be expected to have, an adverse effect on the Company, its business or its operations, or (B) Section 4.2. 

        Dr. Peter
acknowledges that monetary damages may not be sufficient to compensate the Company for any economic loss which may be incurred by reason of his 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 Dr. Peter from continuing such breach. 

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        5.    Acknowledgement. Dr. Peter acknowledges that he has received all salary (including deferred
salary from March 23, 2002 through the Resignation Date) and reimbursements incurred as of the Resignation Date and that he is not entitled to any vacation pay. 

        6.    Indemnification. The Company and any successor (a) shall continue to indemnify
Dr. Peter pursuant to that certain indemnification agreement, dated December 6, 2000, between the Company and Dr. Peter, and (b) if more protective of Dr. Peter, in
connection with Dr. Peter's employment with the Company prior to the Resignation Date, for a period of six (6) years after the Resignation Date, shall indemnify Dr. Peter under
the most protective indemnification agreement, arrangement, or terms it then provides to any director or officer and shall cover him as an insured under the most protective D&O insurance coverage with
which it then protects any such person. 

        7.    Board Membership. The Board shall nominate Dr. Peter for reelection to the Board at the
Company's annual meeting of Shareholders in 2003. During the Term, Dr. Peter shall be entitled to remain on any advisory board of the Company of which he was a member as of the Resignation
Date. 

        8.    Non-Admission Of Liability. Dr. Peter and the Company expressly understand and
agree that nothing contained in this Agreement shall constitute or be treated as an admission of any wrongdoing or liability on the part of Dr. Peter or the Company. 

        9.    No Other Payments Due. Dr. Peter understands and agrees that this Agreement is intended to
and does bar all claims Dr. Peter has or may have for wages, salaries, bonuses, commissions, overtime pay, vacation pay, severance pay, car allowance, benefits, costs, expenses, attorneys' fees
or any similar claims that Dr. Peter could possibly have against the Company or its affiliates, and that Dr. Peter is not entitled to receive and will not claim any right, benefit, or
compensation other than what is set forth above in this Agreement. 

        10.  Return Of Company Property. Dr. Peter agrees to return to the Company all office keys,
building access cards, Company credit cards, equipment, documents and any other materials of the Company ("Company Materials") that Dr. Peter has in his possession, custody or control within
ten (10) days after the date hereof (subject to the balance of this section), other than those documents and materials related to Dr. Peter's duties as a director of the Company. All
Company Materials are and shall remain
the sole property of the Company. Company Materials shall not include home office equipment that Dr. Peter currently possesses, which he shall retain, nor shall it include any documents in his
home as of the date hereof ("Home Files") or in his Company office as of the date his employment ceased ("Office Files") to the extent that such documents in the Home Files or Office Files are
designated as Personal Materials pursuant to the balance of this section. Within thirty (30) days after the date hereof, Dr. Peter shall deliver to the Company (or arrange for
pick-up by the Company) all Company Materials in his Home Files other than those documents or materials that Dr. Peter reasonably determines to be predominately of a personal nature
to Dr. Peter and which do not contain any Proprietary Information (as defined in Section 4.1) ("Personal Materials"). Personal Materials
shall include scientific publications and writings published or authored by persons who were not then affiliated with or employed by the Company. Within thirty (30) days after the date hereof,
the Company shall deliver to Dr. Peter's office (or his home if he so requests) the Personal Materials in his Office Files together with a list of the documents withheld from those files as
Company Materials. 

        11.  California Law Applies. This Agreement, in all respects, shall be interpreted, enforced and
governed by and under the laws of the State of California without regard to conflicts of laws. 

        12.  Successors And Assigns. It is expressly understood and agreed by Dr. Peter that this
Agreement and all of its terms shall be binding upon Dr. Peter and the Company's respective representatives, heirs, executors, administrators, successors and assigns. 

        13.  Attorneys' Fees. The Company will pay or reimburse reasonable attorneys' fees of Dr. Peter
in connection with the execution of this Agreement not to exceed $10,000. In the event that any party to 

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this Agreement asserts a claim for breach of this Agreement or seeks to enforce its terms, the prevailing party in any such proceeding shall be entitled to recover costs and reasonable attorneys'
fees. 

        14.  Headings. The headings in each section herein are for convenience of reference only and shall be
of no legal effect in the interpretation of the terms hereof. 

        15.  Integration. This Agreement constitutes a single, integrated, written contract, expressing the
entire agreement between the Parties. In this regard, Dr. Peter represents and warrants that he is not relying on any promises or representations which do not appear written herein.
Dr. Peter further understands and agrees that this Agreement can be amended or modified only by a written agreement, signed by both of the Parties hereto. 

        16.  Voluntary Agreement. Dr. Peter understands and agrees that he may be waiving significant
legal rights by signing this Agreement. Dr. Peter represents that he has been advised by legal counsel of his choice regarding this Agreement, and represents that he has entered into this
Agreement voluntarily, with a full understanding of and in agreement with all of its terms. 

        THE
SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE AGREEMENT. THE SIGNATORIES HAVE CONSULTED WITH LEGAL COUNSEL OF THEIR CHOICE REGARDING THIS AGREEMENT. THE SIGNATORIES FULLY UNDERSTAND
THE FINAL AND BINDING EFFECT OF THIS AGREEMENT. THE SIGNATORIES ARE SIGNING THIS AGREEMENT VOLUNTARILY. 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates indicated below. 

	DATED: June 7, 2002	 	 	 
	

	
 	

 	

 
	 	 	/s/  JAMES B. PETER      
JAMES B. PETER, M.D., Ph.D.
	

	
 	

 	

 
	DATED: June 7, 2002	 	SPECIALTY LABORATORIES, INC.
	

	
 	

 	

 
	 	 	By:	/s/  DOUGLAS S. HARRINGTON      

	 	 	Its:	CEO

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Exhibit 10.3  

 
 

SEVERANCE AGREEMENT AND GENERAL RELEASE    
  

        This
Severance Agreement and General Release ("Agreement) is made and entered into by and between Paul F. Beyer ("Executive") and Specialty Laboratories, Inc., a California
corporation (the "Company") (hereinafter, Executive and the Company shall collectively be referred to as the "Parties"), with reference to the following facts: 

        A.
Executive has been employed by the Company as its President and Chief Operating Officer. The terms of Executive's employment were governed by a written Employment Agreement dated
September 1, 2000 (the "Employment Agreement"). 

        B.
Executive has decided to end his employment relationship with the Company, and has tendered his voluntary resignation effective June 7, 2002, which was accepted by the
Company's board of directors (the "Board"). 

        C.
The Employment Agreement does not provide for severance payments to Executive in the event of a voluntary resignation but does provide for the continuation of Executive's salary for
two years in the event that the Company terminates Executive's employment other than for Cause (as defined in the Employment Agreement) or should Executive resign for Good Reason (as defined in the
Employment Agreement). The Company has agreed to offer Executive a severance payment and other consideration in exchange for certain covenants and obligations, as described in this Agreement, and in
exchange for Executive's general release of any and all claims and disputes, whether known or unknown, which exist or could exist on Executive's behalf against the Company or its affiliates, arising
out of Executive's
employment with the Company as its President and Chief Operating Officer and the cessation of that employment relationship. 

        NOW,
THEREFORE, in consideration of the covenants and promises contained herein, the Parties hereto agree as follows: 

        1.    Voluntary Resignation of Corporate Positions. Executive has voluntarily
resigned, effective June 7, 2002, all positions held as an officer and employee of the Company, other than his position as a member of the board of directors of the Company (the "Board").
Executive acknowledges and understands that from June 7, 2002, he will not be an employee of the Company. Executive will be paid for all accrued vacation and salary through June 7, 2002. 

        2.    Severance Payment.

        (a)  The
Company agrees to pay Executive $370,000 per year through June 7, 2004 (the "Severance Period") to be paid in accordance with the Company's normal standard
payroll schedule. The Company shall deduct and withhold from the compensation payable to Executive hereunder 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. Even though Executive is no longer a Company employee, the Parties acknowledge and agree that the payments required by
this subsection(a) are wages subject to Federal and state income tax withholding and FICA taxation. 

        (b)  The
Company shall make payments to the appropriate third parties to continue Executive's existing health insurance coverage under the Company's group insurance plan (and
any of Executive's family members' existing health insurance coverage under the Company's group insurance plan) for a period of eighteen (18) months following the termination of Executive's
employment with the Company. The Company shall not provide nor reimburse Executive for any supplemental insurance products, including life insurance, or any other employment benefit. 

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        (c)  Executive
agrees that the severance payments provided above are more than the Company is required to pay under its normal policies and procedures and pursuant to
Executive's Employment Agreement. Executive further agrees that these payments are fully satisfactory to him and constitute valid consideration in exchange for the releases and commitments set forth
in this Agreement. By signing this Agreement, Executive acknowledges and agrees that absent this Agreement, Executive has no legal entitlement to the consideration provided herein and that the
consideration given to Executive represents good and sufficient value for the releases and other agreements set forth in this Agreement. 

        3.    No Filing Of Claims. 

        3.1  Executive represents and warrants that he does not presently have on file, and further represents that he will not
hereafter file, any claims, charges, grievances, actions, appeals or complaints against the Company and its affiliates, and their respective parents, subsidiaries, and related entities or
corporations, and their past and present officers, directors, shareholders, employees, agents, partners, attorneys, heirs, successors, and assigns, in or with any administrative, state, federal or
governmental entity, agency, board or court, or before any other tribunal or panel of arbitrators, public or private, based upon any actions by the Company or its affiliates occurring prior to the
date of this Agreement. 

        3.2  The Company represents and warrants that it does not presently have on file, and further represents that it will not
hereafter file, any claims, charges, grievances, actions, appeals or complaints against Executive, in or with any administrative, state, federal or governmental entity, agency, board or court, or
before any other tribunal or panel of arbitrators, public or private, based upon any actions by Executive occurring prior to the date of this Agreement other than as provided in Section 5. 

        4.    Release Of All Claims By Executive. In consideration for the promises and
compensation provided above, Executive hereby agrees to waive, release, acquit and forever discharge the Company, and its affiliates, and their respective parents, subsidiaries, and related entities,
and their past and present officers, directors, shareholders, employees, agents, partners, attorneys, heirs, successors, and assigns, from any and all claims, demands, actions, charges, complaints and
causes of action (hereinafter collectively referred to as "claims"), of whatever nature, whether known or unknown, which exist or may exist on Executive's behalf as of the date of this Agreement,
including but not limited to any and all tort claims, contract claims (express or implied), wage claims, bonus claims, wrongful termination claims, public policy claims, whistleblower claims, implied
covenant of good faith and fair dealing claims, retaliation claims, statutory claims, personal injury claims, emotional distress claims, invasion of privacy claims, defamation claims, fraud claims,
and any and all claims arising under any federal, state or other governmental statute, law, regulation or ordinance covering discrimination in employment, including but not limited to Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act and the California Fair Employment and Housing Act, covering
discrimination in employment including race, color, religious creed, national origin, ancestry, physical or mental disability, medical condition, marital status, family care leave, pregnancy, sex,
sexual orientation, and harassment or retaliation. 

        5.    Release Of All Claims By The Company. In consideration for the promises
and releases provided herein, the Company, on its behalf and on behalf of its affiliates, and their respective parents, subsidiaries, and related entities, and their past and present officers,
directors, shareholders, employees, agents, partners, attorneys, heirs, successors, and assigns, hereby agrees to waive, release, acquit and forever discharge Executive, and his heirs, successors, and
assigns, from any and all claims, of whatever nature, whether known or unknown, which exist or may exist on the Company's, or its affiliates' behalf as of the date of this Agreement, including but not
limited to any and all tort claims, contract claims (express or implied), public policy claims, implied covenant of good faith and fair dealing claims, statutory claims, invasion of privacy claims,
defamation claims, fraud claims, and any and all claims 

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arising under any federal, state or other governmental statute, law, regulation or ordinance; provided,  however, that this Section is not intended to, and
shall not, waive or release any claims the Company or its affiliates have or may have against
Executive for theft, embezzlement or misappropriation of funds by Executive while employed by the Company. The Company and its affiliates are not presently aware of any such claims against Executive,
but expressly reserves the right to bring such claims (if any), notwithstanding the release language contained in this Section to the contrary. 

        6.    Waiver Of Unknown Claims. It is further understood and agreed by Executive
and the Company that, except as expressly set forth in Section 5 above, Executive and the Company hereby expressly waive and relinquish any and all claims, rights or benefits that they may have
under California Civil Code section 1542, which provides as follows: 

"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." 

        In
connection with such waiver and relinquishment, and notwithstanding the provisions of California Civil Code section 1542, each Party hereby expressly acknowledges that this
Agreement is intended to include, and does include in its effect, without limitation, all such claims which each Party does not know or suspect to exist at the time of the execution of this Agreement,
and that this Agreement contemplates the extinguishment of those claims. Each Party further acknowledges, understands and agrees that this representation and commitment is essential to the other Party
and that this Agreement would not have been entered into were it not for this representation and commitment. 

        7.    Exercise Of Stock Options

        The
Parties acknowledge and agree that Executive currently holds 521,641 option shares of the Company that are fully exercisable through March 31, 2009, pursuant to the terms of
the 1999 Stock Option/Stock Issuance Plan and related documents, notwithstanding any separation of service that may occur prior to March 31, 2009. The parties further acknowledge and agree that
Executive currently holds 12,188 option shares of the Company that are exercisable pursuant to the terms of the Company's 2002 Stock Incentive Plan and related documents. 

        8.    Covenant Of Confidentiality.  

         8.1  Acknowledgment of Confidentiality. Executive acknowledges that he has an
obligation not to
disclose or use confidential, proprietary or trade secret information obtained during the course of his employment with the Company. Executive hereby acknowledges that during the course of his
employment with the Company, he has acquired, created, developed or added to certain confidential and/or proprietary information regarding the Company and its affiliates and/or their respective
business ("Proprietary Information"), which Proprietary Information shall include, without limitation, all of the following materials and information (whether or not reduced to writing and whether or
not patentable or protected by copyright): inventions, processes, formulae, programs, technical data, "know-how," procedures, manuals, confidential reports and communications, marketing
methods, product sales or cost information, new product ideas or improvements, new packaging ideas or improvements, research and development programs, identities or lists of suppliers, vendors,
customers, financial information of the Company or its affiliates of any nature whatsoever, or any other confidential or proprietary information relating to the Company or its affiliates. The Parties
hereto agree that the failure of any Proprietary Information to be marked or otherwise labelled as confidential or proprietary information shall not affect its status as Proprietary Information.
Executive shall hold in the strictest confidence (except as previously approved by the Company in writing), and shall not, directly or indirectly, disclose, divulge, reveal, report, publish, transfer
or otherwise communicate, or use for his own benefit or the benefit of any other person, partnership, firm, corporation or other entity, or use to the detriment of the Company or its affiliates, or
misuse in any way, any Proprietary Information. 

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Executive and the Company each hereby stipulate that, as between them, all Proprietary Information acquired or made, developed or conceived of in whole or in part by Executive constitutes important,
material and confidential and/or proprietary information of the Company or its affiliates, constitutes unique and valuable information, and affects the successful conduct of the business of the
Company or its affiliates and its goodwill, and that the Company and/or its affiliates, as applicable, shall be entitled to recover its damages, in addition to any injunctive remedy for any breach of
this Section. The foregoing notwithstanding, if, after consulting with legal counsel, Executive determines that he is legally compelled to disclose Proprietary Information to any tribunal or
governmental agency or else stand liable for contempt or suffer other similar censure or penalty, then the disclosure to such tribunal or governmental agency of only that Proprietary Information which
such counsel advises in writing is legally required to be disclosed, shall not constitute a breach of this Section, provided that Executive shall give the Company as much advance notice of such
disclosure as is reasonably practicable. 

        8.2  Prohibited Activity. Executive further acknowledges that such Proprietary
Information has been and will be of central importance to the businesses of the Company and its affiliates, and that disclosure of it to, or its use by, others could cause substantial loss to the
Company or its affiliates. Executive and the Company also recognize that an important part of Executive's duties has been to develop goodwill for the Company and its affiliates through his personal
contact with Clients (as defined below), employees, and others having business relationships with the Company and its affiliates, and that there is a danger that this goodwill, a proprietary asset of
the Company, may follow Executive upon the termination of his employment relationship with the Company. Executive, accordingly, agrees as follows: 

        (a)  Prohibited Activities. Executive agrees that he will not at any time during the first twenty-four
(24) months following the effective date of this Agreement: (i) directly or indirectly, whether for his own account or for the account of any other person, solicit, divert, or endeavor
to entice any Client or supplier of the Company away from the Company or its affiliates, or otherwise engage in any activity intended to terminate, disrupt, or interfere with the Company's or its
affiliates' relationship with Clients or suppliers, or otherwise adversely affect the Company's or its affiliates' relationship with Clients or suppliers or other business relationships of the Company
and/or its affiliates; (ii) other than as required in his role as a director of the Company, publish or make any statement disparaging or critical of the
Company, its affiliates and/or their respective officers, managers, supervisors, employees, investors, products, services or technology, or otherwise malign the business or reputation of any of the
foregoing entities ("Adverse Information"); provided, however, that if, after consulting with legal
counsel, Executive determines that he is legally compelled to disclose Adverse Information to any tribunal or governmental agency or else stand liable for contempt or suffer other similar censure or
penalty, then the disclosure to such tribunal or governmental agency of only that Adverse Information which such counsel advises in writing is legally required to be disclosed, shall not constitute a
breach of this Section, provided that Executive shall give the Company as much advance notice of such disclosure as is reasonably practicable; provided,  further, that nothing contained in this Section is intended to prevent Executive from testifying truthfully in any legal proceeding;
(iii) directly or through one or more intermediaries, solicit for employment or recommend to any subsequent employer of Executive the solicitation for employment of, any person who, at the time
of such solicitation, is employed by the Company or any affiliate; (iv) represent to any person or entity, directly or indirectly, that he is an employee of the Company; and (v) use
Company materials in any manner, including, but not limited to, the Company's e-mail system or letterhead. 

        "Clients"
shall mean those persons or entities that, at any time during Executive's course of employment with the Company were clients or customers of the Company or any affiliate, or
any predecessor of any of the foregoing. 

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        (b)  Non-Competition During the Severance Period. Executive acknowledges and agrees that given the extent and
nature of the confidential and proprietary information he has obtained during the course of his employment with the Company, including but not limited to trade secrets, it would be inevitable that
such confidential information would be disclosed or utilized by the Executive should he 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, during any period for which Executive is receiving payments from the Company pursuant to Section 2
above, Executive shall not, 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 or connected in any manner with, any enterprise which is engaged in any business competitive with or similar to that of the Company;
provided, however, that such restriction 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 which is not, at the time of such investment, engaged in a business competitive with the Company's business. Executive agrees that this covenant is a material inducement to
the Company for the agreement to pay the salary payments set forth in Section 2 above. 

        (c)  Remedies. Executive understands that the Company would (i) have no further obligation to pay the salary payments
set forth in Section 2 above, and (ii) seek an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by Executive, in
addition to any other remedies or damages to which the Company may be entitled at law or in equity, in the event Executive were to breach any of the terms of this Section 8. 

        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 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. 

        9.    Non-Admission Of Liability. Executive acknowledges that the
Company denies any wrongdoing whatsoever in connection with Executive, his employment, and the cessation of that employment, and that the severance payment made pursuant to this Agreement is made
solely for the purpose of amicably resolving any disputes the Parties may have arising from the employment relationship. Executive and the Company expressly understand and agree that nothing contained
in this Agreement shall constitute or be treated as an admission of any wrongdoing or liability on the part of Executive or the Company. 

        10.  No Other Payments Due. Executive understands and agrees that this Agreement is intended to and
does bar all claims Executive has or may have for injuries, losses, damages, wages, salaries, bonuses, commissions, overtime pay, vacation pay, severance pay, car allowance, benefits, costs, expenses,
attorneys' fees or any similar claims that Executive could possibly have against the Company or its affiliates, and that Executive is not entitled to receive and will not claim any right, benefit, or
compensation other than what is set forth above in this Agreement. 

        11.  Return Of Company Property. Executive agrees to return to the Company all
office keys, building access cards, company credit cards, equipment, documents and any other materials of the Company that Executive has in his possession, custody or control within five
(5) days after the date hereof. 

        12.  Ownership Of Claims. Executive represents and warrants that he is the sole and lawful owner of
all rights, title and interest in and to all released matters, claims and demands referred to herein. Executive further represents and warrants that there has been no assignment or other transfer of
any 

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interest in any such matters, claims or demands which Executive may have against the Company or any affiliate. 

        13.  Confidentiality Of Agreement. Executive understands and agrees that this Agreement, and the
matters discussed in negotiating its terms, are entirely confidential. It is therefore expressly understood and agreed by Executive that he will not reveal, discuss, publish or in any way communicate
any of the terms, amount or fact of this Agreement or the severance payment to any person, organization or other entity, except to his immediate family members and professional representatives, who
shall be informed of and bound by this confidentiality clause. 

        14.  California Law Applies. This Agreement, in all respects, shall be interpreted, enforced and
governed by and under the laws of the State of California without regard to conflicts of laws. 

        15.  Successors And Assigns. It is expressly understood and agreed by Executive that this Agreement
and all of its terms shall be binding upon Executive and the Company's respective representatives, heirs, executors, administrators, successors and assigns. 

        16.  Attorneys' Fees. In the event that any party to this Agreement asserts a
claim for breach of this Agreement or seeks to enforce its terms, the prevailing party in any such proceeding shall be entitled to recover costs and reasonable attorneys' fees. 

        17.  Headings. The headings in each section herein are for convenience of reference only and shall be
of no legal effect in the interpretation of the terms hereof. 

        18.  Integration. This Agreement constitutes a single, integrated, written
contract, expressing the entire agreement between the Parties. In this regard, Executive represents and warrants that he is not relying on any promises or representations which do not appear written
herein. Executive further understands and agrees that this Agreement can be amended or modified only by a written agreement, signed by all of the Parties hereto. 

        19.  Voluntary Agreement. Executive understands and agrees that he may be waiving significant legal
rights by signing this Agreement. Executive represents that he has been advised by legal counsel of his choice regarding this Agreement, and represents that he has entered into this Agreement
voluntarily, with a full understanding of and in agreement with all of its terms. 

        20.  Severability. Any term or provision of this Agreement that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the invalid, void or unenforceable term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is invalid, void or unenforceable, the parties agree that the court making such determination shall have the power to and
shall, subject to the discretion of such court, reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or
unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or 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. 

        THE
SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE AGREEMENT. THE SIGNATORIES HAVE CONSULTED WITH LEGAL COUNSEL OF THEIR CHOICE REGARDING THIS AGREEMENT. THE SIGNATORIES FULLY UNDERSTAND
THE FINAL AND BINDING EFFECT OF THIS AGREEMENT. THE SIGNATORIES ARE SIGNING THIS AGREEMENT VOLUNTARILY. 

        (Signatures on next page to follow.)  

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 IN WITNESS WHEREOF, the Parties hereto have executed this Severance Agreement and General Release on the dates indicated below.  

	DATED: June 6, 2002	 	 	 
	

	
 	

 	

 
	 	 	/s/  PAUL F. BEYER      
Paul F. Beyer
	

	
 	

 	

 
	DATED: June 6, 2002	 	SPECIALTY LABORATORIES, INC.
	

	
 	

 	

 
	 	 	By:	/s/  DOUGLAS S. HARRINGTON      

	 	 	Its:	CEO

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SEVERANCE AGREEMENT AND GENERAL RELEASE

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