Document:

EXHIBIT 10.1

 

CONSULTING
AGREEMENT

 

This Consulting Agreement (this “Agreement”)
is entered into as of April 8, 2005, by and between Clarient, Inc., a Delaware corporation (formerly known
as ChromaVision Medical Systems, Inc.) (the “Company”)
and Richard J. Cote, M.D., an individual (the “Consultant”).

 

R E C I
T A L S

 

WHEREAS, the Company and Consultant
entered into that certain letter agreement, dated as of June 9, 2004 (as
amended on March 30, 2005, the “Letter Agreement”), pursuant to
which Consultant serves as Vice President – Chief Medical Officer of the
Company;

 

WHEREAS, the parties desire that
the Letter Agreement terminate upon the effective date of this Agreement (the “Effective
Time”), and Consultant will become a consultant to the Company immediately
upon the Effective Time pursuant to this Agreement; and

 

WHEREAS, the parties desire to
enter into this Agreement on the terms and subject to the conditions set forth
herein.

 

IT IS HEREBY AGREED as follows:

 

1.                                       Termination of Prior Agreements.

 

(a)                                  Termination and Waiver.

 

(i)                                     Effective immediately upon the Effective
Time, Consultant hereby voluntarily agrees to resign from all positions he
holds as an employee or officer of the Company or any of its subsidiaries or
affiliates.

 

(ii)                                  Effective immediately upon the Effective
Time, except for the agreements listed on Exhibit A hereto, any and all
outstanding agreements, arrangements or understandings (whether or not in
writing) between the Company and Consultant (including without limitation the
Letter Agreement) shall terminate (the “Terminating Agreements”) and
Consultant shall waive any and all rights under the Terminating Agreements,
whether arising prior to, at or following the Effective Time, and the Company
and its subsidiaries and affiliates shall have no further obligation or
liability under such Terminating Agreements.

 

(iii)                               Effective immediately upon the Effective Time, except as otherwise
provided herein and except for compensation contemplated by any agreements set
forth on Exhibit A hereto, Consultant shall waive any and all rights to
compensation or benefits from the Company and its subsidiaries and affiliates
(including, without limitation, any and all rights under any plan, program,
agreement or arrangement (whether or not in writing), including without
limitation (A) the Company’s Management Incentive Plan, (B) the
monthly payment to the University Pathology Associates, Inc. and (C) the
Consultant’s housing arrangement (the “Terminating Plans” and together
with the Terminating Agreements, the “Terminating Arrangements”)
maintained by the Company or any of its subsidiaries or affiliates or under
which the Company or any of its subsidiaries or affiliates has any obligation
or liability), and the Company and its subsidiaries and

 

 

affiliates
shall have no further obligation or liability to Consultant with respect to any
such compensation or benefit, in each case except for: (I) any rights of
Consultant to accrued, unpaid salary from the Company at the Effective Time,
(II) any rights of Consultant to reimbursement of business expenses incurred by
Consultant prior to the Effective Time in accordance with the Company’s
Consultant reimbursement policies, (III) any rights of Consultant to accrued,
unpaid vacation and other paid-time off in accordance with applicable law, and
(IV) Consultant’s rights under this Agreement and any other agreements or plans
listed on Exhibit A (the “Continuing Arrangements”).

 

(b)                                 Consideration for
Termination and Waiver.

 

In consideration for the termination of the Terminating
Arrangements and other commitments, waivers and obligations undertaken by
Consultant hereunder and in consideration for Consultant’s delivering and not
revoking the release set forth on Exhibit B (the “Release”), the
Company shall, upon the terms and subject to the conditions set forth in this
Agreement, provide Consultant with the following on the eighth day following
delivery by Consultant to the Company of the Release provided for in Section 3
and subject to Consultant’s not having revoked the Release:

 

(i)                                     The options to purchase an aggregate of
150,000 shares of the Company’s common stock previously granted to Consultant
in October 2003 and February 2004 (the “Existing Options”)
shall continue to vest in accordance with the vesting schedule set forth
in the agreements governing such Existing Options so long as Consultant remains
in Continued Service (as defined below) (as of the Effective Time, all of the
100,000 Existing Options granted to Consultant in October 2003 have fully
vested);

 

(ii)                                  Consultant shall be entitled to receive
137,500 shares of restricted stock (constituting the entirety of the Business
Establishment Grant to which Consultant will be entitled pursuant to Schedule A
of the Letter Agreement) (the “Business Establishment Grant”) and such
Business Establishment Grant shall be evidenced by a customary restricted stock
award letter to be signed by the Company and Consultant and shall vest over
three years of Continued Service beginning March 31, 2005 in equal 1/6
increments on each 6-month anniversary of March 31, 2005;

 

(iii)                               Consultant will be entitled to receive a number of shares of restricted
stock equal to the product of (A) the dollar amount by which Clinical
Services Revenue for the twelve months ended March 31, 2005 exceeds $2.6
million multiplied by (B) .01 (one percent) (which restricted stock grant
shall be made as soon as reasonably practicable following the date that
Clinical Services Revenue for the twelve months ended March 31, 2005 is
determined by the Company but in any event on or prior to May 15, 2005)
and

 

(iv)                              Consultant will be entitled to receive a number of shares of restricted
stock equal to the product of (A) the amount (if any) by which Clinical
Services Revenue for the twelve months ended March 31, 2006 exceeds
Clinical Services Revenue for the twelve months ended March 31, 2005
multiplied by (B) .01 (one percent) (the grants of restricted stock
contemplated by clause (iii) above and this clause (iv) are referred
to herein as “Business Participation Grants” and each, a “Business
Participation Grant”) (which restricted stock grant shall be made as soon
as reasonably practicable following the date that Clinical Services Revenue for
the twelve months ended March 31, 2006 is determined by the Company but in
any event on or prior to May 15, 2006,

 

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it
being understood that no shares of restricted stock shall be granted pursuant
to this clause (iv) if Clinical Services Revenue for the twelve months
ended March 31, 2006 is less than Clinical Services Revenue for the twelve
months ended March 31, 2005); provided however that if a Change of Control
occurs prior to March 31, 2006, the Business Participation Grant
contemplated by clause (iv) shall instead equal (A) the number of
shares of restricted stock that Consultant would have received (if any)
pursuant to clause (iv) if Clinical Services Revenue for the period from March 31,
2005 through the date of the Change of Control were annualized for the twelve
month period ending March 31, 2006 multiplied by (B) a fraction, the
numerator of which is the number of days from March 31, 2005 through the
date of the Change of Control and the denominator of which is 365. For the
purposes of this Agreement, the term “Change of Control” means (a) the
issuance, sale, transfer or acquisition by the Company of shares of capital
stock of the Company (including a transfer as a result of death, disability,
operation of law, or otherwise) in a single transaction or a group of related
transactions, as a result of which any entity, person, or group (other than
Safeguard Scientifics, Inc. and/or its affiliates) acquires the beneficial
ownership of newly issued, outstanding or treasury shares of the capital stock
of the Company having 50% or more of the combined voting power of the Company’s
then outstanding securities entitled to vote for at least a majority of the
authorized number of directors of the Company or (b) any merger,
consolidation, sale of all or substantially all the assets or other comparable
transaction as a result of which all or substantially all of the assets and
business of the Company are acquired directly or indirectly by another entity
(except Safeguard Scientifics, Inc. and/or any of its affiliates). An “affiliate”
of an entity is an entity controlling, controlled by, or under common control
with the entity specified, directly or indirectly through one or more
intermediaries. “Group” shall have the same meaning as in section 13(d) of
the Securities Exchange Act of 1934, and “beneficial ownership” shall have the
meaning set forth in Rule 13d-3 of the Securities and Exchange
Commission adopted under the Securities Exchange Act of 1934.

 

(v)                                 Each Business Participation Grant shall be
evidenced by a customary restricted stock award letter to be signed by the
Company and Consultant and shall vest over three years of Continued Service
beginning March 31 of the year in which the applicable Business
Participation Grant is made (the “Business Participation Grant Vesting
Commencement Date”) in equal 1/6 increments on each 6-month
anniversary of the Business Participation Grant Vesting Commencement Date.  Notwithstanding the foregoing, no shares of
restricted stock relating to the Business Establishment Grant or applicable
Business Participation Grant shall be delivered to Consultant pursuant to
clause (ii), (iii) or (iv) above until Consultant has remitted to the
Company (by cash or check) an amount sufficient to satisfy federal, state,
local and foreign taxes (including FICA Obligations) required by law to be
withheld with respect to the issuance of such shares to Consultant.  Except as provided in Section 2(c) below,
if Consultant’s Continued Service with the Company is terminated, Consultant
shall forfeit any portion of the Business Establishment Grant and Business
Participation Grants that has not vested as of the date of termination (and,
except as provided in Section 2(c) below, in the event such
termination date occurs prior to the date that Consultant would be entitled to
receive the applicable Business Participation Grant pursuant to clause (iii) or
(iv) above, Consultant shall forfeit his right to receive such Business
Participation Grant).  For purposes of
this Agreement, “Continued Service” shall mean Consultant devoting at least
20% of his business time and attention to the Company as a consultant providing
consulting services pursuant to this Agreement (or such lesser amount of time
as is requested by the Company) at the direction of the Company, it being
understood that the Company may terminate Consultant’s Continued Service at any
time with or without Cause pursuant to Section 2(c) below.

 

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(vi)                              For the avoidance of doubt, Executive shall not be required to pay any
cash consideration for any shares issued in a Business Participation Grant or
Business Establishment Grant to which he is entitled under this Agreement.

 

2.                                       Consulting Arrangement.

 

(a)                                  Consulting Services.

 

(i)                                     Beginning at the Effective Time, the Company
hereby engages Consultant to provide services as a consultant to the Company as
contemplated by this Agreement, and Consultant hereby agrees to provide such
consulting services and to comply with the other provisions of this Agreement,
upon the terms and subject to the conditions hereinafter set forth.

 

(ii)                                  Consultant shall devote twenty-percent (20%)
of his business time (equivalent to approximately 1 (one) business day per week
and approximately 4.5 (four and one half) business days per month) to consult
with and advise the Company with respect to the Company’s business and
financial operations.  Such consulting
services shall include oversight of the Company’s clinical advisory board,
consulting with and providing advice to the Company’s medical director and staff,
assistance with investor presentations and providing general consulting
services reasonably requested by the Company relating to the Company’s
diagnostic laboratory operations. 
Consultant shall report to the Chief Executive Officer or his designee.

 

(iii)                               Consultant hereby acknowledges and agrees
that he shall not be an employee of the Company but shall function as an
independent contractor on a retainer fee basis. 
Consultant shall not have authority to act as agent of the Company
except when authority is specifically delegated to him and Consultant shall not
represent to the contrary to any persons. 
Consultant shall be solely responsible for the estimation and payment of
any federal and state income taxes and federal insurance contributions on
self-employment income which is attributable to such the fees and other
compensation paid hereunder.  Not being
in the capacity of an employee of the Company, Consultant shall not be entitled
to participate in any employee benefit plans or other benefits or conditions of
employment available to employees of the Company (although Consultant shall be
entitled to reimbursement for all reasonable Business Expenses in a manner
consistent with the Company’s travel and entertainment policy pursuant to Section 2(b)).

 

(iv)                              The parties hereby agree that the Company may make public statements with
respect to Consultant’s resignation as an employee and officer of the Company
and consulting relationship with the Company and that this Agreement may be
filed in a periodic report of the Company under the Securities Exchange Act of
1934, as amended.

 

(b)                                 Compensation.

 

(i)                                     The Company shall pay to Consultant an annual
consulting fee in the amount of $67,500 per year (the “Annual Fee”) in
accordance with the Company’s payroll practices applicable to employees of the
Company.  Consultant shall also be
entitled to reimbursement for all reasonable costs of travel, entertainment,
meals, lodging and related expenses incurred in connection with providing
services under this Agreement in a manner consistent with the Company’s travel
and entertainment policy (“Business Expenses”).

 

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(ii)                                  Subject to Consultant remaining in Continued
Service, on March 31, 2007 (with respect to the twelve month period ending
March 31, 2007), and on each subsequent anniversary of March 31, 2007
(with respect to the applicable twelve month period prior to such date) (a) the
Company shall grant to Consultant options to purchase an aggregate of 50,000
shares of the Company’s Common Stock and (b) in the sole determination and
discretion of the compensation committee of the Board of Directors of the
Company and subject to achieving objectives established by the compensation
committee, the Company may grant to Consultant options to purchase an
additional 50,000 shares of the Company’s Common Stock (for a maximum annual
grant of stock options to purchase an aggregate of 100,000 shares pursuant to
this clause (ii)) (any such options, the “New Options”), in each case
upon the terms and conditions set forth in the Company’s customary form of
option agreement to be executed by and between the Company and Consultant.  Subject to Consultant remaining in Continued
Service, one third (1/3) of the New Options granted pursuant to an option grant
under this clause (ii) shall vest on the first anniversary of the
date of grant, and the remaining New Options relating to such grant shall vest
in equal monthly installments of 1/36th each beginning with the thirteenth
month after the date of grant and ending on the thirty sixth month after the
date of grant (such that all such New Options relating to such grant would be
vested on the 36th month after the date of grant).

 

(c)                                  Termination.

 

(i)                                     Consultant’s
consulting relationship with the Company and Continued Service may be
terminated at any time by the Company with or without Cause, which termination
shall be effective upon notice to Consultant; provided that if the Company
terminates Consultant’s Continued Service without Cause (as defined below),
Consultant shall be entitled to the compensation described in clause (iii) of
this Section 2(c) subject to the terms and conditions thereof.  In addition, Consultant may terminate his
consulting relationship and Continued Service with the Company at any time with
or without Cause.  Except as provided in
clauses (ii), (iii) and (iv) below, if Consultant’s Continued Service
is terminated for any reason, Consultant shall not be entitled to further
compensation under this Agreement (other than any accrued but unpaid portion of
the Annual Fee through the date of termination) and no additional Existing
Options, New Options or shares covered by the Business Establishment Grant or
the Business Participation Grants shall vest following the date of termination (and
any unvested options and any unvested shares covered by the Business
Establishment Grant or any Business Participation Grant shall be forfeited).

 

(ii)                                  In the
event Consultant’s Continued Service is terminated as a result of Consultant’s
death or total and permanent disability, Consultant, or Consultant’s legal
representative, in the case of Consultant’s death, shall be entitled to receive
the Annual Fee due to Consultant pursuant to Section 2(b) through the
last day of the calendar month in which his death or total and permanent
disability shall have occurred and any Existing Options or New Options that
have vested and become exercisable prior to the date of termination of
Continued Service shall be exercisable until the earlier of (A) the first
anniversary of the date of termination or (B) the expiration date of the
applicable option.  In the event
Consultant’s Continued Service is terminated as a result of Consultant’s death
or total and permanent disability, the Business Establishment Grant and the Business
Participation Grants shall become fully vested (or, if the amount of any
Business Participation Grant has not been determined as of the date of
termination, shares covered by such Business Participation Grant shall be fully
vested on the date of grant after the amount of such Business Participation
Grant is determined).

 

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(iii)                               Subject to the provisions of this clause
(iii), in the event the Company terminates Consultant’s Continued Service
without Cause, (a) Consultant shall be entitled to receive an
aggregate amount equal to the Annual Fee which shall be payable over the twelve
month period following the date of termination (the “Severance Period”)
in accordance with the Company’s payroll practices (as well as any accrued but
unpaid portion of the Annual Fee through the date of termination), (b) the
Business Establishment Grant and the Business Participation Grants shall become
fully vested (or, if the amount of any Business Participation Grant has not
been determined as of the date of termination, shares covered by such Business
Participation Grant shall be fully vested on the date of grant after the amount
of such Business Participation Grant is determined) and (c) any Existing
Options and any New Options that have vested prior to the date of termination
shall remain exercisable until the earlier of (A) the first anniversary of
the date of termination and (B) the expiration date of the applicable
option (it being understood that any Existing Option and New Options that have
not vested as of the date of termination shall thereafter not be or become
exercisable).  Notwithstanding the
foregoing, Consultant’s right to receive the compensation and benefits
described in this clause (iii) (and the acceleration of the vesting
schedules contemplated by this clause (iii)) shall be contingent upon
Consultant’s execution of a release of all claims against the Company
substantially in the form of Exhibit C and expiration of the seven-day
revocation period referred to in the release. 
In addition, notwithstanding the foregoing, in the event
the Consultant engages in Competition (as defined below) with the Company
during his Continued Service or the Severance Period or if (z) Consultant
engages in any Solicitation (as defined below) during his Continued Service or
the Severance Period, then Consultant shall forfeit (1) his right to
receive the payment contemplated by subsection (a) of this clause
(iii), (2) his right to receive any Business Participation Grant that has
not yet been made and (iii) his right to exercise any Existing Options or
New Options that have not yet been exercised for the extended period
contemplated by subsection (c) of this clause (iii). In addition, notwithstanding subsection (a) of
this clause (iii), the Company shall not be obligated to make any payments to
Consultant pursuant to subsection (a) of this clause (iii) (other
than any accrued and unpaid Annual Fee) if the termination of Consultant’s
Continued Service occurs subsequent to March 31, 2009 and, if the
termination of Consultant’s Continued Service occurs subsequent to March 31,
2008 but prior to March 31, 2009, then Consultant shall only be entitled
to receive a pro rata portion of the Annual Fee through and including March 31,
2009 (i.e. if Consultant were terminated without Cause on December 31,
2008, Consultant would be entitled to receive an aggregate of 75% of the Annual
Fee payable over the period from December 31, 2008 through March 31,
2009 in accordance with the Company’s payroll practices).

 

(iv)                              In the
event of a Change of Control, all shares of restricted stock
covered by the Business Establishment Grant and the Business Participation
Grants (or applicable portion thereof if a Change of Control occurs prior to March 31,
2006) will become immediately vested in full.

 

(v)                                 For purposes of this Agreement, “Cause” means
(a) Consultant’s failure to adhere to any written policy of the Company if
Consultant has been given a reasonable opportunity to comply with such policy
and cure Consultant’s failure to comply (which reasonable opportunity to cure
must be granted for a period of ten days); (b) Consultant’s appropriation
(or attempted appropriation) of a business opportunity of the Company,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Company; 

 

8

 

(c) Consultant’s misappropriation
(or attempted misappropriation) of any of the Company’s funds or property (including
without limitation trade secrets and other intellectual property); (d) Consultant’s
actual (as opposed to merely asserted) breach or default under any other
agreements or obligations provided for in previous employment agreements
including provisions related to obligations of confidentiality,
non-competition, non-solicitation or use of information; (e) actual (as
opposed to merely asserted) legal prohibitions on Consultant’s ability to
provide services to the Company contemplated by this Agreement arising from
Consultant’s fiduciary or other duties or obligations to Consultant’s most
recent employer (prior to Consultant’s becoming a consultant to the Company in
2003); (f) Consultant’s conviction of, or Consultant’s entering of a
guilty plea or plea of no contest with respect to, a felony or the equivalent
thereof; (g) Consultant’s breach or default of any confidentiality,
non-competition, non-solicitation, or use of information obligation or
agreement between the Company and Consultant or Consultant’s engaging in any
act of Competition or Solicitation; or (h) Consultant’s failure to provide
at least 20% of his business time and attention to the Company as a consultant
or employee if requested by the Company.

 

(vi)                              For purposes of this Agreement, Consultant shall be
deemed to have engaged in “Competition” with the Company if, without
prior written approval of the Board of Directors of the Company, Consultant
directly or indirectly through any other person, firm or corporation, whether
individually or in conjunction with any other person, or as an employee, agent,
consultant, representative, partner or holder of any interest in any other
person, firm, corporation or other association during his Continued Service,
competes with, or encourages or assists others to compete with, or solicit
orders or otherwise participates in business transactions or provides services
in competition with, the business engaged in by the Company at any time during
the term of such Continued Service (unless such business shall have been
abandoned by the Company.) Consultant acknowledges that the Company’s products
are marketed throughout the United States, that therefore the Company is
engaged in business in every county and state of the United States and that the
foregoing definition of Competition includes competition in every county and
state of the United States as well as in foreign countries.

 

(vii)                           For purposes of this Agreement, “Solicitation”
shall mean (a) soliciting, enticing, or inducing any Customer (as defined
below) to become a client, customer, OEM, distributor, or reseller of any other
person, firm or corporation with respect to, or provide, products or services
which are competitive with products or services then sold or under development
by the Company or to cease doing business with the Company or authorizing or
knowingly approving the taking of such actions by any other person or (b) soliciting,
enticing, or inducing directly or indirectly, or hiring any person who
presently is or at any time during the term hereof shall be an employee of the
Company to become employed by any other person, firm or corporation or to leave
his or her employment with the Company or authorizing or approving any such
action by any other person or entity. Providing a reference for an employee of
the Company will not, however, constitute Solicitation if the employee has
decided to leave the employ of the Company, is seeking other employment, and
requests the reference.

 

(viii)                        For purposes of this Agreement, “Customer”
means any person or entity which at the time of determination, if made prior to
termination of Continued Service, or, after termination of Continued Service,
at the time of such termination, shall be, or shall have been within two years
prior to such time, a client, customer, OEM, distributor, or reseller of the
Company or a bona fide prospect to become any of the foregoing.

 

9

 

(ix)                                Competition shall not include investing in the
securities of any corporation having securities listed on a national securities
exchange, the Nasdaq National Market, or the Nasdaq SmallCap Market, provided
that such investment does not exceed 5% of any class of securities of any
corporation engaged in business in competition with the Company, and provided
that such ownership represents a passive investment and that neither Consultant
nor any group of persons including him, in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees
any of its financial obligations, otherwise takes any part in its business,
other than exercising his rights as a shareholder, or seeks to do any of the
foregoing.

 

3.                                       The Release.

 

(a)                                  Consultant agrees that concurrently with the
execution of this Agreement, Consultant shall execute and deliver the Release
to the Company.

 

(b)                                 Consultant acknowledges and agrees that this
Agreement includes the entire agreement and understanding between the parties
with respect to Consultant’s employment, the termination thereof, Consultant’s
consulting relationship with the Company and all amounts to which Consultant
shall be entitled upon the termination of Consultant’s employment with the
Company.  Consultant also acknowledges
and agrees that Consultant’s right to receive payments and benefits under this
Agreement is contingent upon Consultant’s compliance with the covenants set
forth in this Agreement and Consultant’s execution and acceptance of the terms
and conditions of, and the effectiveness of the Release.  If Consultant fails to comply with the
covenants set forth in this Agreement or if Consultant fails to execute the
Release or revokes the Release, then Consultant shall not be entitled to any
payments or benefits under this Agreement.

 

(c)                                  Consultant represents that he has not, either
individually or as a representative or member of a class, filed or caused to be
filed any complaints, charges or lawsuits against the Company (as such term is
used in the Release) with any governmental agency, court, arbitrator or
mediator, and agrees not to initiate, assist, encourage or participate in,
either individually or as a representative or member of a class, any such
actions unless compelled to do so by subpoena or court order.

 

(d)                                 Consultant acknowledges that he has been
advised by the Company to consult an attorney before signing this Agreement and
that he has been given up to twenty-one (21) days to review this Agreement and
the Release and to consult legal counsel. 
Consultant may revoke the Release up to seven (7) days after
signing it and delivering it to the Company. 
The Release shall automatically become effective, enforceable and
irrevocable upon the expiration of that seven-day revocation period, if not
timely revoked by Consultant.

 

4.                                       Miscellaneous Provisions.

 

(a)                                  Nothing contained in this Agreement shall be
construed in any way as an admission by the Company or by Consultant that it
has acted wrongfully with respect to the other or with respect to any other
person, and each party specifically disclaims any liability to, or wrongful
acts against, the other or any other person, on the part of themselves or their
representatives, partners, associates, employees or agents.

 

10

 

(b)                                 This Agreement will bind and inure to the benefit of
Consultant and the Company and their respective heirs, executors,
administrators, successors, and assigns.

 

(c)                                  This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
principles of conflict of laws.  The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.  This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

 

(d)                                 All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

If to Consultant:  at Consultant’s most recent address on the
records of the Company,

 

If to the Company:

 

Clarient, Inc.

33171 Paseo Cerveza

San Juan Capistrano, CA
92675

Attn: Steve Dixon

 

or to such other address as either party shall
have furnished to the other in writing in accordance herewith.  Notice and
communications shall be effective when actually received by the addressee.

 

(e)                                  The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

 

(f)                                    This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements with respect thereto.

 

(g)                                 This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the date first above written. 

 

 

	
  /s/ Richard J. Cote M.D.

  	
   

  	
   

  
	
  Richard J. Cote, M.D.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CLARIENT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ,

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephen T.D. Dixon

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Stephen T.D. Dixon

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Executive Vice President &
  Chief Financial Officer

  	
   

  	
   

  
								

 

12

 

EXHIBIT A

 

SURVIVING
ARRANGEMENTS

 

Consulting Agreement, dated as of April 8, 2005

 

Non-Disclosure and Invention Assignment Agreement, dated as of June 30,
2004

 

Stock Option Grant Certificate Agreement, dated as of October 1,
2003

 

Stock Option Grant Certificate Agreement, dated as of February 1,
2004

 

13

 

EXHIBIT B

 

GENERAL RELEASE AND AGREEMENT

 

This GENERAL RELEASE AND AGREEMENT (hereinafter the “Release”)
is made and entered into as of this 8th day of April, 2005, by and
between CLARIENT, INC. (the “Company”)
and Richard J. Cote, M.D. (“Employee”).

 

1.               Background. The parties hereto acknowledge
that this Release is being entered into pursuant to the terms of the Letter
Agreement, dated June 9, 2004 (as amended March 30, 2005 the “Letter
Agreement”), between the Company and Employee. As used in this Release, any
reference to the Company shall include its predecessors and successors and, in
their capacities as such, all of its present, past, and future directors,
officers, employees, attorneys, insurers, agents and assigns, as well as all
Company affiliates, subdivisions, subsidiaries and parents, including without
limitation Safeguard Scientifics, Inc. and its subsidiaries (collectively,
the “Company Affiliates”) and their respective past, present and future
directors, officers, employees, consultants, attorneys, insurers, agents and
assigns; and any reference to Employee shall include, in their capacities as
such, his attorneys, heirs, administrators, representatives, agents, and
assigns.

 

2.               Resignation from Boards. Employee shall, and
hereby does resign from such Boards and officer positions with the Company and
all affiliates and partner companies of the Company as such employee holds on
the date hereof. In this regard, if requested, Employee agrees to pre-sign and
deliver to the Company resignation letters acceptable to the Company in order
to effect Employee’s resignation from certain companies and entities, and we
may submit other such letters from time to time, although nothing contained
herein shall prohibit Employee from resigning from such boards and officer
positions at an earlier time.

 

3.               General Release.

 

(a) Employee, for and in consideration of the
Company’s execution of the Consulting Agreement of even date herein (the “Consulting
Agreement”) and intending to be legally bound, does hereby REMISE, RELEASE AND
FOREVER DISCHARGE the Company and the Company Affiliates, of and from any and
all causes of actions, suits, debts, claims, and demands whatsoever in law or
in equity, which he/she ever had, now has, or hereafter may have or which his
or her heirs, executors or administrators may have, by reason of any matter,
cause, or thing whatsoever, from the beginning of his or her employment or
consulting relationship with the Company and/or the Company Affiliates to the
date of this Release, and particularly, but without limitation, any claims
arising from or relating in any way to his or her employment or the separation
of his or her employment relationship with the Company, including, but not
limited to, any claims arising under any federal, state, or local laws,
including Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e
et seq., (“Title VII”), the Age Discrimination in Employment Act, 29 U.S.C. Section 621
et seq. (“the ADEA”), the Americans with Disabilities Act, 42 U.S.C. Section 12101
et seq. (“ADA”), the Employee Retirement Income Security Act of 1974, 29 U.S.C.
Section 301, et seq., as amended (“ERISA”), and any and all other federal,
state or  local laws, and any common law
claims now or hereafter recognized, including claims for wrongful discharge,
slander and defamation, as well as all claims for counsel fees and costs.

 

14

 

(b) By signing this Release, Employee
represents that Employee has not commenced any proceeding against the Company
or any Company Affiliate in any forum (administrative or judicial) concerning
Employee’s employment.

 

(c) Employee agrees and covenants not to sue or
to bring, or assign to any third person, any claims or charges against the
Company or any Company Affiliate with respect to any known matter arising
before the date of this Release or covered by the release and not to assert
against the Company or any Company Affiliate in any action, grievance, suit,
litigation or proceeding any known matter before the date of this Release or
covered by the release. Employee agrees that in the event of a breach of any
covenant of this Release by Employee, the Company or any Company Affiliate
damaged as a result of such breach shall be entitled to recover attorneys’ fees
and costs in an action relating to such breach, in addition to compensatory
damages.

 

(d) Anything herein to the contrary
notwithstanding, neither party is released from any of his, her or its
obligations under this Release, the Consulting Agreement or any of the
Continuing Arrangements (as defined in the Consulting Agreement), and each
party confirms that such obligations are the only obligations of the Company or
its affiliates not covered by this release in connection with the cessation of
Employee’s service with the Company.

 

(e) Employee acknowledges that this Release
extends to all causes of action, suits, debts, claims and demands referred to
in (a) above, known or unknown, suspected or unsuspected. By signing this
Release, Employee expressly waives all rights under Section 1542 of the
California Civil Code, which reads in full 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.”

 

(f) By signing this Release and the Consulting
Agreement and by making the payments and providing the benefits contemplated by
the Consulting Agreement, the Company does not admit any liability, wrongdoing
or fault and expressly denies any such liability, wrongdoing or fault.

 

4.               Confidentiality; Non-Disparagement.

 

(a) Except to the extent required by law,
including SEC disclosure requirements, the Employee agrees that the terms of
this Release will be kept confidential by Employee, except that Employee may
advise his or her family and confidential advisors.

 

(b) Employee will not at any time knowingly
reveal to any person or entity any of the trade secrets or confidential
information of the Company or the Company Affiliates or of any third party
which the Company is under an obligation to keep confidential (including, but
not limited to, trade secrets or confidential information respecting
inventions, products, designs, methods, know-how, techniques, systems,
processes, software programs, works of authorship, customer lists, projects,
plans, and proposals), and Employee shall keep secret all confidential matters
relating to the

 

15

 

Company
or the Company Affiliates and shall not use or attempt to use any such
confidential information in any manner which injures or causes loss or may
reasonably be calculated to injure or cause loss whether directly or indirectly
to the Company or the Company Affiliates. These restrictions contained in this
sub-paragraph (b) shall not apply to: (i) information that at the
time of disclosure is in the public domain through no fault of Employee; (ii) information
received from a third party outside of the Company that was disclosed without a
breach of any confidentiality obligation; (iii) information approved for
release by written authorization of the Company or the Company Affiliate; or, (iv) information
that may be required by law or an order of the court, agency or proceeding to
be disclosed; provided, Employee shall provide the Company notice of any such
required disclosure once Employee has knowledge of it and will help the Company
at the Company’s expense to the extent reasonable to obtain an appropriate
protective order.

 

(c) Employee represents that Employee has not
taken, used or knowingly permitted to be used any notes, memorandum, reports,
lists, records, drawings, sketches, specifications, software programs, data,
documentation, or other materials of any nature relating to any matter within
the scope of the business of the Company, the Company Affiliates, or their
partner companies or concerning any of its dealings or affairs otherwise than
for the benefit of the Company or the Company Affiliates. Employee shall not,
after his or her termination of employment, use or knowingly permit to be used
any such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation, or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of the Company, the Company Affiliate or client of the same,
as the case may be, and that immediately upon the effectiveness of Employee’s
resignation from employment, Employee shall deliver all of the foregoing, and
all copies thereof, to the Company at its main office.

 

(d) In accordance with normal ethical and
professional standards, the Company and Employee agree that they shall not in
any way engage in any conduct or make any statement that would defame or
disparage the other, or make to, or solicit for, the media or others, any
comments, statements (whether written or oral), and the like that may be
considered to be derogatory or detrimental to the good name or business
reputation of either party. It is understood and agreed that the Company’s
obligation under this paragraph extends only to the conduct of the Company’s
senior officers. The only exception to the foregoing shall be in those
circumstances in which Employee or the Company is obligated to provide
information in response to an investigation by a duly authorized governmental
entity or in connection with legal proceedings.

 

5.               Indemnity.

 

(a) This Release shall not release the Company
or any of its insurance carriers from any obligation it or they might otherwise
have to defend and/or indemnify Employee and hold him/her harmless from any
claims made against him/her arising out of his/her activities as director or
officer of the Company, to the same extent as the Company or its insurance
carriers are or may be obligated to defend and/or indemnify and hold harmless
any other director or officer and the Company affirms its obligation to provide
indemnification to Employee as a director, officer, former director, or former
officer of the Company, as set forth in the Company’s bylaws and charter
documents in effect on the date of the Letter Agreement.

 

16

 

(b) Employee agrees that Employee will
personally provide reasonable assistance and cooperation to the Company, at the
Company’s expense, in activities related to the prosecution or defense of any
pending or future lawsuits or claims involving the Company.

 

6.               General.

 

(a) Employee understands that this Release is
revocable by Employee for a period of seven (7) days following execution
of the Release. This Release shall not become effective or enforceable until
this seven (7) day revocation period has ended.

 

(b) Employee has carefully read and fully
understands all the provisions of the Notice and the Release which sets forth
the entire agreement between Employee and the Company, and Employee
acknowledges that Employee has not relied upon any representation or statement,
written or oral, not set forth in this document.

 

(c) Employee agrees that any breach of this
Release or corresponding Letter Agreement by Employee will cause irreparable
damage to the Company and that in the event of such breach the Company shall
have, in addition to any and all remedies of law, the right to an injunction,
specific performance or other equitable relief to prevent the violation of the
obligations hereunder.

 

(d) No term or condition set forth in this
Release may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by Employee and a duly
authorized officer of the Company.

 

(e) Any waiver by the Company of a breach of
any provision of this Release shall not operate or be construed as a waiver of
any subsequent breach of such provision or any other provision hereof.

 

[Signature Page Follows]

 

17

 

IN WITNESS WHEREOF, the parties have executed this
Release as of the date written above.

 

 

	
   

  	
   

  	
   

  	
   

  	
    /s/ Richard J. Cote M.D.

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  NAME:

  	
  Richard J. Cote M.D.

  	
   

  
	
   

  	
   

  	
   

  	
  CLARIENT, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
    /s/ Stephen T.D. Dixon

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Stephen T. D. Dixon

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
								

 

18

 

EXHIBIT C

 

[FORM OF RELEASE]

 

GENERAL RELEASE AND AGREEMENT

 

This GENERAL RELEASE AND AGREEMENT (hereinafter the “Release”)
is made and entered into as of  8th this
day of April, 2005, by and between CLARIENT, INC. (the “Company”) and Richard J. Cote, M.D. (“Consultant”).

 

1.               Background. The parties hereto acknowledge
that this Release is being entered into pursuant to the terms of the Consulting
Agreement, dated April 8, 2005 (the “Consulting Agreement”), between the
Company and Consultant. As used in this Release, any reference to the Company
shall include its predecessors and successors and, in their capacities as such,
all of its present, past, and future directors, officers, employees, attorneys,
insurers, agents and assigns, as well as all Company affiliates, subdivisions,
subsidiaries and parents, including without limitation Safeguard Scientifics, Inc.
and its subsidiaries (collectively, the “Company Affiliates”) and their
respective past, present and future directors, officers, employees,
consultants, attorneys, insurers, agents and assigns; and any reference to
Consultant shall include, in their capacities as such, his attorneys, heirs,
administrators, representatives, agents, and assigns.

 

2.               Resignation from Boards. Consultant shall,
and hereby does resign from such Boards and officer positions with the Company
and all affiliates and partner companies of the Company as Consultant holds on
the date hereof. In this regard, if requested, Consultant agrees to pre-sign
and deliver to the Company resignation letters acceptable to the Company in
order to effect Consultant’s resignation from certain companies and entities,
and we may submit other such letters from time to time, although nothing
contained herein shall prohibit Consultant from resigning from such boards and
officer positions at an earlier time.

 

3.               General Release.

 

(a) Consultant, for and in consideration of the
special transition services and corresponding separation payments and other
benefits offered to him by the Company specified in the Consulting Agreement
that accompanies this Release and intending to be legally bound, does hereby
REMISE, RELEASE AND FOREVER DISCHARGE the Company and the Company Affiliates,
of and from any and all causes of actions, suits, debts, claims, and demands
whatsoever in law or in equity, which he/she ever had, now has, or hereafter may
have or which his or her heirs, executors or administrators may have, by reason
of any matter, cause, or thing whatsoever, from the beginning of his or her
employment or consulting relationship with the Company and/or the Company
Affiliates to the date of this Release, and particularly, but without
limitation, any claims arising from or relating in any way to his or her
consulting or the separation of his or her consulting relationship with the
Company, including, but not limited to, any claims arising under any federal,
state, or local laws, including Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e et seq., (“Title VII”), the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq. (“the ADEA”),
the Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq. (“ADA”),
the Consultant Retirement Income Security Act of 1974, 29 U.S.C. Section 301,
et seq., as amended (“ERISA”), and any and all other federal, state or  local laws, and any common law claims now or
hereafter recognized, including claims for wrongful discharge, slander and
defamation, as well as all claims for counsel fees and costs.

 

19

 

(b) By signing this Release, Consultant
represents that Consultant has not commenced any proceeding against the Company
or any Company Affiliate in any forum (administrative or judicial) concerning
Consultant’s engagement.

 

(c) Consultant agrees and covenants not to sue
or to bring, or assign to any third person, any claims or charges against the
Company or any Company Affiliate with respect to any known matter arising
before the date of this Release or covered by the release and not to assert
against the Company or any Company Affiliate in any action, grievance, suit,
litigation or proceeding any known matter before the date of this Release or
covered by the release. Consultant agrees that in the event of a breach of any
covenant of this Release by Consultant, the Company or any Company Affiliate
damaged as a result of such breach shall be entitled to recover attorneys’ fees
and costs in an action relating to such breach, in addition to compensatory
damages.

 

(d) Anything herein to the contrary
notwithstanding, neither party is released from any of his, her or its
obligations under this Release or under provisions of the Consulting Agreement
or any of the Continuing Arrangements that are intended to survive the
termination of the Consultant’s engagement, and each party confirms that such
obligations are the only obligations of the Company or its affiliates not
covered by this release in connection with the cessation of Consultant’s
service with the Company.

 

(e) Consultant acknowledges that this Release
extends to all causes of action, suits, debts, claims and demands referred to
in (a) above, known or unknown, suspected or unsuspected. By signing this
Release, Consultant expressly waives all rights under Section 1542 of the
California Civil Code, which reads in full 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.”

 

(f) By signing this Release and the Consulting
Agreement and by making the payments and providing the benefits contemplated by
the Consulting Agreement, the Company does not admit any liability, wrongdoing
or fault and expressly denies any such liability, wrongdoing or fault.

 

4.               Confidentiality; Non-Disparagement.

 

(a) Except to the extent required by law,
including SEC disclosure requirements, the Consultant agrees that the terms of
this Release will be kept confidential by Consultant, except that Consultant
may advise his or her family and confidential advisors.

 

(b) Consultant will not at any time knowingly
reveal to any person or entity any of the trade secrets or confidential
information of the Company or the Company Affiliates or of any third party

 

20

 

which
the Company is under an obligation to keep confidential (including, but not
limited to, trade secrets or confidential information respecting inventions,
products, designs, methods, know-how, techniques, systems, processes, software
programs, works of authorship, customer lists, projects, plans, and proposals),
and Consultant shall keep secret all confidential matters relating to the
Company or the Company Affiliates and shall not use or attempt to use any such
confidential information in any manner which injures or causes loss or may
reasonably be calculated to injure or cause loss whether directly or indirectly
to the Company or the Company Affiliates. These restrictions contained in this
sub-paragraph (b) shall not apply to: (i) information that at the
time of disclosure is in the public domain through no fault of Consultant; (ii) information
received from a third party outside of the Company that was disclosed without a
breach of any confidentiality obligation; (iii) information approved for
release by written authorization of the Company or the Company Affiliate; or, (iv) information
that may be required by law or an order of the court, agency or proceeding to
be disclosed; provided, Consultant shall provide the Company notice of any such
required disclosure once Consultant has knowledge of it and will help the
Company at the Company’s expense to the extent reasonable to obtain an
appropriate protective order.

 

(c) Consultant represents that Consultant has
not taken, used or knowingly permitted to be used any notes, memorandum,
reports, lists, records, drawings, sketches, specifications, software programs,
data, documentation, or other materials of any nature relating to any matter
within the scope of the business of the Company, the Company Affiliates, or
their partner companies or concerning any of its dealings or affairs otherwise
than for the benefit of the Company or the Company Affiliates. Consultant shall
not, after his or her termination of engagement, use or knowingly permit to be
used any such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation, or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of the Company, the Company Affiliate or client of the same,
as the case may be, and that immediately upon the effectiveness of Consultant’s
resignation from Consultant’s engagement, Consultant shall deliver all of the
foregoing, and all copies thereof, to the Company at its main office.

 

(d) In accordance with normal ethical and
professional standards, the Company and Consultant agree that they shall not in
any way engage in any conduct or make any statement that would defame or
disparage the other, or make to, or solicit for, the media or others, any
comments, statements (whether written or oral), and the like that may be
considered to be derogatory or detrimental to the good name or business
reputation of either party. It is understood and agreed that the Company’s
obligation under this paragraph extends only to the conduct of the Company’s
senior officers. The only exception to the foregoing shall be in those
circumstances in which Consultant or the Company is obligated to provide
information in response to an investigation by a duly authorized governmental
entity or in connection with legal proceedings.

 

5.               Indemnity.

 

(a) This Release shall not release the Company
or any of its insurance carriers from any obligation it or they might otherwise
have to defend and/or indemnify Consultant and hold him/her harmless from any
claims made against him/her arising out of his/her activities as director or
officer of the Company, to the same extent as the Company or its insurance
carriers are or may be obligated to defend and/or indemnify and hold harmless any
other director or officer and the Company affirms its obligation to provide
indemnification to Consultant as a director, officer, former director, or
former officer of the Company, as set forth in the Company’s bylaws and charter
documents in effect on the date of the Consulting Agreement.

 

21

 

(b) Consultant agrees that Consultant will
personally provide reasonable assistance and cooperation to the Company, at the
Company’s expense, in activities related to the prosecution or defense of any
pending or future lawsuits or claims involving the Company.

 

6.               General.

 

(a) Consultant understands that this Release is
revocable by Consultant for a period of seven (7) days following execution
of the Release. This Release shall not become effective or enforceable until
this seven (7) day revocation period has ended.

 

(b) Consultant has carefully read and fully
understands all the provisions of the Notice and the Release which sets forth
the entire agreement between Consultant and the Company, and Consultant
acknowledges that Consultant has not relied upon any representation or
statement, written or oral, not set forth in this document.

 

(c) Consultant agrees that any breach of this
Release or corresponding Consulting Agreement by Consultant will cause
irreparable damage to the Company and that in the event of such breach the
Company shall have, in addition to any and all remedies of law, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of the obligations hereunder.

 

(d) No term or condition set forth in this
Release may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by Consultant and a duly
authorized officer of the Company.

 

(e) Any waiver by the Company of a breach of
any provision of this Release shall not operate or be construed as a waiver of
any subsequent breach of such provision or any other provision hereof.

 

IN WITNESS WHEREOF, the parties have executed this
Release as of the date written above.

 

 

	
  Dated:

  	
   

  	
   

  	
  NAME:

  	
  CLARIENT, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Stephen T. D. Dixon

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President
  and

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  	
   

  
								

 

22Exhibit 10.18

 

	
  Lee Bell

  	
   

  	
  March 16, 2004

  

 

Re: Employment
Agreement

 

Dear Lee

 

This is to set forth the principal terms of
an employment relationship between you and Geophysical Development Corporation
(the “Company”).  Please review the
following and, if acceptable, please indicate your acceptance in the place
marked below.

 

1.               Your position will
be President of Geophysical Development Corporation (GDC), a wholly owned
subsidiary of Geokinetics, Inc.  You will
devote substantially all of your business time and attention and best efforts
to the affairs of GDC.  You will start
employment on April 1, 2004.

 

2.               You will be paid an
annual salary at a rate of $190,000 plus reimbursement of business expenses
against proper vouchers in accordance with Company policy.  Your salary will be reviewed annually.  You will receive a $10,000 signing bonus.

 

3.               You will be granted
options to purchase common stock of Geokinetics Inc. at a purchase price per
share equal to the fair market value of such stock as determined by the Board
on the date of award.  Your grant will
represent an option to purchase 350,000 shares of Geokinetics Inc. common
stock.  Vesting will take place over
three years in three equal installments. 
The first installment shall vest one year from the date of award, the
second installment twenty-four months from the date of award and the final
installment thirty-six months from the date of award.  The term of theses options shall be for a
ten-year period from the date of award.

 

4.               In addition to your
salary, you will be eligible to participate in an executive incentive program
where you could earn additional sums as a bonus based upon the annual
performance of Geokinetics in relation to its cash flow.  Cash flow would be earnings before
depreciation, interest and taxes, less capex budget overages not previously
approved by the Board of Directors (“EBITDA” less Capex overages).  An annual bonus pool will be established for
Executives and key employees consisting of 5% of the difference of EBITDA less
CAPEX overages (“Bonus Pool”).  If
earnings from operations are negative, no bonus will payable.  The allocation of this pool among the
Executives and key employees would be determined by the Board of Directors and
would be paid within 90 days after the end of the bonus earning year.  The maximum award you can receive is two
times your annual base salary.  For the
2004 award year, paid in 2005, you will receive no less than $20,000 bonus.

 

5.               Should the Company
sever your employment for any reason, other than for cause, you would be
entitled to receive as compensation a sum equal to 1 times the sum of your
annual salary and most recent bonus, and the Company will pay for your medical
insurance coverage at your then existing level for a period of 1 year.

 

6.               After 3 months
employment and in the event there is a change of control which results in a
material negative change in your job scope or remuneration package, and in the
absence of termination for cause, you will have the right to terminate your
employment and receive a severance package equal to 1.5 times your base
salary.  If you terminate under this
change of control clause, there will be no non-compete restrictions.

 

 

7.               You will agree not
to compete in the seismic service industry during your employment and for a
period of two years after termination if you voluntarily leave the
company.  If you are terminated at the
company’s initiation, this non-compete requirement will no longer be in
force.  The non-compete would be
restricted to the areas where the Company is operating at the time of your
termination.  You will agree to execute
Company non-disclosure and confidentiality agreements with respect to
disclosure of Company proprietary or confidential information.

 

8.               You will be
entitled to the same employment benefits accorded to executives of the Company
generally, including a monthly car allowance of $400.  You will be entitled to 4 weeks of paid
vacation, prorated over an annual employment year if less than twelve months.  The company will pay you $700 per month for
your medical insurance needs and will not provide other medical insurance for
you under the company’s policy.

 

9.               The term of this
agreement shall for a period of three years effective from your date of hire.

 

I look forward to continuing to profitably
grow our business together.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ David A. Johnson

  	
   

  
	
   

  	
   

  
	
   

  	
  David A. Johnson

  
	
   

  	
  President & CEO, Geokinetics

  
	
   

  
	
  Agreed and accepted

  
	
  24 day of March, 2004

  
	
   

  
	
  /s/ Lee Bell

  	
   

  
	
  Lee Bell

  
				

 

2

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