Document:

Exhibit 10.3

 

CARLISLE COMPANIES INCORPORATED

RESTRICTED SHARE AGREEMENT

[NONEMPLOYEE DIRECTORS]

This
Agreement (the “Agreement”) is made as of                               
(the “Date of Grant”) by and between Carlisle Companies Incorporated (the “Company”)
and                              
 (the “Grantee”).

1.             Grant of
Restricted Shares.  Subject to
and upon the terms, conditions and restrictions set forth in this Agreement and
in the Company’s Nonemployee Director Equity Plan (the “Plan”), the Company hereby
grants to the Grantee as of the Date of Grant        
Common Shares as Restricted Shares (the “Restricted Shares”).  The Restricted Shares shall be fully paid and
nonassessable and shall be represented by a certificate or certificates
registered in the Grantee’s name, endorsed with an appropriate legend referring
to the restrictions hereinafter set forth.

2.             Restrictions
on Transfer of Restricted Shares. 
The Restricted Shares may not be sold, exchanged, assigned, transferred,
pledged, encumbered or otherwise disposed of by the Grantee, except to the
Company, until the Restricted Shares have become nonforfeitable as provided in
Section 3 hereof; provided, however, that the Grantee’s rights
with respect to such Common Shares may be transferred by will or pursuant to
the laws of descent and distribution. 
Any purported transfer or encumbrance in violation of the provisions of
this Section 2 shall be void, and the other party to any such purported
transaction shall not obtain any rights to or interest in such Common Shares.

3.             Vesting of
Restricted Shares.  The
Restricted Shares shall become nonforfeitable on                          
if the Grantee shall have continued to serve on the Board until such date.  Subject to the terms of the Plan and
notwithstanding the preceding sentence, all of the Restricted Shares shall
immediately become nonforfeitable if, prior to the date the Restricted Shares
become fully nonforfeitable pursuant to the preceding sentence, and while the
Grantee is serving on the Board, (a) the Grantee dies, (b) the Grantee’s
disability occurs (as defined by the Board), (c) the Grantee retires at age 72
or (d) a Change in Control occurs.

4.             Forfeiture
of Shares.  The Restricted
Shares shall be forfeited if the Grantee ceases to serve on the Board prior to
the date the Restricted Shares become fully nonforfeitable pursuant to Section
3.  In the event of a forfeiture, the
certificate(s) representing the Restricted Shares covered by this Agreement
shall be canceled.

5.             Dividend, Voting and Other Rights.  Except as otherwise provided herein, from and
after the Date of Grant, the Grantee shall have all of the rights of a
stockholder with respect to the Restricted Shares, including the right to vote
the Restricted Shares and receive any dividends that may be paid thereon; provided,
however, that any additional Common Shares or other securities that the
Grantee may become entitled to receive pursuant to a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation, separation
or reorganization or any other change in the capital structure of the Company
shall be subject to the same restrictions as the Restricted Shares covered by
this Agreement.  The Grantee acknowledges
that the Restricted Shares are being acquired for investment and that the
Grantee has no current intention to transfer, sell or otherwise dispose of such
shares, except as permitted by the Plan and in compliance with Applicable Laws.

 

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6.             Retention of
Stock Certificate(s) by the Company. 
The certificate(s) representing the Restricted Shares shall be held in
custody by the Company, together with a stock power endorsed in blank by the
Grantee with respect thereto, until those shares have become nonforfeitable in
accordance with Section 3 of this Agreement. 
The Grantee hereby irrevocably appoints any officer of the Company as
his or her attorney-in-fact to transfer the Restricted Shares to the Company in
the event of the forfeiture of such shares.

7.             No Service
Contract.  Nothing contained
in this Agreement shall confer upon the Grantee any right with respect to
continuance of service with the Company, nor limit or affect in any manner the
right of the Company stockholders to terminate the service or adjust the
compensation of the Grantee.

8.             Taxes and
Withholding.  To the extent
that the Company shall be required to withhold any federal, state, local or
other taxes in connection with the issuance or vesting of the Restricted
Shares, and the amounts available to the Company for such withholding are
insufficient, the Grantee shall pay such taxes or make provisions that are
satisfactory to the Company for the payment thereof.

9.             Amendments.  Subject to the terms of the Plan, the Board
may modify this Agreement upon written notice to the Grantee.  Any amendment to the Plan shall be deemed to
be an amendment to this Agreement to the extent that the amendment is
applicable hereto.  Any waiver of any
term or condition or breach of this Agreement shall not be a waiver of any
other term or condition or of the same term or condition.

10.           Severability.  In the event that one or more of the
provisions of this Agreement shall be invalidated for any reason by a court of
competent jurisdiction, any provision so invalidated shall be deemed to be
separable from the other provisions hereof, and the remaining provisions hereof
shall continue to be valid and fully enforceable.

11.           Relation to Plan.  This Agreement is subject to the terms and
conditions of the Plan.  This Agreement
and the Plan contain the entire agreement and understanding of the parties with
respect to the subject matter contained in this Agreement, and supersede all
prior communications, representations and negotiations in respect thereto.  In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Plan.  The Board acting pursuant to the Plan, as
constituted from time to time, shall, except as expressly provided otherwise
herein, have the right to determine any questions which arise in connection
with the grant of Restricted Shares.

12.           Successors and Assigns.  Without limiting Section 2 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, administrators, heirs, legal representatives and assigns
of the Grantee, and the successors and assigns of the Company.

IN WITNESS
WHEREOF, the Company has caused this Agreement to be executed on its behalf by
its duly authorized officer and the Grantee has also executed this Agreement in
duplicate, as of the day and year first above written.

	
   

  	
  CARLISLE
  COMPANIES INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

2

 

 

The undersigned hereby acknowledges receipt of an executed
original of this Agreement and accepts the award of Restricted Shares granted
thereunder on the terms and conditions set forth herein and in the Plan.

 

	
   

  	
   

  
	
   

  	
  [Name
  of Director]

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

3Exhibit
10.57

 

SEPARATION AGREEMENT AND
GENERAL RELEASE

This Separation
Agreement and General Release (this “Agreement) is made and entered into by and
between Douglas S. Harrington, M.D. (“Executive”), and Specialty Laboratories,
Inc., a California corporation (the “Company”) (hereinafter, Executive and the
Company shall be referred to individually as a “Party” and collectively as the “Parties”),
with reference to the following facts:

 

A.            Executive has been employed by the
Company as its Chief Executive Officer and Laboratory Director.  The terms of Executive’s employment were
governed by a written Employment Agreement dated May 15, 2002 (the “Employment
Agreement”).

 

B.            Executive has decided to end his
employment relationship with the Company, and has tendered his voluntary
resignation effective March 29, 2005, 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 pay 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 Chief
Executive Officer and Laboratory Director and the termination of that
employment relationship.

 

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

 

1.             Transition Period.  Executive agrees to continue in
his position as the Company’s Chief Executive Officer and Laboratory Director
through the close of business on March 29, 2005.  Executive agrees that, prior to March 29,
2005, he shall use his best efforts to ensure a smooth executive transition,
including but not limited to: the signing and filing of the Company’s Annual
Report on Form 10-K, and any necessary documents or filings relating to
Sarbanes-Oxley Section 404; preparing for and completing the New York State
laboratory inspection scheduled for March 8-10, 2005; providing necessary
backup, certifications and qualifications as Laboratory Director as required
for all regulatory and accrediting authorities through March 29, 2005 (and a
thirty (30) day extension as needed and as required by the Company, as more
fully described in Section 3 below); and assisting with transition planning,
employee retention planning, and other transition activities.

 

2.             Voluntary Resignation of Corporate Positions.  Executive has voluntarily resigned, with such
resignation effective as of March 29, 2005, from any and all positions held as
an officer and employee of the Company. 
Executive acknowledges and understands that from March 29, 2005, he will
not be an employee of the Company.  Executive
will be paid for all accrued vacation and salary through March 29, 2005.

 

3.             Additional Thirty (30) Day Transition Period.  From March 30,
2005, and extending through the close of business on April 28, 2005, Executive
shall make himself available, as needed and as requested by the Company, to
ensure a continued smooth executive transition. 
The services to be provided by Executive during this extended transition
period shall include, without limitation, preparing 

 

 

1

 

for and completing any state
laboratory inspection; providing necessary backup, certifications and
qualifications as necessary for all regulatory and accrediting authorities,
including any necessary New York State Certificates of Qualification; and
assisting with transition planning, employee retention planning, and other
transition activities.  To the extent
feasible, the Company shall provide Executive with reasonable advance notice of
its requirements for services under this Section 3.  In the event the Company requests Executive’s
services during this thirty (30) day transition period, the Company shall pay
Executive $5,000 for each day that Executive provides such services.  Under no circumstances will Executive serve
as a CLIA or DHS director after March 29, 2005.

 

4.             Additional Services Beyond April 28, 2005.  Beyond April 28,
2005, Executive shall assist with, and actively participate in, any inspection
by California laboratory inspectors and/or inspectors from the Centers for
Medicare and Medicaid Services (“CMS”), and to extent necessary, Executive will
serve as a backup medical director/laboratory director or such other necessary
capacity as requested by the Company, but only to the extent necessary to
provide coverage for certifications and qualifications (including any necessary
New York State Certificates of Qualification) for which adequate coverage has
not yet been obtained by the Company.  To
the extent feasible, the Company shall provide Executive with reasonable
advance notice of its requirements for services under this Section 4.  In the event the Company requests Executive’s
services following April 28, 2005, the Company shall pay Executive $5,000 for
each day that Executive provides such services.

 

5.                                       Severance Payments.

 

(a)           On March 29, 2005, Company shall
provide Executive with his final payroll check, including all accrued vacation
and salary through March 29, 2005, and a one-time severance payment of $275,000
(less required withholdings and deductions authorized by Executive or required
by law).

 

(b)           The Company also agrees to pay
Executive $420,000 per year through March 29, 2007 (the “Severance Period”), to
be paid in accordance with the Company’s normal standard bi-weekly 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.

 

(c)           The Company shall reimburse Executive
for actual out-of-pocket expenses for COBRA payments for him and his dependents
for a period of up to 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.

 

(d)           Executive 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.

 

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6.               No Filing Of Claims.

 

6.1 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.

 

6.2 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.

 

7.             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 arising out of or relating to Executive’s employment by the Company
or the termination of such employment or arising out of or relating to
Executive’s service on the Board of Directors of the Company or the termination
of such service, 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.

 

8.             Release Of All Claims By The Company.  In consideration
for the promises and releases provided herein, the Company 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 behalf as of the
date of this Agreement arising out of or relating to Executive’s employment by
the Company or the termination of such employment or arising out of or relating
to Executive’s service on the Board of Directors of the Company or the
termination of such service, 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, and defamation claims; provided, however, that
this Section is not intended to, and shall not, waive or release any claims the
Company has or may have against Executive for fraud, theft, embezzlement or
material misappropriation of funds, or other illegal conduct by Executive while
employed by the Company, it being understood that the Company is not presently
aware of any such claims against Executive, but intends only to expressly
reserve the right to bring such claims (if any), notwithstanding the release
language contained in this Section to the contrary.

 

9.             Waiver Of Unknown Claims.  It is further
understood and agreed by Executive and the Company that, except as expressly
set forth in Section 8 above, Executive and the Company hereby 

 

 

3

 

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.

 

10.           Exercise Of Stock Options.

 

Executive
acknowledges that he has previously been granted certain options to purchase
shares of the Company’s common stock, and that this Agreement provides no
acceleration or extended exercise period of such options.  Executive acknowledges that as of March 29,
2005 any unvested options granted to Executive shall automatically expire, and
that any vested and unexercised options granted to Executive shall expire
pursuant to the terms and conditions of the Company’s 2000 Stock Incentive Plan
and the terms of the grant of such options at the time the grants were made.

 

11.           Covenant Of Confidentiality.

 

11.1  Acknowledgment of
Confidentiality of Proprietary Information.  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 he has
during the course of his employment with the Company 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 labeled 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.  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 

 

 

4

 

constitute a breach of this Section, provided that Executive shall give
the Company as much advance notice of such disclosure as is reasonably
practicable.

 

11.2 Restricted Activity.
Executive further acknowledges that the 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. Accordingly,
Executive agrees as follows:

 

(a)   Prohibited Activities.  Executive agrees that he will not at any time
during which he is entitled to receive payments pursuant to Section 5 above,
(i) 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; and (ii)
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.  As used
herein, “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.

 

(b)   Limitations on Certain Activities During
the Severance Period.  Executive
acknowledges and agrees that he has obtained the Company’s Proprietary
Information, including but not limited to the Company’s trade secrets.  Consequently, during any period for which
Executive is receiving payments from the Company pursuant to Section 5 above, Executive shall not, without prior
written consent of the Board, own, manage, operate, control or participate in
the ownership, management, operation or control of, or be employed by, any of
the following entities or their subsidiaries or affiliates:  Quest Diagnostics, Laboratory Corporation of
America Holdings (“LabCorp”), Associated Regional University Pathologists
Laboratories (“ARUP”), Mayo Medical Laboratories, Bio Reference Laboratories,
Estoterix, Inc., or Genzyme Corporation; 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.

 

(c)   Other Restrictions.  For a period of twelve (12) months beginning
on March 29, 2005, Executive shall not directly pursue or respond to
discussions about acquisition, joint venture or similar relationships or take
any other actions that might adversely affect the Company’s ability to complete
a transaction with the entities identified by the Company as candidates for
potential business combinations, strategic transactions, acquisition or joint
ventures and who had signed confidentiality agreements with the Company since
September 29, 2004.  Executive may, however,
pursue such discussions with any such entities at any time if Company first
confirms in writing to Executive that it has ended discussions with such
entity.

 

(d)   Permitted Activities.  Executive shall be free to engage in any
activities related to his fields of expertise to the extent not in conflict
with the terms of this Agreement. 
Without limiting the generality of the foregoing, notwithstanding the
restrictions contained herein, Executive may be employed or otherwise consult
with any entity, including any entities listed hereinabove, including those
contained in Section 11.2(b), provided that Executive is not directly involved
in the sales, marketing or general management of such entities, and Executive
is not in a position to solicit business or customers away from Company.  Executive may also be employed by or consult
with customers of the Company so 

 

5

 

long as in such capacity
Executive does not, or is not in a position to, solicit business or customers
away from Company.  Executive shall be
free to practice his expertise as a physician in areas that Company does not
have material involvement as of the date of this Agreement, such as anatomic
pathology, whether in a hospital, clinic, or the excluded entities listed
above, and as an employee or consultant to the biotech and diagnostics
industries.  Executive agrees that the
covenants contained herein are a material inducement to the Company for the
agreement to pay the severance payments set forth in Section 5 above.

 

(e)   Remedies.  Executive understands that the Company would
(i) have no further obligation to pay the salary payments set forth in
Section 5 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 11. 
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.

 

12.           Non-Disparagement. 
Company and Executive each agree not to publish or make any statement
disparaging or critical of the other Party (and in the case of Company, its
affiliates and/or their respective officers, directors, managers, supervisors,
employees, investors, products, services, or technology), or otherwise malign
the business or reputation of any of the foregoing entities or persons (“Adverse
Information”); provided, however, that if, after consulting with
legal counsel, either Party determines that it 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 is legally required to be disclosed shall not constitute a
breach of this Section, provided that each Party shall give the other as much
advance notice of such disclosure as is reasonably practicable; provided,
further, that nothing contained in this Section is intended to prevent
either Party from testifying truthfully in any legal proceeding.

 

13.           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 and for Executive’s agreements set forth
herein.  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.

 

14.           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.

 

 

6

 

15.           Return Of Company Property.  Except for the
Company laptop computer currently used by Executive, 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 on or before March 29, 2005.  Executive may retain the Company laptop
currently used by him, and such computer shall become the property of Executive
after Company’s representatives first remove any of Company’s confidential
information.

 

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

 

17.           Non-Confidentiality Of this Agreement.  The Parties
understand and agree that the principal terms of this Agreement have been
publicly disclosed and that a copy of this Agreement may be filed with the
Securities and Exchange Commission.

 

18.           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.

 

19.           Arbitration.  Any dispute or controversy between Executive,
on the one hand, and Company, on the other hand, in any way arising out of,
related to, or connected with this Agreement or the subject matter thereof, or
otherwise in any way arising out of related to, or connected with Executive’s
employment with Company or the termination of Executive’s employment with
Company, shall be resolved through final and binding arbitration in Los Angeles
County, California, pursuant to California Civil Procedure Code §§ 1282 —
1284.2.  In the event of such
arbitration, unless otherwise required by law, each Party shall pay its own
attorneys’ fees and costs and Company shall pay the arbitrator’s fees, and any
and all other administrative costs of the arbitration.  Notwithstanding any provision in this Section
19, neither Party shall be prohibited from seeking injunctive relief as
necessary to maintain the status quo pending an arbitration proceeding
regarding the breach or threatened breach of this Agreement or any other
confidentiality obligations owed to the other Party.

 

20.           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.

 

21.           Attorneys’ Fees.  In the event that either Party 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.

 

22.           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.

 

23.           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 that 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 the Parties hereto.

 

 

7

 

24.           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.

 

25.           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.

 

26.           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.

 

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

 

	
  DATED: April 22, 2005

  	
  By:

  	
  /s/ Douglas S. Harrington

  
	
   

  	
   

  	
  Douglas S. Harrington, M.D.

  
	
   

  	
   

  	
   

  
	
  DATED: April 19, 2005

  	
  SPECIALTY LABORATORIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard K. Whitney

  
	
   

  	
  Its:

  	
  Chairman of the Board of
  Directors

  
				

 

8

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