EXHIBIT 10.51
CHOLESTECH CORPORATION
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT (this "Agreement") is made as of April 1, 2003,
by and between Cholestech Corporation (the "Company") and Donald P. Wood (the
"Executive").
WHEREAS, the Executive is employed by the Company as the Company's Vice
President of Operations; and
WHEREAS, the Company wishes to provide, the Executive is willing to
accept, certain benefits and compensation in the event of the termination of
Executive's employment under the terms and conditions set forth in this
Agreement.
NOW THEREFORE in consideration of the promises and mutual covenants
contained herein, and other good and valuable consideration, the parties agree
as follows:
1. At-Will Employment. The Company and the Executive acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable law. If the Executive's employment terminates for any reason, the
Executive shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
established under the Company's then existing employee benefit plans or policies
at the time of termination.
2. Severance Benefits.
(a) Option Acceleration. If the Company terminates the Executive's
employment, for any or no reason, then any unvested and outstanding stock
options granted to the Executive by the Company shall accelerate as to that
number of shares which would have become vested and exercisable had the
Executive remained employed with the Company until the date that is 12 months
after the date of such termination. Such accelerated shares shall continue to be
subject to the terms and conditions of the Company's stock option plans and the
applicable option agreements between the Executive and the Company. The
Executive agrees and acknowledges that the remaining unvested shares of the
Company subject to his stock options, excluding the accelerated shares
referenced above, shall terminate immediately as of the date of such
termination.
(b) Severance Payment. If the Company terminates the Executive's
employment, for any or no reason, then the Executive shall be entitled to
receive a severance payment in an amount equal to 12 months of the Executive's
base salary as in effect immediately prior to such termination. Such severance
payment shall be in lieu of any other severance payment to which the Executive
shall be entitled pursuant to any employment agreement, offer letter or the
Company's then existing severance plans and policies. Such severance payment
shall be payable over a period of 12 months commencing on the date of such
termination in accordance with the Company's normal payment practices. In
addition, during the 12 month period commencing on the date of such termination,
the Company shall continue to make available to the Executive and the
Executive's spouse and dependents covered under any group health plans or life
insurance plans of the Company
on the date of such termination of employment, all group health, life and other
similar insurance plans in which the Executive or such covered dependents
participate on the date of the Executive's termination; provided, however, that
(i) the Executive constitutes a qualified beneficiary, as defined in Section
4980B(g)(1) of the Internal Revenue Code of 1986, as amended; and (ii) the
Executive elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), within the time period
prescribed pursuant to COBRA.
3. Mitigation. The Executive shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such payment
be reduced by any earnings that the Executive may receive from any other source.
However, the Executive shall not be entitled to receive the health coverage and
benefits contemplated by this Agreement in the event that the Executive receives
similar health coverage and benefits as a result of new employment during the 12
month period commencing on the date of the Executive's termination.
4. Execution of Release Agreement upon Termination. As a condition of
entering into this Agreement and receiving the benefits under Section 2, the
Executive agrees to execute and not revoke a release of claims agreement
substantially in the form attached hereto as Exhibit A upon the termination of
his employment with the Company.
5. Non-Disparagement. The Executive agrees to refrain from any
defamation, libel or slander of the Company and its respective officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations and assigns or
tortious interference with the contracts and relationships of the Company and
its respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations and assigns.
6. Successors.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the Company's obligations under this Agreement and
agree expressly to perform the Company's obligations under this Agreement in the
same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) Executive's Successors. Without the written consent of the
Company, the Executive shall not assign or transfer this Agreement or any right
or obligation under this Agreement to any other person or entity.
Notwithstanding the foregoing, the terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
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7. Arbitration.
(a) Except as provided in Section 7(d) below, any dispute or
controversy arising out of, relating to, or in connection with this Agreement,
or the interpretation, validity, construction, performance, breach, or
termination thereof, shall be settled by binding arbitration to be held in Palo
Alto, California, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of
any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. The Executive hereby consents
to the personal jurisdiction of the state and federal courts located in
California for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are participants.
(c) The Executive understands that nothing in this Section
modifies the Executive's at-will employment status. Either the Executive or the
Company can terminate the employment relationship at any time, with or without
cause.
(d) THE EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. THE EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS
ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THE EXECUTIVE'S RIGHT TO A JURY TRIAL
AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR
STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE
SECTION 201, et seq;
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(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
8. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of California.
9. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
10. Waiver. No provision of this Agreement may be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Executive and by an authorized officer of the Company (other
than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
11. Employment Taxes. All payments made pursuant to this Agreement shall
be subject to withholding of applicable income and employment taxes.
12. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the date set forth
above.
COMPANY: CHOLESTECH CORPORATION
By: /s/ Warren E. Pinckert II
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Title: Chief Executive Officer and President
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EXECUTIVE: /s/ Donald P. Wood
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Donald P. Wood
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