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EXHIBIT 10.25
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 30th day of September, 1998, by and between QUIDEL CORPORATION, a
Delaware corporation ("QUIDEL") and GLENN HOLMES, an individual ("HOLMES").
BACKGROUND
A. HOLMES has been employed by QUIDEL as its Vice President - Sales and
Marketing since July 1997.
B. HOLMES is voluntarily resigning as an officer of QUIDEL and each
subsidiary thereof and as a trustee of any and all benefit plans.
C. QUIDEL and HOLMES wish to agree upon an orderly executive transition
plan that enables QUIDEL, on an interim basis, to have the benefits of HOLMES'
continuing advice and input regarding important corporate matters.
AGREEMENT
1. RESIGNATION AS OFFICER. Concurrent with the execution and delivery
of this Agreement, HOLMES has executed and delivered to QUIDEL his resignation,
effective immediately, of all positions as an officer of QUIDEL and each
subsidiary thereof (other than the position expressly provided for herein) and
as a trustee of any and all benefit plans of QUIDEL and its affiliates. The form
of such resignation is in the form attached as Exhibit A and incorporated herein
by this reference.
2. FUTURE EMPLOYMENT. HOLMES shall continue to be employed by QUIDEL as
"Special Assistant to the President" from the date hereof until December 31,
1998. On January 1, 1999, all employment and/or consulting relationships between
the parties are forever terminated. Except as provided in Section 4 and Section
7 hereof, nothing herein shall prohibit or limit HOLMES' right, on and after the
date hereof, to accept employment and/or consulting relationships with other
third parties as long as HOLMES makes himself reasonably available from time to
time from the date hereof until December 31, 1998 to promptly respond to and
fulfill the reasonable requests for information and assistance from QUIDEL's
President and Chief Executive Officer.
3. RESPONSIBILITIES. On and after the date hereof, HOLMES shall report
for his duties directly to QUIDEL's President and Chief Executive Officer. The
President and Chief Executive Officer shall determine HOLMES' reasonable duties
and responsibilities. Notwithstanding anything to the contrary herein, in the
event HOLMES is unable to carry out his responsibilities hereunder because of
his death or disability, such inability shall not be deemed a breach or
termination of this Agreement and HOLMES or his estate, as
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applicable, shall continue to enjoy all of the benefits provided herein as
though HOLMES were not disabled or deceased.
4. NON-COMPETITION/NON-SOLICITATION.
(a) Non-Competition. From the date hereof until December 31, 1998,
HOLMES covenants and agrees that he shall not, directly or indirectly, have any
interest in or enter into or maintain any relationship with (whether as
director, officer, employee, agent, representative, security holder, consultant,
advisor or otherwise) any of the entities listed on Exhibit B attached hereto
and incorporated by this reference or any affiliate of such listed entities. In
the event of any breach by HOLMES of this Section 4(a), QUIDEL shall have the
right to immediately terminate this Agreement upon written notice. In the event
of such early termination, HOLMES and QUIDEL expressly agree that (i) QUIDEL
shall have no further obligation or liability to make the cash payments or
provide the benefit coverages contemplated by Section 5 below for or
attributable to any period after the date of such early termination, and (ii) no
portion of HOLMES' unvested Options shall enjoy the benefit of vesting
acceleration on December 31, 1998 as provided in Section 6 below.
(b) Non-Solicitation of Employees. From the date hereof until the
second (2nd) anniversary date hereof, HOLMES covenants and agrees that he shall
not, directly or indirectly, by or for himself, or as the agent of another, or
through others, in any way solicit or induce, or attempt to solicit or induce,
any employee, officer, representative, consultant or other agent of QUIDEL or
any subsidiary thereof (a "QUIDEL Person") to leave the employ of or other
relationship with QUIDEL or such subsidiary or otherwise interfere with the
employment or other relationship between such person and QUIDEL or any
subsidiary thereof. Notwithstanding the foregoing, HOLMES shall have no
liability under this Section 4(b) with respect to any QUIDEL Person who leaves
the employ of or other relationship with QUIDEL or any subsidiary thereof if
such QUIDEL Person does not, within six (6) months thereafter, enter into any
employment, consulting, representative, agency or investor relationship with
HOLMES or any entity in which HOLMES has an employment, director,
representative, consulting, or investment role.
5. CASH COMPENSATION AND BENEFITS. Subject to HOLMES' fulfillment of
his obligations under this Agreement (including without limitation those set
forth in Section 4(a) and Section 7 hereof but subject to the last sentence of
Section 3), the parties agree as follows:
(a) Base Salary. Concurrent with the execution and delivery of this
Agreement, QUIDEL is paying to HOLMES an aggregate employment compensation
amount, in lump sum, equal to three times his monthly salary rate of $15,416.67,
less tax withholdings from such compensation as required by law and consistent
with past practice. To the extent permitted under applicable plans, HOLMES will
continue to be eligible for group insurance programs and benefits until December
31, 1998.
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(b) Severance. Concurrent with the execution and delivery of this
Agreement, QUIDEL is paying to HOLMES an aggregate severance payment, in lump
sum, equal to three times his monthly salary rate of $15,416.67, less applicable
withholdings required by law.
(c) Incentive Plan. HOLMES shall not be eligible to participate in or
receive payments pursuant to any incentive programs or bonus adopted for any
period commencing after March 31, 1998.
(d) Medical Insurance. QUIDEL shall, at its own expense and until the
first anniversary of the date hereof, continue to provide to HOLMES and his
dependents who are currently covered under QUIDEL's insurance program medical,
vision and dental benefits at the same levels and on the same terms as HOLMES
and his qualifying dependents enjoy and receive as of the date hereof; provided,
however, that (i) these benefits shall be earlier terminated or reduced, as
applicable, if, when and to the extent HOLMES receives concurrent coverage
through another program, (ii) HOLMES shall be responsible for any and all taxes
if the value of such benefits must be included in his income, and (iii) the
levels and nature of such benefits may be modified by QUIDEL if, when and to the
same extent modifications to such benefits are made applicable to all other
executive officers of QUIDEL.
(e) Vacation/Other Benefits. No vacation benefits or, except as
expressly provided herein, other employee-type benefits shall accrue to or for
HOLMES from and after the date hereof. All of HOLMES' accrued but unused
vacation up to the date hereof shall be paid to him, less applicable
withholdings required by law, within two days of the date hereof.
(f) Outplacement. QUIDEL shall also pay for up to a maximum of six (6)
months of the reasonable expenses of Drake Beam Morin, an executive outplacement
firm, it being understood that QUIDEL shall in no event have an obligation to
pay for any such services for any period after March 31, 1999.
(g) No Offsets. The amounts payable to HOLMES pursuant to this
Agreement shall not be subject to reduction or offset as a result of
compensation or benefits received by HOLMES attributable to other employment
and/or consulting arrangements HOLMES may enter into with third parties on or
after the date hereof.
(h) No Other Amounts. Except as expressly provided in this Agreement
and pursuant to the Options referred to in Section 6 below, HOLMES acknowledges
and agrees that he is entitled to no further compensation or benefits from
QUIDEL, including without limitation any further severance payments.
6. OPTIONS. The following schedule sets forth certain particulars as to
the issued and outstanding stock options (the "Options") that have been granted
to and are currently held by HOLMES:
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SHARES UNDERLYING
GRANT DATE EXPIRATION DATE EXERCISE PRICE ($/SH) OPTION (#) SHARES EXERCISABLE (#)
---------- --------------- --------------------- ---------- ----------------------
07/07/97 07/07/07 3.500 50,000 12,500
07/28/98 07/28/08 3.375 13,101 0
07/28/98 07/28/08 3.375 1,899 0
------ ------
TOTALS 65,000 12,500
====== ======
Subject to HOLMES' fulfillment of his obligations under this Agreement
(including without limitation the obligations set forth in Section 4(a) and
Section 7 hereof but subject to the last sentence of Section 3), all unvested
Options set forth above which have not vested prior to December 31, 1998 --
except for the last two grants of Options covering an aggregate of 15,000 shares
that were granted on 7/28/98 (the "Excluded Options") -- shall fully and
automatically vest and become exercisable on December 31, 1998. (The Excluded
Options shall not be accelerated and shall therefore not become exercisable.)
QUIDEL represents and warrants that the foregoing vesting acceleration has been
authorized by the Compensation Committee of the Board of Directors acting
pursuant to its authority as set forth in Section 4(b)(vi) of QUIDEL's 1990
Employee Stock Option Plan, as amended (the "Plan"). HOLMES understands and
accepts that the foregoing vesting acceleration may have the effect of
disqualifying Options originally granted as Incentive Stock Options so that such
Options shall, for federal and state tax purposes, be treated as Non-Qualified
Stock Options. HOLMES further acknowledges that all required tax withholdings
attributable to his exercise of the Options will either be tendered by him at
the time of his exercise or will be withheld as part of the exercise
authorization provided herein.
For all Options other than Incentive Stock Options (if any), and
pursuant to the Compensation Committee's authorization pursuant to Section
8(a)(iii) of the Plan, the consideration payable by HOLMES to QUIDEL upon
exercise of the Options and representing the aggregate exercise price may -- at
HOLMES' election -- be payable in or by:
(1) cash;
(2) check;
(3) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to
QUIDEL the amount of sale or loan proceeds required to pay the
exercise price (in which event QUIDEL shall pay for or
reimburse HOLMES for all reasonable broker commissions
attributable to such transaction); or
(4) any combination of the foregoing.
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Similarly, the amount of tax required to be withheld by the Company as a result
of exercise of the Options may also be effected by one or any combination of the
foregoing at the election of HOLMES.
Except as otherwise provided in this Agreement, all Options shall
continue to be subject to and governed by the terms and conditions of the
relevant Stock Option Agreements and the Plan. Such terms include the period of
time within which HOLMES must exercise his Options after termination of his
employment with QUIDEL (i.e., 90 calendar days). Subject to the preceding
sentences, HOLMES may exercise already vested Options at any time or from time
to time during the term of this Agreement.
7. INVENTION AND CONFIDENTIALITY AGREEMENT. Nothing herein shall be
deemed to terminate or limit HOLMES' continuing obligations under that certain
Invention and Confidential Information Agreement, dated as of July 7, 1997, a
copy of which is attached hereto as Exhibit C and incorporated herein by this
reference (the "Prior Agreement"). HOLMES acknowledges the fundamental
importance of the Prior Agreement to QUIDEL and agrees to strictly honor his
obligations thereunder.
8. GENERAL RELEASES.
(a) By HOLMES. Except as provided in Section 8(c) herein, HOLMES hereby
irrevocably and unconditionally releases, acquits and forever discharges QUIDEL
and all of its current, former and future subsidiaries, affiliates, divisions,
successors, predecessors, assigns, stockholders, directors, officers, employees,
agents, representatives, attorneys, accountants and all persons acting by,
through, under or in concert with any of them (collectively, the "QUIDEL
Releasees"), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including attorneys' fees
and costs) actually incurred of any nature whatsoever, known or unknown,
suspected or unsuspected ("Claim" or "Claims") which HOLMES now has, owns or
holds, or claims to have, own or hold, or which HOLMES at any time heretofore
had, owned or held, or claimed to have had, owned or held, or which HOLMES at
any time hereafter may have, own or hold, or claim to have, own or hold, against
any of the QUIDEL Releasees relating to any event, act or omission that has
occurred prior to or as of the date of this Agreement.
(b) By QUIDEL. Except as provided in Section 8(c) herein, QUIDEL hereby
irrevocably and unconditionally releases, acquits and forever discharges HOLMES
and all of his heirs, successors, agents, representatives, attorneys,
accountants and all persons acting by, through, under or in concert with any of
them (collectively, the "HOLMES Releasees"), from any and all known or unknown,
suspected or unsuspected, Claims which QUIDEL now has, owns or holds, or claims
to have, own or hold, or which QUIDEL at any time heretofore had owned or held,
or claimed to have had, owned or held, or which QUIDEL at any time hereafter may
have, own or hold, or claim to have, own or hold, against any of the HOLMES
Releasees relating to any event, act or omission that has occurred prior to or
as of the date of this Agreement.
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(c) No Release of Indemnity Rights. The releases provided herein do not
include any release of any right of indemnity or contribution as between HOLMES
and/or QUIDEL in the event that any person subsequently brings an action against
HOLMES and/or QUIDEL pertaining to or arising from, in whole or in part,
HOLMES's performance of his duties as an officer or employee of QUIDEL, or any
act or omission alleged on the part of HOLMES in those capacities. All such
rights of indemnity or contribution, whether arising under the California Labor
Code, the Articles of Incorporation or Bylaws of Quidel, common law, or
otherwise are expressly reserved by both parties. QUIDEL further agrees that it
will maintain, for the term of this Agreement, directors and officers insurance
coverage providing the same or greater protection for HOLMES as existed on
September 1, 1998.
(d) Waiver. Except as provided in Section 8(c) herein, HOLMES and
QUIDEL each expressly waives and relinquishes all rights and benefits afforded
by Section 1542 of the Civil Code of the State of California, and does so
understanding and acknowledging the significance and consequence of such
specific waiver of Section 1542. Section 1542 of the Civil Code of the State of
California states 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."
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge of the QUIDEL
Releasees and the HOLMES Releasees, HOLMES and QUIDEL each expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all Claims which he or it does not know or suspect to exist in his
or its favor at the time of execution hereof, and that this Agreement
contemplates the extinguishment of any such Claim or Claims.
HOLMES and QUIDEL each represents and warrants to the QUIDEL Releasees
and the HOLMES Releasees, respectively, that he or it has not heretofore
assigned or transferred, or purported to assign or transfer, to any person or
entity, any Claim or any portion thereof, or interest therein, and agrees to
indemnify, defend and hold the QUIDEL Releasees and the HOLMES Releasees,
respectively, harmless from and against any and all Claims, based on or arising
out of any such assignment or transfer, or purported assignment or transfer, of
any Claims or any portion thereof or interest therein.
HOLMES agrees that the releases contained herein apply without
limitation to any and all rights, claims and remedies he may have under the Age
Discrimination in Employment Act and the Older Workers Benefit Protection Act.
In accordance with those laws, HOLMES will have 21 days from receipt of this
Agreement to consider this Agreement, he shall have 7 days following the signing
of this Agreement to revoke it in writing, and this Agreement shall not be
effective or enforceable until the revocation period has expired. HOLMES may, if
he so desires, waive the full 21 day period to consider this Agreement.
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9. MISCELLANEOUS.
(a) Entire Agreement; Modification. This Agreement and the Exhibits
attached hereto constitute the full and entire understanding and agreement of
the parties hereto with regard to the subjects hereof, and supersede all prior
agreements or understandings, written or oral, between the parties with respect
to the subject hereof. This Agreement may not be amended or modified except by a
written instrument signed by both of the parties hereto.
(b) Governing Law. This Agreement shall be governed by the internal
laws of the State of California, except to the extent to which the laws of the
United States may be applicable.
(c) Severability. In the event any provision of this Agreement is
invalid, void, illegal, or unenforceable, the remaining provisions hereof
nevertheless will continue in full force and effect without being impaired or
invalidated in any way.
(d) Notices. All notices and other communications required or permitted
under this Agreement, other than routine operational communications, will be in
writing and will be deemed to have been duly given, made and received only when
personally delivered or delivered by Federal Express, United Parcel Service or
other nationally recognized courier service, or three (3) calendar days after
having been deposited in the United States mail, certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
If to QUIDEL: Quidel Corporation
10165 McKellar Court
San Diego, CA 92121
Attention: President and Chief
Executive Officer
If to HOLMES: Glenn Holmes
4979 Flaxon Terrace
San Diego, CA 92130
Any party may change the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
(e) Further Assurances. Each party agrees to promptly execute,
acknowledge and deliver such other and further instruments, writings and
documents as may reasonably be requested in writing by the other party to carry
out this Agreement. Each party agrees to use all reasonable efforts and to
exercise good faith in fulfilling its or his obligations under this Agreement.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
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(g) Voluntary Agreement/Conflicts Waiver. HOLMES represents and
warrants (i) that he has carefully read the terms of this Agreement and fully
understands and accepts these terms, and (ii) that he has had full and adequate
opportunity and time, and has been advised by QUIDEL, to consult with counsel of
his choosing prior to executing this Agreement.
(h) Construction. The language herein shall be construed simply and in
accordance with its plain meaning and shall not be construed or interpreted
strictly for or against any party hereto, regardless of the source of
draftsmanship.
(i) Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and their representatives, heirs, administrators,
successors and assigns.
(j) Non-Disparagement. The parties mutually agree that, from and after
the date hereof, neither shall disparage or defame the other in any verbal or
written communications with any third party (including without limitation any
prospective or actual employer, customer, client or other industry participant).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
QUIDEL CORPORATION GLENN HOLMES
By:_______________________________ By:_________________________________
Andre de Bruin Glenn Holmes
President and Chief Executive Officer
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EXHIBIT A
TO: QUIDEL CORPORATION BOARD OF DIRECTORS
FROM: GLENN HOLMES
RE: RESIGNATION
Please accept this notice as my resignation, effective immediately, of
all positions as an employee or officer of QUIDEL CORPORATION and any subsidiary
thereof (other than the position contemplated by my Employment Agreement dated
of even date herewith) and all positions as a trustee of any and all benefit
plans of QUIDEL CORPORATION or any subsidiary thereof.
September 30, 1998 ____________________________________
Glenn Holmes
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EXHIBIT B
DIRECT COMPETITORS
Applied Biotech, Inc.
Biostar, Inc.
Meridian Diagnostics Inc.
Pharmatech
Smithkline Diagnostics/Beckman Coulter Primary Care
Trinity Biotech PLC
Unipath/Unilever/Carter Wallace
Wyntek Diagnostics, Inc.
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EXHIBIT C
INVENTION AND CONFIDENTIALITY AGREEMENT
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