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Exhibit 10.33
Employment Agreement
Between
Surya N. Mohapatra
and
Quest Diagnostics Incorporated
Dated as of November 9, 2003
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TABLE OF CONTENTS
Page
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1. Employment...............................................................................................2
2. Employment Term..........................................................................................2
(a) Term............................................................................................2
(b) Agreement terminated under certain circumstances on or before December 31, 2003.................3
3. Duties...................................................................................................3
4. Place of Performance.....................................................................................4
5. Cash Compensation........................................................................................4
(a) Base Salary.....................................................................................4
(b) Annual Bonus....................................................................................5
(c) Deferral........................................................................................5
(d) Incentive Award Modifications...................................................................5
6. Equity Awards............................................................................................6
(a) Option Grant....................................................................................6
(b) Additional Compensation.........................................................................7
(c) Restrictions on Option Shares...................................................................8
7. Employee Benefits........................................................................................9
(a) General Provisions..............................................................................9
(b) Supplemental Executive Retirement Plan..........................................................9
(c) Vacation and Sick Leave........................................................................10
8. Applicable Taxes........................................................................................10
9. Miscellaneous Benefits..................................................................................10
(a) Business Travel and Expenses...................................................................10
(b) Executive Driver...............................................................................10
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(c) Relocation Expenses............................................................................11
(d) Non-Exclusivity................................................................................11
10. Termination of Employment...............................................................................11
(a) Termination by the Company for Cause...........................................................11
(b) Disability.....................................................................................12
(c) Death..........................................................................................13
(d) Termination by the Executive for Good Reason...................................................13
(e) Other Terminations.............................................................................16
(f) Notice of Termination..........................................................................16
(g) Resignation....................................................................................17
11. Compensation upon Termination or During Disability......................................................17
(a) Disability.....................................................................................17
(b) Death..........................................................................................18
(c) Termination for Cause; Termination by the Executive other than for Good Reason or Disability...19
(d) Termination Resulting from Non-Renewal of this Agreement.......................................20
(e) All Other Terminations.........................................................................21
(f) Other Severance Provisions.....................................................................23
(g) Change in Control Protections and Excise Tax Gross-Up..........................................23
(h) Change in Control..............................................................................25
12. Non-Solicitation and Non-Competition....................................................................28
(a) Term of Non-Compete............................................................................28
(b) Term of Non-Solicitation of Customers..........................................................29
(c) Term of Non-Solicitation of Employees..........................................................29
(d) Term of Non Compete, Non Solicitation Automatically Extended...................................29
(e) Definitions Applicable to Section 12...........................................................29
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(f) Expedited Arbitration Applicable to Section 12.................................................30
(g) Exclusive Property.............................................................................30
(h) Injunctive Relief..............................................................................31
13. Arbitration.............................................................................................32
14. Confidentiality.........................................................................................32
15. Other Matters...........................................................................................33
(a) Entire Agreement...............................................................................33
(b) Assignment.....................................................................................34
(c) Notices........................................................................................34
(d) Amendment/Waiver...............................................................................34
(e) Applicable Law.................................................................................34
(f) Severability...................................................................................34
(g) Successor in Interest..........................................................................35
(h) No Mitigation/No Offset........................................................................35
(i) Joint Participation in Drafting................................................................36
16. Indemnification.........................................................................................36
17. Authority...............................................................................................36
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Execution Copy
Employment Agreement
Between
Surya N. Mohapatra
and
Quest Diagnostics Incorporated
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
November 9, 2003 (the "Effective Date"), between QUEST DIAGNOSTICS INCORPORATED
(the "Company"), a Delaware corporation having its principal place of business
at One Malcolm Avenue, Teterboro, NJ 07608, and SURYA N. MOHAPATRA (the
"Executive").
WHEREAS, the Executive has been heretofore employed by the Company as
President and Chief Operating Officer; and
WHEREAS, the Company considers the services of the Executive to be
unique and essential to the success of the Company's business; and
WHEREAS the Company and the Executive had previously entered into a
letter agreement dated January 15, 1999 ("Letter Agreement"); and
WHEREAS, the Company and the Executive now wish to enter into this
Agreement on the terms and conditions set forth herein, and which, except as
otherwise provided herein, shall constitute the sole and exclusive agreement as
of the Effective Date relating to the employment of the Executive by the
Company.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, terms and conditions set forth herein, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed between the Company and the Executive that his existing
agreement shall be amended and modified in its entirety as follows:
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1. Employment. The Company shall continue to employ the Executive in a
full-time capacity in the positions set forth in this paragraph, and the
Executive shall accept such employment upon the terms and conditions set
forth herein. Until the CEO Succession Date (as hereinafter defined), such
employment shall be in the capacity of President and Chief Operating
Officer of the Company, and as a member of the Board of Directors of the
Company (the "Board"). On or immediately following the Effective Date, the
Company shall announce that the Executive will become President and Chief
Executive Officer ("CEO") of the Company as the Board may determine,
provided that the Executive shall become CEO no later than the Company's
Annual Meeting of Shareholders in 2004 (or May 31, 2004, whichever is
earlier) (the "CEO Succession Date"). On and following the CEO Succession
Date, the Executive's employment shall be in the capacity of President and
CEO, reporting directly to the Board, and it is the intention of the
parties that he shall serve as a member of the Board throughout the
Employment Term (as hereinafter defined). The Board shall nominate the
Executive as a Director of the Company and shall use its best efforts to
have the Executive elected and re-elected to the Board for the duration of
the Employment Term.
2. Employment Term.
(a) Term. The term of Executive's employment under this Agreement
shall commence as of January 1, 2004 and continue until December
31, 2006 (the "Employment Term"). Subject to 6 (six) months
written notice of non-renewal by either party to the other, this
Agreement will be automatically renewed for successive one-year
terms, after December 31, 2006. For purposes of this Agreement,
the "Employment Term" shall mean the period from January 1, 2004
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to the earlier to occur of (i) the scheduled expiration of the
Employment Term, including any extension thereof, or (ii) the
termination of the Executive's employment in accordance herewith.
(b) Agreement terminated under certain circumstances on or before December
31, 2003. If Executive's employment is terminated for any reason on or
prior to December 31, 2003, the Executive shall have no rights under
this Agreement which shall be deemed null and void and of no force or
effect, but Executive shall retain all rights granted to him under the
Letter Agreement.
3. Duties. From the CEO Succession Date through the end of the Employment
Term, the Executive shall, subject to the supervising powers of the Board,
have those powers and duties consistent with the position of President and
Chief Executive Officer in a company the size and nature of the Company,
which powers shall in all cases include, without limitation, the power of
supervision and control over, and responsibility for, the general
management and operations of the Company (including the hiring and firing
of employees and the appointment and termination of senior officers),
development and implementation of a comprehensive strategic business plan,
supervision of the day-to-day executive management process, and acting as
spokesperson for the Company. All senior officers and other officers with
direct operational responsibilities shall report directly to the Executive
unless the Executive in his sole discretion delegates such reporting
responsibilities, in whole or in part, to another executive. It is the
intention of the parties that the provisions of this Section 3 shall be
applied in a manner consistent with the Sarbanes-Oxley Act of 2002, as
amended from time to time. The Executive shall actively participate in the
selection process but shall not have the power to veto the
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Board's appointment, if it decides to make such appointment, of a
non-executive Chairman from time to time, which non-executive Chairman
shall be responsible for presiding over the Board and meetings of
shareholders. Upon the Executive becoming CEO, the Chairman of the Board
shall not be assigned or delegated duties that are preserved to the
Executive pursuant to this Section 3. Executive agrees to devote
substantially all his working time and attention to the business of the
Company. The Executive shall not, without the prior consent of the
Company's Board of Directors, be directly or indirectly engaged in any
other trade, business or occupation for compensation requiring his personal
services during the Employment Term. Nothing in this Agreement shall
preclude the Executive from (i) engaging in charitable and community
activities or from managing his personal investments, or (ii) serving as a
member of the board of directors of an unaffiliated company not in
competition with the Company, subject, however, with respect to each such
board membership, to approval by the Company's Board (not to be
unreasonably withheld). During the Employment Term, the Executive shall be
nominated for re-election as a member of the Board of Directors.
4. Place of Performance. The principal place of employment of the
Executive shall be at the Company's principal executive offices in
Teterboro, New Jersey; Lyndhurst, New Jersey; or New York, New York.
5. Cash Compensation. Executive shall be compensated for services
rendered during the Employment Term as follows:
(a) Base Salary. During the Employment Term commencing January 1, 2004,
Executive shall be compensated at an annual base salary of no less
than $875,000 (the base salary, at the rate in effect from time to
time, is hereinafter referred to as
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the "Base Salary"). The Board, or a committee thereof, shall review
and may, if appropriate, at its discretion, increase (but not
decrease) the annual Base Salary during the Employment Term. Base
Salary shall be reviewed annually and be adjusted to reflect (among
other factors) increases generally granted to other senior executives
of the Company and Executive's performance consistent with Company pay
practices. The Base Salary shall be payable in equal bi-weekly
installments.
(b) Annual Bonus. In addition to the Base Salary provided for in Section
5(a) above, the Company will provide annual cash bonus awards to
Executive under its Management Incentive Plan (MIP) in accordance with
the plan and any financial performance targets thereunder ("Annual
Bonus") each year during the Employment Term. During the Employment
Term commencing January 1, 2004, Executive's target incentive
opportunity under the Company's MIP will be no less than 120% of Base
Salary (the target bonus as a percentage of Base Salary, as in effect
from time to time, is hereinafter referred to as the "Target Bonus").
The Target Bonus as a percentage of Base Salary shall be reviewed
annually for increase (but not decrease) by the Board or a committee
thereof.
(c) Deferral. Pursuant to the terms of the Company's Supplemental Deferred
Compensation Plan ("SDCP"), the Executive may elect to defer from
payments of Base Salary and Annual Bonus and any other eligible
compensation amounts as provided for under the SDCP.
(d) Incentive Award Modifications. Any equity and option awards made to
the Executive on or prior to the Effective Date and any equity and
option awards that
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may be made to the Executive during the Employment Term shall be
subject to, and shall benefit from, any amendments or revisions to the
terms and conditions of any of the Company's Incentive Compensation
Programs (including, without limitation, any action resulting in
extended exercise periods) that may be implemented on or after the
Effective Date.
6. Equity Awards.
(a) Option Grant.
(i) On or about the February 19, 2004 meeting of the Company's
Board of Directors (the "Option Grant Date"), except as noted
below, the Executive shall be awarded options to purchase a
total of 170,000 (one hundred seventy thousand) shares of the
Company's common stock (the "Option Shares") at an exercise
price equal to the average of the quoted high and low price per
share of such common stock on the date of the award (the
"Option Grant"). Except as otherwise provided herein, such
options shall be granted in accordance with those provisions
(including exercisability) established by the Board of
Directors at the time such option is granted and applicable to
other senior executives of the Company.
(ii) Subject to Section 6(a)(v), the Option Shares shall vest as to
1/3rd thereof on each anniversary of the Option Grant Date,
provided, that (A) on the applicable vesting date, the
Executive is then still in the employ of the Company, or (B)
the provisions of Section 11(g)(i) apply;
(iii) If the Executive's employment is terminated by the Company for
Cause or by the Executive without Good Reason or upon his death
or Disability, in
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each case on or prior to the Option Grant Date,
the Executive shall have no right to any part of the Option Grant
but shall retain all option rights granted to him under the
Letter Agreement and other stock options grants. If the
Executive's employment is terminated by the Company without Cause
or by the Executive for Good Reason or if there is a Change in
Control (as hereinafter defined), in each case on or prior to the
Option Grant Date, the Option Grant and the Option Grant Date
shall be deemed to occur immediately prior to the Date of
Termination or the Change in Control, as the case may be, and the
Option Shares as so granted shall be treated in accordance with
this Section 6(a), including clause (v) hereof.
(iv) Except as otherwise provided for in this Agreement, vested Option
Shares may not be exercised after the expiration of the 10-year
term of applicable Option Agreement.
(v) In the event that the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason or upon
the Executive's death or Disability, or if the Executive is
receiving severance pursuant to Section 11(d) hereof (for
non-renewal of the Employment Term), the Option Shares shall be
treated in accordance with the applicable termination provision
of Section 11 relating to the treatment of stock options upon
such termination.
(b) Additional Compensation. Executive may be awarded additional
compensation pursuant to the present or any future incentive
compensation or long-term compensation program established for the
senior executive officers of the
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Company, with the exception of any such program established for the
exclusive benefit of Kenneth W. Freeman (collectively the "Incentive
Compensation Programs"), in an appropriate manner for the position
occupied by the Executive and his performance therein relative to
other Company senior executive officers, with the exception of
Kenneth W. Freeman, and consistent with Company pay practices,
provided that in all events the Executive shall be treated on a basis
no less favorable than other senior executives are treated (with the
exception of Kenneth W. Freeman). Except as otherwise provided
herein, compensation granted under such plans will be subject to the
actual provisions and conditions applicable to such plans.
(c) Restrictions on Option Shares. The Executive agrees in respect of the
Option Shares that he shall not (i) sell, transfer or otherwise
dispose of any Option Shares or any interest therein other than in
compliance with the Company's 1999 Employee Equity Participation
Program, the stock option agreement between the Company and Executive
relating to such Option Shares, and the Company's Policy for
Purchasing and Selling Securities, (ii) enter into any transaction
that is expected to result in a financial benefit arising from a
decline in the value of the Company's stock or (iii) enter into any
hedging transactions, including, but not limited to the use of
financial derivatives, short sales or any other similar transactions,
without the prior written consent of the Board of Directors, in each
case with respect to Subsections (i), (ii) and (iii) until the Option
Shares are vested to the fullest extent provided for under this
Agreement, and all restrictions against exercise of such Option
Shares have expired or been terminated.
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7. Employee Benefits.
(a) General Provisions. Except as expressly provided in this Agreement,
the Executive shall be eligible to participate in all employee
benefit and welfare plans offered by the Company to its senior
executive officers (e.g., Life Insurance, Medical & Dental Insurance,
Travel, Accident, STD & LTD, Flexible Spending Accounts, Regular and
Supplemental AD&D, Optional/Supplemental Life Insurance, Profit
Sharing, the 401(k) Plan and Employee Stock Purchase Plan)
(collectively referred to as the "Benefit Plans") on a basis that is
no less favorable to the Executive than that made available to other
senior executive officers, with the exception of Kenneth W. Freeman,
of the Company, provided that the Executive shall be reimbursed for
the costs of his annual participation in a comprehensive executive
health assessment at a leading medical institution of his choice.
(b) Supplemental Executive Retirement Plan. A Supplemental Executive
Retirement Plan ("SERP") will be developed and made available to the
Executive prior to the end of 2004. The SERP is intended to provide
an enhanced benefit to the Executive should he leave the Company
after 8 full years of service, taking into account the time the
Executive has heretofore been employed by the Company, provided that
if the Executive's employment is terminated for any reason (other
than by the Company for Cause or by the Executive other than for Good
Reason or Disability) prior to the Executive obtaining 8 full years
of service, the Executive shall be deemed to have obtained 8 full
years of services immediately prior to the Date of Termination.
Details of the SERP will be communicated to
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the Executive when the SERP is finalized and approved by the Board of
Directors. The Board intends to make the SERP reasonable in value and
expense, and tax efficient.
(c) Vacation and Sick Leave. The Executive shall be entitled to vacation
and sick leave in accordance with the vacation and sick leave
policies adopted by the Company from time to time, provided that the
Executive shall be entitled to no less than five (5) weeks of paid
vacation each calendar year. Any vacation shall be at such time and
for such periods as shall be mutually agreed upon between the
Executive and the Company. The Executive shall be entitled to all
public holidays observed by the Company.
8. Applicable Taxes. There shall be deducted from any compensation
payments made under this Agreement any federal, state, and local
taxes or other amounts required to be withheld under applicable law.
9. Miscellaneous Benefits. During the Employment Term, the Executive
shall be entitled to perquisites at least as favorable as those
provided other senior executives of the Company. In all events, the
Company shall provide the Executive with the following additional
benefits:
(a) Business Travel and Expenses. Executive shall be reimbursed by
the Company for reasonable and other business expenses, as
approved by the Company, that are incurred and accounted for in
accordance with the Company's normal practices and procedures
for reimbursement of expenses.
(b) Executive Driver. In order to ensure the accessibility and
safety of the Executive during the Employment Term, the Company
will reimburse the Executive for the
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costs of an executive driver for business purposes only
(including transportation to and from work). The Company shall
directly cover the costs of all other business-related
transportation.
(c) Relocation Expenses. The Company shall reimburse the Executive
limited relocation expenses, to include home sale, purchase and
moving expenses, but not including third party buy-out of
existing residence, in accordance with the Company's relocation
policy if the Executive moves within the greater New York/New
Jersey area prior to the expiration of the initial Employment
Term on December 31, 2006.
(d) Non-Exclusivity. Nothing in this Agreement shall prevent the
Executive from being entitled to receive any additional
compensation or benefits as approved by the Company's Board of
Directors; provided, however, that in no event shall the
Company make any loans to Executive that are in violation of
the Sarbanes-Oxley Act of 2002, as such act may be amended or
supplemented from time to time, and the rules and regulations
of the Securities and Exchange Commission promulgated
thereunder.
10. Termination of Employment. Notwithstanding any other
provisions of this Agreement to the contrary, the employment of
the Executive pursuant to this Agreement may be terminated as
follows:
(a) Termination by the Company for Cause. Executive may be
terminated for "Cause" by the Company as provided below. As
used herein, the term "Cause" shall mean (i) conviction of the
Executive for a felony; or (ii) the commission by the Executive
of fraud or theft against, or embezzlement from, the Company.
For
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purposes of this section, no act or failure to act on
Executive's part shall be considered to be reason for
termination for Cause if done, or omitted to be done, by
Executive in good faith and with the reasonable belief that the
action or omission was in the best interests of the Company.
Cause shall not exist unless and until there shall have been
delivered to the Executive a copy of a resolution, duly adopted
by the affirmative vote of not less than two thirds of the
entire membership of the Board at a meeting of the Board held
for the purpose (after no less than ten (10) days' prior
written notice to the Executive of such meeting and the purpose
thereof and an opportunity for him, together with his counsel,
to be heard before the Board at such meeting), of finding that
in the good faith opinion of the Board, the Executive was
guilty of the conduct set forth above in this Section 10(a) and
specifying the particulars thereof in detail. The Date of
Termination shall be the date the Board resolution specified
herein is delivered to the Executive. Anything herein to the
contrary notwithstanding, if, following a termination of the
Executive's employment by the Company for Cause based upon the
conviction of the Executive for a felony, such conviction is
overturned in a final determination on appeal, the Executive
shall be entitled to the payments and the economic equivalent
of the benefits the Executive would have received if his
employment had been terminated by the Company without Cause.
(b) Disability. The Executive's employment may be terminated by the
Company or the Executive upon the Executive's Disability. For
purposes of this Agreement, "Disability" shall mean the
Executive's inability, due to physical or mental incapacity, to
substantially perform his duties for the Company for a period
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exceeding 120 consecutive days. Any question as to the
existence of the Disability of Executive as to which Executive
(or his guardian) and the Company cannot agree shall be
determined in writing by a qualified independent physician
mutually acceptable to Executive (or his guardian) and the
Company. If Executive (or his guardian) and the Company cannot
agree as to a qualified independent physician, each shall
appoint a physician and those two physicians shall select a
third who shall make such determination in writing. The
determination of Disability made by such medical doctor in
writing to the Company and Executive (or his guardian) shall be
final and conclusive for all purposes of the Agreement and the
Date of Termination shall be the date the notice of such
determination is delivered to the Executive.
(c) Death. The Executive's employment shall terminate upon his
death, and the date of his death shall be the Date of
Termination for purposes of this Agreement.
(d) Termination by the Executive for Good Reason. The Executive may
terminate his employment hereunder for "Good Reason," provided
that the Executive shall have delivered a Notice of Termination
within ninety (90) days after the occurrence of the event of
Good Reason giving rise to such termination. For purposes of
this Agreement, "Good Reason" shall not mean a termination
resulting from non-renewal of this Agreement. "Good Reason"
shall mean the occurrence of one or more of the following
circumstances, without the Executive's express written consent
(except in the case of a Change in Control as provided in
Section 10(d)(viii) hereof), and which are not remedied by the
Company within thirty (30)
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days of receipt of the Executive's Notice of Termination except
in the event of a Change in Control or a resignation pursuant
to clause (x) herein:
(i) an assignment to the Executive of any duties materially
inconsistent with his position, duties,
responsibilities, and status with the Company, or any
material limitation of the powers of the Executive not
consistent with the powers of the Executive
contemplated by Section 3 hereof;
(ii) any removal of the Executive from, or any failure to
appoint or elect, or re-elect, the Executive to any
position specified in Section 1 of this Agreement
(subject to the last sentence of Section 1);
(iii) any change of the Executive's title(s) as specified in
Section 1 of this Agreement;
(iv) the Company's requiring the Executive, without his
written consent, to be based at any office or location
more than 75 miles commuting distance from the
locations referred to in Section 4 of this Agreement;
(v) a reduction in the Executive's Base Salary or Annual
Bonus target incentive opportunity as in effect from
time to time, without his written consent;
(vi) the failure of the Company to continue in effect any
material Benefit Plan that was in effect on the
Effective Date or provide the Executive with
substantially equivalent benefits without his written
consent;
(vii) any other material breach by the Company of this
Agreement;
(viii) "Change in Control" as defined in Section 11(h) of this
Agreement (whether or not the Executive consents to
such Change in Control).
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(ix) the failure to appoint the Executive as Chief Executive
Officer of the Company no later than the 2004 Annual
Meeting of Shareholders or May 31, 2004 (whichever is
earlier);
(x) the occurrence of an irreconcilable difference with the
non-executive Chairman of the Board of Directors
(should such position be established) such that the
Executive is unable to effectively carry out the duties
and responsibilities undertaken by him under this
Agreement or as may hereafter be delegated to him by
the Company's Board of Directors consistent with his
duties as set forth in Section 3 hereof. For purposes
of this section, the Executive shall not have Good
Reason to resign unless he, in good faith and with the
reasonable and good faith belief that the circumstances
giving rise to such irreconcilable differences are not
capable of resolution, provides written notice to the
Board giving full details of the nature and
circumstances of the differences and what steps, if
any, have been taken to ameliorate such irreconcilable
differences and the Board fails to fully cure such
irreconcilable differences in a manner reasonably
satisfactory to the Executive within 30 days of receipt
of such written notice. If the Executive, acting in
good faith, is dissatisfied with the manner in which
the Board has attempted to cure the differences, a
meeting of the Board shall take place within 15 days of
the date of the notice from the Executive that he is
dissatisfied. At such meeting, the Executive shall,
together with his counsel, have an opportunity to be
heard before the Board. If following that meeting, the
Executive makes a good
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faith determination that the irreconcilable differences
still exist and have not been fully cured by the Board,
the Executive can terminate for Good Reason if he gives
the Board written notice of such intent and the Board
fails to fully cure the events giving rise to such
irreconcilable differences to the Executive's
satisfaction within seven (7) days of receipt of such
notice and the Date of Termination shall be the 7th day
after such notice is delivered to the Board. In no
event shall the Executive be permitted to claim an
irreconcilable difference based on any unlawful action
proposed or taken by the Executive; and
(xi) a failure of the Company to secure a written assumption
by any successor company as provided in Section 15(g)
hereof.
In the event of a termination for Good Reason, except as otherwise
provided herein, the Date of Termination shall be the date specified
in the Notice of Termination, and shall not be more than thirty (30)
days after the Notice of Termination.
(e) Other Terminations. Notwithstanding the foregoing, the Company
or the Executive may terminate the Executive's employment under
this Agreement at any time, subject to the provisions of
Section 10(f) hereof. If the Executive's employment is
terminated hereunder for any reason other than as set forth in
Sections 10(a) through 10(d) hereof, the date on which a Notice
of Termination is given or any later date (within 30 days) set
forth in such Notice of Termination shall be the Date of
Termination.
(f) Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or by the Executive shall
be communicated by written
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Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a
notice that shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the
provisions so indicated and a date of termination.
(g) Resignation. Upon the Date of Termination for any reason (other
than an expiration of the Employment Term), the Executive shall
be deemed to have resigned as a director and/or officer of the
Company; provided, however, that in the case of a non-renewal
by the Company of the initial Employment Term in accordance
with Section 2(a) hereof, the Date of Termination shall be
December 31, 2006.
11. Compensation upon Termination or During Disability.
(a) Disability. During any period ("Disability Period"), during the
Employment Term that the Executive fails to perform his duties
hereunder as a result of Disability, the Executive shall
continue to (i) receive his full Base Salary and bonus
otherwise payable for that period of the Employment Term
including the Disability Period and (ii) participate in the
Benefit Plans. In the event the Executive's employment is
terminated upon Disability (as defined in Section 10(b)
hereof), the Executive shall be entitled to: (1) the payments
and benefits provided in Section 11(e)(i), (ii) and (iii),
provided that the severance (Base Salary and Target Bonus) and
benefit continuation period shall be three years, (2) a
Pro-Rata Target Bonus (as defined herein) for the year in which
termination for
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Disability occurs, payable in a lump-sum within 30 days
following the Date of Termination, and any earned and unpaid
bonus relating to services performed by the Executive in the
year preceding his termination due to Disability, (3) immediate
vesting of all outstanding stock options, including the Option
Shares, with all vested stock options remaining exercisable for
the remainder of their original terms (and in the event there
are any restrictions on exercising such options after vesting,
the Executive shall be entitled to exercise any vested options
as of the earlier of (i) one year after the option shares
vested or (ii) one year after the Date of Termination).
Notwithstanding the foregoing, any cash payments made to the
Executive upon termination due to Disability shall be reduced
by the sum of the amounts, if any, payable to the Executive at
or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security
disability insurance program, where such amounts were not
previously applied to reduce any such payment (provided the
Company has paid the premiums associated with such plans). For
purposes hereof, "Pro-Rata Target Bonus" means the Executive's
Target Bonus for the year in which the Date of Termination
occurs multiplied by a fraction, the numerator of which is the
number of days in the year ending on the Executive's Date of
Termination and the denominator of which is 365.
(b) Death. If the Executive's employment hereunder is terminated as
a result of his death, then: (i) the Company shall pay the
Executive's estate or designated beneficiary, as soon as
practicable after the Date of Termination, a lump sum payment
equal to (1) any Base Salary installments due in the month of
death and
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any reimbursable expenses accrued or owing the Executive
hereunder as of the Date of Termination, (2) a Pro-Rata Target
Bonus (as defined in Section 11(a) hereof), payable in a
lump-sum within 30 days following the Date of Termination, and
any earned and unpaid bonus relating to services performed by
the Executive in the year preceding his death, and (3) the
severance benefits set forth in Section 11(e)(i), (ii) and
(iii) (provided that the severance (Base Salary and Target
Bonus) and benefit continuation period on which such lump-sum
payment is determined shall be three years), and (ii) all
outstanding stock options, earned shares of incentive stock,
and other awards granted to the Executive under the Incentive
Compensation Programs shall immediately become fully vested as
of the Date of Termination and all transfer restrictions shall
lapse and all vested stock options, including the Option
Shares, shall remain exercisable for the remainder of their
original terms (and in the event there are any restrictions on
exercising such options after vesting, the Executive shall be
entitled to exercise any vested options as of the earlier of
(i) one year after the option shares vested or (ii) one year
after the Date of Termination, provided that the Board may,
upon the written request of the Executive's personal
representative, waive or modify the restrictions on the
exercise of any vested stock options).
(c) Termination for Cause; Termination by the Executive other than
for Good Reason or Disability. If the Executive's employment
hereunder is terminated by the Company for Cause or by the
Executive (other than for Good Reason or Disability), then (i)
the Company shall pay the Executive, as soon as practicable
after the Date of Termination, any Base Salary and any
reimbursable expenses
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accrued or owing the Executive hereunder for services as of the
Date of Termination; and (ii) the Executive shall immediately
forfeit any unvested stock options. In the event of termination
by the Company for Cause, the Executive shall have the right to
exercise the vested unexercised portion of all outstanding
stock option and stock awards prior to the Date of Termination,
and the unexercised portion of any such award shall be
forfeited thereafter and shall remain subject to the terms of
each grant. In the event of termination by the Executive other
than for Good Reason, the Executive shall have the right to
exercise the vested unexercised portion of all outstanding
stock options then held by the Executive for such period
following the Date of Termination as shall be provided for
under the terms of each grant.
(d) Termination Resulting from Non-Renewal of this Agreement. If
this Agreement is not renewed in accordance with Section 2(a)
following the expiration of the initial Employment Term on
December 31, 2006, Executive shall be entitled to receive, in
addition to the payments due to him through the end of the
initial Employment Term (including a bonus for 2006 of no less
than the Target Bonus) his Base Salary and Target Bonus, as
established pursuant to Sections 5(a) and (b), in equal monthly
installments, and benefit continuation in accordance with
Section 11(e)(iii) for a period of 18 months following the end
of the initial Employment Term. In addition, any outstanding
stock options shall continue to vest in accordance with their
terms as if the Executive remained employed until the end of
this 18-month severance period, with all vested options
remaining exercisable for the remainder of their original terms
(and in the event there are any restrictions
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on exercising such options after vesting, the Executive shall
be entitled to exercise any vested options at the earlier of
(i) one year after the option shares vested or (ii) one year
after the Date of Termination).
(e) All Other Terminations. The Executive's employment may be
terminated without Cause by the Board or the Company or by the
Executive for Good Reason, provided that in such event:
(i) Executive shall be entitled to receive, in equal monthly
installments, his Base Salary and Target Bonus as
established pursuant to Sections 5(a) and (b) of this
Agreement, for the greater of (x) the remaining period
of the Employment Term or (y) for a period of two (2)
years, provided that if the Executive terminates
pursuant to Section 10(d)(viii) hereof or if the
Executive's employment is terminated without Cause or
for Good Reason within 90 days prior to a Change in
Control or within two (2) years following a Change in
Control (as hereinafter defined), the Executive shall be
entitled to a lump-sum amount equal to three (3) times
Base Salary and Target Bonus, payable within 30 days
following the Change in Control.
(ii) Executive shall be entitled to receive, in monthly
installments (net of appropriate withholding), for the
remaining period of this Agreement or in a lump sum if
the proviso in clause (i) of this Section 11(e) applies,
his target Annual Bonus Award (including the stock and
cash components) earned during the Employment Term of
this Agreement and any earned and unpaid bonus relating
to services performed by the Executive in the year
preceding his termination by the Company without Cause
or his
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termination for Good Reason provided that the bonus
payment pursuant to this Section 11(e)(ii) shall not
duplicate any bonus payments previously paid to the
Executive;
(iii) The Executive and his eligible dependents shall be
entitled to continue participation in the Company's
Benefit Plans at the same cost as other Company senior
executives until the second anniversary of the Date of
Termination (or the third anniversary of such date if
the proviso in clause (i) of this Section 11(e) applies)
or until such time as the Executive and his eligible
dependents are covered by a successor employer's
comparable benefit plans, whichever is sooner; provided
that to the extent that any Benefit Plan does not permit
continuation of the Executive's or his eligible
dependents' participation throughout such period, the
Company shall provide the Executive, no less frequently
than quarterly in advance, with an amount which is equal
to the Company's cost of providing such benefits;
(iv) Any outstanding stock options shall continue to vest
until the second anniversary of the Date of Termination
(or the third anniversary of such date if the proviso in
clause (i) of this Section 11(e) applies), with all
vested options remaining exercisable for the remainder
of their original terms (and in the event there are any
restrictions on exercising such options after vesting,
the Executive shall be entitled to exercise any vested
options as of the earlier of (i) one year after the
option shares vested or (ii) one year after the Date of
Termination).
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(f) Other Severance Provisions. In the event of any
termination, the Executive shall be entitled to any
other payments, benefits or rights in accordance with
this Agreement or any applicable plan, program, policy,
arrangement of, or other agreements with, the Company or
any affiliate (provided that in no event shall the
Executive be entitled to duplication of any payment or
benefit).
(g) Change in Control Protections and Excise Tax Gross-Up.
(i) Upon a Change in Control, the Executive's
outstanding equity awards (including, but not
limited to, stock options) shall immediately vest
and all vested stock options shall remain
exercisable for the remainder of their original
terms (provided that any restrictions on
exercising such stock options shall lapse).
(ii) In the event that the Executive receives any
payment or benefit (including but not limited to
the payment, or benefits pursuant to Section 11 of
this Agreement) (a "Payment") that is subject to
the excise tax (the "Excise Tax") under Section
4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), the Company shall pay to the
Executive, as soon thereafter as practicable, an
additional amount (a "Gross-Up Payment") such that
the net amount retained by the Executive, after
deduction of any Excise Tax imposed upon the
Payment and any federal, state, and local income
tax and Excise Tax imposed upon the Gross-Up
Payment, shall be equal to the Payment. The
determination of whether an Excise Tax is due in
respect to any payment or benefit, the amount of
the Excise Tax and the amount of the Gross-Up
Payment shall be made by an independent auditor
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(the "Auditor") jointly selected by the Company
and the Executive and paid by the Company. If the
Executive and the Company cannot agree on the firm
to serve as the Auditor, then the Executive and
the Company shall each select one nationally
recognized accounting firm and those two firms
shall jointly select one nationally recognized
accounting firm to serve as the Auditor.
Notwithstanding the Payment, (i) any other
payments or benefits received or to be received by
the Executive in connection with a Change in
Control or the Executive's termination of
employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement, or
agreement with the Company, any person whose
actions result in a Change in Control or any
person affiliated with the Company or such person)
shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and
all "excess parachute payments" within the meaning
of Section 280G of the Code shall be treated as
subject to the Excise Tax, unless in the opinion
of the tax counsel selected by the Auditor, such
other payments or benefits (in whole or in part)
do not constitute parachute payments, or are
otherwise not subject to the Excise Tax, and (ii)
the Executive shall be deemed to pay federal
income tax at the highest marginal rate applicable
in the calendar year in which the Gross-Up Payment
is made, and state and local income taxes at the
highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date
of Termination, net of the maximum reduction in
federal income tax which could be obtained from
deduction of such state
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and local taxes. In the event the actual Excise
Tax or such income tax is more or less than the
amount used to calculate the Gross-Up Payment, the
Executive or the Company, as the case may be,
shall pay to the other an amount reflecting the
actual Excise Tax or such income tax.
(h) Change in Control. For purposes of this Agreement, "Change
in Control" of the Company shall be deemed to have
occurred if:
(i) the Company's shareholders approve any transaction
that is contemplated to result in a "Qualifying
Merger or Consolidation," sale or disposition of
all or substantially all of the Company's assets
or business or a plan of partial or complete
liquidation, share exchange, amalgamation,
recapitalization or similar transaction and such
transaction is completed substantially in
accordance with the terms approved by the
shareholders; provided that notwithstanding
anything to the contrary in this subsection
(h)(i), no such merger, consolidation, sale or
disposition shall be deemed to constitute a
"Change in Control" if such transaction or series
of transactions requires the Executive to be
identified in any United States securities law
filing solely as a result of his being a "person"
(as such term is used in Section 3(a)(9) and 13(d)
of the Act) or a member of any "group" (as defined
in Section 14(d)(2) of the Act) acquiring, holding
or disposing of beneficial ownership of the
Company's securities and/or assets (but excluding
any filing such as a Form 4 required as a result
of being an officer or shareholder of the Company)
and effecting a "Change in Control" as defined in
this subclause (h)(i); or
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(ii) during any period of not more than two (2)
consecutive years (not including any period prior
to the date of this Agreement), individuals who at
the beginning of such period constitute the Board
of Directors of the Company, and any new director
(other than a director designated by a "person"
(as hereinabove defined) who has entered into an
agreement with the Company to effect a transaction
described in clause (i), (iii) or (iv) of this
Section) whose election was approved in a
resolution of the Board by Executive or whose
election by the Board or nomination for election
by the Company's stockholders was approved by a
vote of at least a majority of the directors then
still in office who either were directors at the
beginning of the period or whose election or
nomination for election was previously so approved
(including approval by Executive in a resolution
of the Board), cease for any reason to constitute
at least a majority of the Board; or
(iii) any third-party (or any third parties acting as a
"group," as defined herein) acquires beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Act) of securities
representing at least 40% of the Company's Voting
Power in a transaction that is not part of a
Qualifying Merger or Consolidation (a "Share
Acquisition") and subsequent to such Share
Acquisition either (1) the Company is no longer a
public company for U.S. securities law purposes,
or (2) there is a material diminution of the
Executive's position, duties or responsibilities
(including, without limitation, a termination of
the Executive's employment by the Company)
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or any other breach of this Agreement by the
Company or event giving rise to a Good Reason
termination by the Executive. Notwithstanding the
provisions of the immediately preceding sentence,
in the event that the Executive ceases to be the
CEO within the 90-day period prior to the Share
Acquisition as a result of the termination of his
employment by the Company without Cause or by the
Executive for Good Reason, the provisions of
clause (1) and (2) shall not apply.
(iv) For purposes of this Section (h), (x) "Qualifying
Merger or Consolidation" shall mean any of the
following: (1) any merger or consolidation between
the Company or a subsidiary thereof and any entity
in which the surviving entity (whether or not the
Company) is not a publicly traded entity and the
Executive is not CEO of the publicly traded parent
(if any) of the surviving entity, (2) any merger
or consolidation between the Company or any
subsidiary thereof and any entity in which the
surviving entity (whether or not the Company) is
publicly traded and the Executive is not CEO of
such surviving entity, or (3) any merger or
consolidation between the Company or a subsidiary
thereof and any entity if the shareholders of the
Company immediately prior to the merger or
consolidation hold, directly or indirectly, less
than 50% of the Voting Power of the Company (or
the ultimate parent corporation of the Company)
(there being excluded from the number of shares
held by such shareholders, but not from the Voting
Shares of the combined company, any shares
received by Affiliates of such other company in
exchange for stock of such other company)
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immediately after such merger or consolidation,
(x) "Voting Power" means the total voting power of
all outstanding securities having general voting
power to elect the directors of the specified
corporation, (y) "Act" means the Securities
Exchange Act of 1934, as amended and (z)
"Affiliate" means a person or other entity that
directly or indirectly controls, is controlled by,
or is under common control with, the company with
respect to which the transaction is taking place.
12. Non-Solicitation and Non-Competition.
(a) Term of Non-Compete. Subject to Section 12(d), during
his employment with the Company and for a period of one
(1) year following the Date of Termination, the
Executive will not provide services, in any capacity,
whether as an employee, consultant, independent
contractor, or otherwise, to any person or entity that
provides products or services that compete with the
Business of the Company, including but not limited to:
Laboratory Corporation of America Holdings, Inc.; Mayo
Laboratory; ARUP; LabOne; Specialty Labs Inc.; Bio
Reference Laboratories; Focus Technologies; ENZO, Inc.;
Ameripath; and Esoterix; or their successors or assigns,
except that after the termination of Executive's
employment this restriction shall only apply to North
America. If so requested in writing by Executive, the
Company shall advise the Executive promptly in writing
in advance (but in no case later than 30 calendar days)
as to whether, in the exercise of its reasonable
judgment, the Company views any proposed activity
contemplated by the Executive as constituting a
competing "Business," provided that nothing herein shall
prevent the Executive from, after the termination of his
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employment, being a passive owner of not more than five
percent (5%) of the outstanding stock of any class of a
corporation that is publicly traded.
(b) Term of Non-Solicitation of Customers. Subject to
Section 12(d), for a period of one (1) year following
the Date of Termination, the Executive will not directly
or indirectly solicit the Business of any customer of
the Company during the one (1) year period prior to the
termination of the employment relationship with the
Company for any purpose other than to obtain, maintain
and/or service the customer's Business for the Company.
(c) Term of Non-Solicitation of Employees. Subject to
Section 12(d), for a period of one (1) year following
the Date of Termination, the Executive agrees not to,
directly or indirectly, recruit, solicit or hire any
employees of the Company to work for the Executive or
any other person or entity.
(d) Term of Non Compete, Non Solicitation Automatically
Extended. Notwithstanding the provisions of Sections
12(a), 12(b), and 12(c), in the event that the term of
Executive's employment under this Agreement is not
extended beyond the initial Employment Term and the
Executive is receiving severance pursuant to Section
11(d) hereof, the period of (1) one year referred to in
the said Sections shall automatically be deemed to be 18
(eighteen) months following the expiration of the
initial Term on December 31, 2006.
(e) Definitions Applicable to Section 12. As used in this
Section, the following terms shall have their respective
definitions:
(i) "Business" shall include (A) clinical laboratory,
pathology, toxicology, pharmaceutical testing,
clinical trials, (B) Clinical Laboratory Medical
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Information Services, (C) clinical laboratory
testing kits; and (D) any other product or service
which the Company planned, provided or discussed
during the (1) one; year period prior to the
termination of Executive's employment.
(ii) "Clinical Laboratory Medical Information Services"
shall mean medical information services which
contain a substantial clinical laboratory data
component.
(iii) "Indirectly solicit" shall include, but is not to
be limited to, providing any of the Company's
proprietary information to another individual, or
entity, or allowing the use of Executive's name by
any company (or any employees of any other
company) other than the Company, in the
solicitation of the Business of Company's
customers.
(f) Expedited Arbitration Applicable to Section 12. In the
event there is a dispute under this Section, the parties
agree to hold an expedited hearing in the City of New
York, New York, before an arbitrator under American
Arbitration Association Rules.
(g) Exclusive Property. Executive confirms that all
confidential information is and shall remain the
exclusive property of the Company. All business records,
papers and documents kept or made by Executive relating
to the business of the Company, its affiliates and
subsidiaries (other than his personal records) shall be
and remain the property of the Company. Upon the
termination of his employment with the Company or upon
the request of the Company at any time, Executive shall
promptly deliver to the Company, and shall not without
the
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consent of the Board retain copies of, any written
materials not previously made available to the public,
or records and documents made by Executive in his
possession concerning the business or affairs of the
Company or any of its affiliates or subsidiaries (other
than his personal records); provided, however, that
subsequent to any such termination, the Company shall
provide Executive with copies (the cost of which shall
be borne by Executive) of any documents that are
requested by Executive and that Executive has determined
in good faith are (i) required to establish a defense to
a claim that Executive has not complied with his duties
hereunder or (ii) necessary to Executive in order to
comply with applicable law.
(h) Injunctive Relief. Without intending to limit the
remedies available to the Company, Executive
acknowledges that a breach of any of the covenants
contained in this Section 12 may result in material
irreparable injury to the Company or its affiliates or
subsidiaries for which there is no adequate remedy at
law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled
to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining
Executive from engaging in activities prohibited by this
Section 12 or such other relief as may be required to
specifically enforce any of the covenants in this
Section 12. Executive hereby agrees that the Company
shall not be required to post any bond or other security
in connection with any such equitable relief. Without
intending to limit the remedies available to Executive,
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Executive shall be entitled to seek specific performance
of the Company's obligations under this Agreement.
13. Arbitration. In the event of any difference of opinion or
dispute between the Executive and the Company with respect to
the construction or interpretation of this Agreement or the
alleged breach thereof, which cannot be settled amicably by
agreement of the parties, then such dispute shall be submitted
to and determined by arbitration by a single arbitrator in the
city of New York, New York in accordance with the rules then in
effect of the Commercial Arbitration Panel of the American
Arbitration Association (the "AAA"), and judgment upon the
award rendered shall be final, binding and conclusive upon the
parties and may be entered in the highest court, state or
federal, having jurisdiction. Each party shall bear its own
costs and expenses of the arbitration, including its own
attorneys' fees, and its allocable share of the costs and
expenses of the arbitrator.
14. Confidentiality. During the Employment Term, and except as
otherwise required by law, the Executive shall not disclose or
make accessible to any business, person or entity, or make use
of (other than in the course of the business of the Company)
any trade secrets, proprietary knowledge or confidential
information, which he shall have obtained during his employment
by the Company and which shall not be generally known to or
recognized by the general public. All information regarding or
relating to any aspect of either the Company's business,
including but not limited to that relating to existing or
contemplated business plans, activities or procedures, current
or prospective clients, current or prospective contracts or
other business arrangements, current or prospective products,
facilities and methods, manuals, intellectual property, price
lists, financial information (including the revenues, costs, or
profits associated with any of the
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Company's products or services), or any other information
acquired because of the Executive's employment by the Company,
shall be conclusively presumed to be confidential; provided,
however, that: Confidential Information shall not include any
information known generally to the public; (other than as a
result of unauthorized disclosure by the Executive) or any
specific information or type of information generally not
considered information disclosed by the Company or any officer
thereof to a third party without restrictions on the disclosure
of such information. The Executive's obligations under this
Section 14 shall be in addition to any other confidentiality or
nondisclosure obligations of the Executive of the Company at
law or under any other agreements.
15. Other Matters.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Executive relating
to the subject matter hereof, and supersedes any
previous agreements, commitments and understandings,
written or oral, with respect to the matters provided
herein other than any equity award agreements. As used
in this Agreement, terms such as "herein," "hereof,"
"hereto" and similar language shall be construed to
refer to this entire instrument and not merely the
paragraph or sentence in which they appear, unless so
limited by express language. Notwithstanding the
foregoing, if this Agreement is terminated in accordance
with Section 2(b) hereof, the Letter Agreement shall
remain in full force and effect. In the event of any
inconsistency between this Agreement and the provisions
of any plan, policy, program, arrangement or other
agreement, the provisions most favorable to the
Executive shall control.
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(b) Assignment. Except as set forth below, this Agreement
and the rights and obligations contained herein shall
not be assignable or otherwise transferable by either
party to this Agreement without the prior written
consent of the other party to this Agreement.
Notwithstanding the foregoing, any amounts owing to the
Executive upon his death shall inure to the benefit of
his heirs, legatees, personal representatives, executor
or administrator.
(c) Notices. Any and all notices provided for under this
Agreement shall be in writing and hand delivered or sent
by first class registered or certified mail, postage
prepaid, return receipt requested, addressed to the
Executive at his residence (with a copy to the Law
Offices of Joseph E. Bachelder, 780 Third Avenue, New
York, New York 10017, Attn: Joseph E. Bachelder, Esq.)
or to the Company at its usual place of business, and
all such notices shall be deemed effective at the time
of delivery or at the time delivery is refused by the
addressee upon presentation.
(d) Amendment/Waiver. No provision of this Agreement may be
amended, waived, modified, extended or discharged unless
such amendment, waiver, extension or discharge is agreed
to in writing signed by both the Company and the
Executive.
(e) Applicable Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed,
interpreted, and enforced in accordance with the laws of
the State of New York (applicable to contracts to be
performed wholly within such State).
(f) Severability. The Executive hereby expressly agrees that
all of the covenants in this Agreement are reasonable
and necessary in order to protect the Company and
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its business. If any provision or any part of any
provision of this Agreement shall be invalid or
unenforceable under applicable law, such part shall be
ineffective only to the extent of such invalidity or
unenforceability and shall not affect in any way the
validity or enforceability of the remaining provisions
of this Agreement, or the remaining parts of such
provision.
(g) Successor in Interest. In the event the Company merges
or consolidates with or into any other corporation or
corporations, or sells or otherwise transfers
substantially all of its assets to another corporation
or other entity, the provisions of this Agreement shall
be binding upon and inure to the benefit of the entity
surviving or resulting from the merger or consolidation
or to which the assets are sold or transferred and,
prior to the consummation of any such event, the Company
shall obtain the express written assumption of this
Agreement by the other entity (other than in the case of
a merger after which the Company is the surviving
entity). All references herein to the Company refer with
equal force and effect to any corporate or other
successor of the entity that acquires directly or
indirectly by merger, consolidation, purchase or
otherwise, all or substantially all of the assets of the
Company.
(h) No Mitigation/No Offset. In the event of any termination
of employment, the Executive shall be under no
obligation to seek other employment, and there shall be
no offset against entitlements, amounts or benefits due
him under this Agreement or otherwise on account of any
remuneration attributable to any subsequent employer or
claims asserted by the Company or any affiliate.
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(i) Joint Participation in Drafting. Each party to this
Agreement has participated in the negotiation and
drafting hereof. As such, the language used herein shall
be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of
strict construction shall be applied against any party
to this Agreement.
16. Indemnification. The Company shall indemnify the Executive to
the full extent permitted by law and the By-laws of the Company
for all expenses, costs, liabilities and legal fees
(collectively, "Damages") that the Executive may incur in the
discharge of all his duties hereunder, including, without
limitation, the right to be paid in advance by the Company for
his expenses in defending a civil or criminal action,
proceeding or investigation prior to the final disposition
thereof. The Executive shall be insured under the Company's
Directors' and Officers' Liability Insurance Policy as in
effect from time to time. Notwithstanding any other provision
of this Agreement to the contrary, any termination of the
Executive's employment or of this Agreement shall have no
effect on the continuing operations of this Section 16.
17. Authority The execution, delivery and performance of this
Agreement has been duly authorized by the Company and this
Agreement represents the valid, legal and binding obligation of
the Company, enforceable against the Company according to its
terms.
[signature page to follow]
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[Employment Agreement Signature Page]
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its own behalf and has caused its corporate seal to be affixed, and
the Executive has executed this Agreement on his own behalf intending to be
legally bound, as of the date first written above.
QUEST DIAGNOSTICS INCORPORATED
By:
------------------------------------------
Kenneth W. Freeman
Chairman and Chief Executive Officer
ATTEST:
Secretary
EXECUTIVE
---------------------------------------------
Surya N. Mohapatra
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