Vice President, Finance Employment Agreement

EXHIBIT 10.25


EMPLOYMENT AGREEMENT


This EMPLOYMENT AGREEMENT is entered into as of September 1, 2000 by and between Specialty Laboratories, Inc., a California Company (the "Company"), and Bart E. Thielen ("Executive"), and is effective upon approval of the Compensation Committee of The Board of Directors.


1. DUTIES AND RESPONSIBILITIES.


A. Executive shall serve as the Company's Vice President, Finance and Treasurer or such other title or position as may be designated from time to time by the Company's Chief Executive Officer. Executive shall report to and perform the duties and responsibilities assigned to him by the Company's Chief Financial Officer, or such other person as may be designated by the Company's Board Of Directors.


B. Executive agrees to devote his full time and attention to the Company, to use his best efforts to advance the business and welfare of the Company, to render his services under this Agreement fully, faithfully, diligently, competently and to the best of his ability, and not to engage in any other employment activities.


C. Executive shall be based at the Company's office located in Santa Monica, California, but Executive shall be required to travel to other geographic locations in connection with the performance of his Executive duties.


2. PERIOD OF EMPLOYMENT.


A. Executive's employment with the Company shall be governed by the provisions of this Agreement for the period commencing September 1, 2000 and continuing until this Agreement terminates pursuant to written notification by either the Company or Executive, which notification may occur at any time for any reason. The period during which the Executive provides services to the Company pursuant to this Agreement shall be referenced in this Agreement as the "Employment Period."


3. CASH COMPENSATION.


A. Executive's initial Base Salary shall be One Hundred Forty Eight Thousand Dollars ($148,000) per year payable in accordance with the Company's standard payroll schedule. Executive's compensation shall be subject to periodic review by the Company, and may be increased or decreased in the Company's discretion.


B. For each fiscal year during the Employment Period, Executive shall be eligible for an incentive bonus in the Company's sole discretion. For each full fiscal year of employment, Executive shall be eligible for an incentive bonus of up to sixty (60%) of his annual base salary and his performance objectives shall be set such that 100% completion of his objectives shall entitle him to at least seventy-five percent (75%) of the bonus (or forty-five percent (45%) of his annual base salary) ("the Incentive Bonus"). During the first year of employment, Executive shall be eligible for a pro rata portion of the incentive bonus. The bonus


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amount will be based on the following factors: (1) the financial performance of the Company as determined and measured by the Company's Board of Directors, and (2) Executive's achievement of management targets and goals as set by the Company. The bonus amount is intended to reward contribution to the Company's performance over an entire fiscal year, and on the basis of continuing, cumulative contribution, and consequently will be paid only if Executive is employed and in good standing at the time of bonus payments, which generally occurs within 45 days after the close of the Company's fiscal year. Bonus determinations will be made in the Company's sole discretion.


C. The Company shall deduct and withhold from the compensation payable to Executive hereunder any and all applicable Federal, State and Local income and employment withholding taxes and any other amounts required or authorized by Executive to be deducted or withheld by the Company under applicable statutes, regulations, ordinances or orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages to employees.


4. EQUITY PARTICIPATION.


Separate from this Agreement and pursuant and subject to the terms and conditions of the Company's Stock Option Plan and Stock Option Agreement, Executive has been granted options to purchase Eighty Four Thousand Five Hundred Seventy Three (84,573) shares of the Company's common stock, which options vest over time. Any further options will be made pursuant and subject to the terms and conditions of the Company's stock option plan and stock option agreement.


5. EXPENSE REIMBURSEMENT.


In addition to the compensation specified in Paragraph 3, Executive shall be entitled, in accordance with the reimbursement policies in effect from time to time, to receive reimbursement from the Company for reasonable business expenses incurred by Executive in the performance of his duties hereunder, provided Executive furnishes the Company with vouchers, receipts and other details of such expenses in the form required by the Company sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of Federal and State taxing authorities.


6. FRINGE BENEFITS.


A. Executive shall, throughout the Employment Period, be eligible to participate in all group term life insurance plans, group health plans, accidental death and dismemberment plans and short-term disability programs and other Executive perquisites which are made available to the Company's Executives and for which Executive qualifies. Please refer to the Company's Employee Handbook and Summary Plan Descriptions for further information concerning these benefits.


B. Executive shall earn vacation time during the Employment Period at the rate of three weeks per year. Vacation shall accrue and be taken pursuant to the Company's vacation benefit policy set forth in the Company's Employee Handbook.


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7. SEVERANCE PAY FOR EXERCISE OF THE AT-WILL CLAUSE.


Notwithstanding any of the provisions of this Agreement, Executive's employment with the Company is at will, which means that it is not for a specific term and may be terminated by either the Company or Executive at any time, for any reason without advance notice. Similarly the Company may change the terms and conditions of Executive's employment at any time, for any reason, without advance notice.


Should the Company terminate Executive's employment for Cause, as defined below, the Company shall have no obligation to Executive under this Agreement other than for accrued but unpaid salary and vacation as of the date of termination. Should the Company terminate Executive's employment other than for ...