EXECUTION COPY

Tripath Imaging, Inc.
780 Plantation Drive
Burlington, NC 27215

Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes
, NJ 07417

September 8, 2006

Dr. Paul R. Sohmer, M.D.
c/o TriPath Imaging, Inc.
780 Plantation Drive
Burlington, NC 27215

Dear Paul:

     As you are aware, TriPath Imaging, Inc. (the “Company”), a Delaware corporation, is contemplating the sale to Becton, Dickinson and Company (the “Sale”) of the approximately 93.5% of the outstanding shares of the Company that Becton, Dickinson and Company (“BD”) does not already own. As a result of and following the Sale, the Company will become a wholly-owned subsidiary of BD.

     On behalf of the Company, I am pleased to offer you the opportunity to earn a retention bonus (the “Retention Bonus”) in connection with the successful completion of the Sale and your continued employment by the Company and its affiliates (the “BD Group”) for six (6) months following the completion of the Sale (such period, the “Retention Period”) (except as otherwise provided in Section II below), the terms of which are outlined below. In addition to your continued employment during the Retention Period, on the terms and conditions set forth in Exhibit A, you agree to provide consulting services to the BD Group for a minimum of six (6) months and a maximum of twelve (12) months following the end of the Retention Period.

     Notwithstanding anything herein to the contrary, in the event that the Sale does not occur on or before the six (6) month anniversary of the date of this letter agreement, this letter agreement will automatically terminate and be of no further force and effect and you will have no rights to earn the Retention Bonus hereunder after such time; provided, however, that in such event, the change in control agreement entered into with the Company, dated June 26, 2006 (the “Change in Control Agreement”) will continue in full force and effect.

 


 

Dr. Sohmer
September 8, 2006
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     In addition, if your employment is terminated by the Company without Cause within 180 days prior to the completion of the Sale and such termination (i) was at the request of BD or (ii) otherwise occurred as a condition to, or in anticipation of, the completion of the Sale, this letter agreement will automatically terminate and be of no further force and effect and the Change in Control Agreement will continue in full force and effect and will govern the payment of any benefits to you.

     This agreement is without prejudice to the success bonus (the “Success Bonus”) you will receive from the Company under the success bonus letter agreement entered into between you and the Company, dated September 8, 2006. The BD Group will provide you with a retention bonus opportunity after the completion of the Sale as follows:

I. RETAINED EMPLOYMENT

     You will continue to be employed by the Company following the completion of the Sale. The employment terms are described in Exhibit A, which is attached hereto and is hereby incorporated in its entirety as if set forth fully herein. Defined terms used herein have the same meanings as defined in Exhibit A. Likewise, terms defined in Exhibit A shall have the same meanings as defined herein.

II. RETENTION BONUS

     A. CALCULATION OF RETENTION BONUS.

     It is acknowledged that the Company’s fiscal year is the calendar year and, as such, the terms “calendar year” and “fiscal year” are used interchangeably throughout this letter agreement and the “fiscal” year referred to herein is the fiscal year of the Company, and not the BD fiscal year.

     The Retention Bonus shall be equal to $2,163,625.

     You agree that you will not be entitled to receive any bonus payment(s) in respect of the 2007 fiscal year of either the Company or BD.

     B. ELIGIBILITY FOR THE RETENTION BONUS.

     Subject to the successful completion of the Sale, you shall be eligible to receive the Retention Bonus and thus will be vested in the Retention Bonus upon either one of the following:

          1. If you are employed by the BD Group at the end of the Retention Period; or

          2. If your employment with the BD Group is terminated (i) due to death, (ii) by the BD Group without “Cause” (as defined below), or (iii) by you for “Good Reason” (as defined below), prior to the end of the Retention Period.

 


 

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September 8, 2006
Page 3

               (a) “Cause”. For the purpose of this letter agreement, the BD Group shall have “Cause” to terminate your employment upon:

                    (i) The willful and continued failure by you to substantially perform your duties with the BD Group (other than any such failure resulting from your incapacity due to physical or mental illness or any failure resulting from your terminating your employment with the BD Group for “Good Reason”);

                    (ii) Your willful gross misconduct or dishonesty, including fraud or embezzlement, related to the performance of your duties with the BD Group which would be reasonably likely to cause, as determined in good faith by the Board of Directors of BD (the “Board”): (A) a material adverse affect on the business or reputation of the BD Group, or (B) exposure of the BD Group to a material risk of civil or criminal legal damages, liabilities or penalties; or

                    (iii) Your conviction (or a plea of guilty or no contest) of a felony or a crime involving moral turpitude.

               (b) “Good Reason”. You may terminate your employment for Good Reason. For purposes of this letter agreement, “Good Reason” shall mean without your express written consent:

                    (i) A reduction by the BD Group in your base salary as set forth in Exhibit A;

                    (ii) Any requirement by the BD Group, inconsistent with the terms and conditions set forth in Exhibit A, that the location at which you perform your principal duties for the BD Group be changed to a new location that is more than 100 miles from the location at which you perform your principal duties for the Company immediately prior to the completion of the Sale;

                    (iii) The substantial and continuing reduction of your duties with the Company from those duties set forth on Exhibit A or a substantial and continuing requirement that you perform duties that are materially inconsistent with and which would have a material adverse impact on your title or duties from the title or duties set forth on Exhibit A, provided, however, that the transition of the duties set forth on Exhibit A to your replacement shall not be considered Good Reason under the terms of this letter agreement; or

                    (iv) The material diminution of your bonus opportunity under the bonus plan in place for the Company following the completion of the Sale.

               (c) Notice of Termination. Any termination (i) due to Disability, (ii) by the BD Group without Cause, or (iii) by you for Good Reason shall be communicated by written Notice of Termination to the other party hereto. For purposes of this

 


 

Dr. Sohmer
September 8, 2006
Page 4

letter agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this letter agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis of your termination under the provision so indicated. If you are terminating your employment for Good Reason, the Notice of Termination shall be delivered to BD with a copy to the Company within thirty (30) days following the date on which the facts and circumstances existed that gave rise to your right to terminate your employment for Good Reason and at least ten (10) business days prior to your proposed Date of Termination. Such notice shall indicate the specific provision or provisions in this letter agreement upon which you have relied to make such determination and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such determination. If the facts and circumstances that give rise to your right to terminate for Good Reason present a curable condition, the BD Group shall have ten (10) business days after receipt of the Notice of Termination to cure such condition.

               (d) Date of Termination. “Date of Termination” shall mean:

                    (i) If this letter agreement is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period);

                    (ii) If your employment is terminated by you for Good Reason, the date specified in the Notice of Termination, which shall be no less than ten (10) business days after the date on which the Notice of Termination is delivered; and

                    (iii) If your employment is terminated for any other reason, the date on which a Notice of Termination is given (or, if a Notice of Termination is not given, the date of such termination).

               (e) Disability. If you are unable to engage in any substantial gainful activity as a result of your incapacity due to a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, you shall be deemed “disabled” for purposes of this letter agreement by (A) the institution appointed by the BD Group to administer the Company’s long-term disability plan (or successor plan) for your benefit or, (B) in the absence of such an institution or in the event that you are not covered by a long-term disability plan of the BD Group, BD acting in good faith.

     C. PAYMENT OF RETENTION BONUS.

     The Retention Bonus shall be paid in a lump sum payment made to you on the six-month anniversary of the final day of the Retention Period; provided, however, that if you are terminated by the BD Group without Cause or if you resign for Good Reason prior to the end of the Retention Period, then the entire Retention Bonus shall be paid to you on the six-month anniversary of the applicable Date of Termination; provided, further, that, in the event that your

 


 

Dr. Sohmer
September 8, 2006
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employment with the BD Group is terminated due to death at any time during the Retention Period, your estate or applicable legal representatives shall receive the payment of the Retention Bonus as soon as practicable, and not later than 2 months after the Company is notified of your death. Additionally, in the event of your termination due to death, your eligible dependents may elect to continue their health care benefits under COBRA.

III. TERMINATION OF EMPLOYMENT

     A. TERMINATION DUE TO DISABILITY.

     If, during the Retention Period, you shall fail to perform your duties hereunder as a result of incapacity due to Disability, you shall continue to receive your full base salary at the rate then in effect until your Date of Termination (and, if the Company maintains a long-term disability plan, you shall be eligible for coverage thereunder in accordance with the terms thereof and subject to the satisfaction of all applicable conditions, including without limitation, the timely filing of a notice of claim). You shall also be entitled to receive an amount equal to $41,384.

     B. TERMINATION BY THE BD GROUP FOR CAUSE

     If, during the Retention Period, your employment shall be terminated for Cause, the Company shall pay you for your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, and the Company shall have no further obligations to you under this letter agreement.

     C. ADDITIONAL PROVISIONS

     You shall not be required to mitigate the amount of any payment provided for in this letter agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this letter agreement be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise, except to the extent provided for herein.

     The payments and other benefits described in this letter agreement shall be the only payments you are to receive in the event of a termination of your employment following the completion of the Sale and you agree you shall not be entitled to any additional payments or benefits not otherwise described in this letter agreement.

     You hereby acknowledge and agree that you are not eligible to be a “Participant” in the TriPath Imaging, Inc. Employee Retention Plan. Any payments or benefits received under this letter agreement shall not be taken into account for purposes of determining benefits under any other employee benefit plan of the BD Group, except to the extent required by law, or as otherwise expressly provided by the terms of such other plan.

 


 

Dr. Sohmer
September 8, 2006
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     You hereby acknowledge and agree that you are not eligible for any additional payment in the event it is determined that any payment or benefit received or to be received by you (whether paid or payable or distributed or distributable or provided pursuant to the terms of this letter agreement or otherwise) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by you with respect to such excise tax.

IV. MISCELLANEOUS PROVISIONS

     A. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

     You, by your execution hereof (i) hereby irrevocably submit to the exclusive jurisdiction of the federal courts (or, to the extent jurisdiction is not permitted, the state courts) of the State of New York for the purpose of any claim or action arising out of or based upon this letter agreement or relating to the subject matter hereof, (ii) hereby waive, to the extent not prohibited by applicable law, and agree not to assert by way of motion, as a defense or otherwise, in any such claim or action, any claim that you are not subject personally to the jurisdiction of the above-named courts, that your property is exempt or immune from attachment or execution, that any such proceeding brought in the above-named court is improper, or that this letter agreement or the subject matter hereof may not be enforced in or by such courts, and (iii) hereby agree not to commence any claim or action arising out of or based upon this letter agreement or relating to the subject matter hereof other than before the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such claim or action to any court other than the above-named courts whether on the grounds of inconvenient forum or otherwise. You hereby consent to service of process in any such proceeding in any manner permitted by New York law, and agree that service of process by registered or certified mail, return receipt requested, at your address specified on the first page hereof is reasonably calculated to give actual notice. You hereby irrevocably waive any right to a trial by jury in any action, suit, or other proceeding arising under or relating to any provisions of this letter agreement.

     B. OBLIGATIONS FOLLOWING THE COMPLETION OF THE SALE.

     You and the Company have previously entered into a Non-Competition Agreement (the “Non-Competition Agreement”) and an Employee Non-Disclosure and Inventions Agreement dated June 2, 2000 (the “NDA”; the Non-Competition Agreement and the NDA collectively referred to as the “Prior Agreements”) both attached hereto on Schedule A, which impose upon you certain obligations including, but not limited to, non-competition with the Company, non-solicitation of employees and customers and confidentiality of Company information. Such Prior Agreements shall remain in full force and effect upon the execution of this Letter Agreement except that they shall be superseded by this letter agreement during the Retention Period. If the Retention Period expires and you remain employed by BD thereafter, this letter agreement shall have terminated and the Prior Agreements and their terms shall continue to govern your obligations during and following termination of your employment. Notwithstanding

 


 

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September 8, 2006
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anything herein to the contrary, your right to receive any payments or benefits under this letter agreement shall be conditioned upon and subject to your compliance with your obligations as described in this Section IV, which obligations shall survive the termination or expiration of this letter agreement according to their respective terms. You hereby agree that any breach of the provisions of this Section IV by you, will entitle BD to terminate this letter agreement and to cease all payments and benefits hereunder. Any payments you may receive pursuant to the Prior Agreements shall offset on a dollar for dollar basis any obligations of the BD Group to make payments to you under this letter agreement.

          1. Confidentiality.

               (a) Proprietary Information. In the course of your service to the BD Group, you will have access to confidential intellectual property, confidential specifications, know-how, inventions, testing methods, strategic or technical data, marketing research data, product research and development data, manufacturing techniques, financial performance, confidential customer lists, costs, sources of supply and trade secrets, names and addresses of the people and organizations with whom the BD Group have business relationships and such relationships, and special needs of customers of the BD Group, as well as other confidential business information, all of which are confidential and may be proprietary and are owned or used by the BD Group. Such information shall hereinafter be called “Proprietary Information” and shall include any and all items enumerated in the preceding sentence and coming within the scope of the business of the Company or its affiliates as to which you may have access, whether conceived or developed by others or by you alone or with others during the period of your service to the BD Group, whether or not conceived or developed during regular working hours. The term “Proprietary Information” also shall be deemed to include comparable information that the BD Group has received belonging to others or which was received by the BD Group with any understanding that it would not be disclosed. Proprietary Information may be contained in various media, including without limitation, patent applications, computer programs in object and/or source code, flow charts and other program documentation, manuals, plans drawings, designs, technical and scientific specifications, laboratory notebooks, supplier and customer lists, internal financial and business data and other documents and records of the BD Group. Proprietary Information shall not include any information which (I) is in the public domain prior to the execution of the NDA and this letter agreement, (II) entered the public domain after the time of its disclosure under the NDA or this letter agreement through means other than an unauthorized disclosure resulting from an act or omission by you, (III) was independently developed or discovered by you prior to the time of disclosure under the NDA, or (IV) is required to be disclosed to comply with applicable laws or regulations, or with a court or administrative order, provided that BD is notified prior to such disclosure and has the opportunity to take any actions it deems appropriate to obtain confidential treatment for such disclosure and, if possible, to minimize the extent of such disclosure.

               (b) You shall not during the term of your employment with the BD Group or any time thereafter, regardless of the reason for termination of your employment (x)

 


 

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September 8, 2006
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disclose, directly or indirectly, any Proprietary Information to any person other than the Company or authorized employees thereof at the time of such disclosure, or such other persons to whom you have been specifically instructed to make disclosure by management of BD and in all such cases only to the extent required in the course of your service to the BD Group or (y) use any Proprietary Information, directly or indirectly, for your own benefit or for the benefit of any other person or entity.

               (c) All notes, letters, documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the BD Group and any copies, in whole or in part, thereof (collectively, the “Documents”), whether or not prepared by you, shall be the sole and exclusive property of the BD Group. You shall safeguard all Documents and shall surrender to BD at the time your employment terminates, or at such earlier time or times as management of BD may specify, all Documents then in your possession or control.

          (2) Non-Competition; Non-Hire; Non-Solicitation.

               (a) During the term of your employment and for a period of three years commencing on the date of your termination of employment by the BD Group without Cause or by you for Good Reason (the “Restricted Period”), you will not engage or participate in, directly or indirectly, as principal, agent, employee, employer, consultant, investor or partner, or assist in the management of, or own any stock or any other ownership interest in (excluding ownership of not more than one (1%) percent of the voting stock of any publicly held corporation), any business which is Competitive with the Company or any company in the BD Group that engages in the same business as the Company (such companies shall collectively be referred to as the “Restricted Group”).

               (b) A business shall be considered “Competitive with the Restricted Group” if, as of the Date of Termination, it is engaged in any business, venture or activity, or is developing any product, in the Restricted Area (as defined below) which competes, plans to compete or upon commercialization, would compete, with any business, product, venture or activity (x) being conducted or developed by any member of the Restricted Group or (y) proposed to be conducted by the Company (as evidenced by any internal written business plans or memoranda of the Company).

               (c) The “Restricted Area” shall mean the United States of America, Canada, and any other geographic area where, determined as of the Date of Termination, (x) the Restricted Group is conducting or developing, or (y) the Company has proposed to conduct (as evidenced by any internal written business plans or memoranda of the Company), any business, venture or activity.

               (d) During the term of your employment and during the Restricted Period, you will not hire any officer, director, consultant, executive or employee of the Restricted Group, nor will you solicit or attempt to solicit any such person to leave his or her engagement

 


 

Dr. Sohmer
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with the Restricted Group. During the term of your employment and during the Restricted Period, you will not call upon, solicit, divert or attempt to solicit or divert from the Restricted Group any of their customers or suppliers or potential customers or suppliers of whose names you were made aware through your employment with the BD Group.

               (e) During the Restricted Period you shall notify BD with a copy to the Company of any change of address and of any subsequent employment (stating the name and address of the employer and the nature of the position) or any other business activity.

          (3) Non-Disparagement. During the term of your employment and for five (5) years thereafter, you shall not disparage, deprecate, or make any comments or take any other actions, directly or indirectly, that could reflect adversely on the BD Group or its officers, directors, employees or agents or adversely affect their business reputation or goodwill.

          (4) Release and Waiver of Claims. Upon your termination of employment by the BD Group without Cause or by you for Good Reason, and in consideration of the benefits and covenants provided to you under the terms of this letter agreement, you hereby agree to execute the Release and Waiver of Claims attached hereto as Exhibit B.

     C. CONFLICT AMONG AGREEMENTS OR BENEFIT PLANS.

     In the event of any conflict between the provisions of this letter agreement and the terms of any other agreement, including, without limitation, the Change in Control Agreement and the Prior Agreements (except to the extent provided herein) or any benefit plan under which you are entitled to receive payments or benefits, or any agreement, instrument, other document or undertaking between you and the BD Group, unless otherwise specifically provided herein, the provisions of this letter agreement shall control.

     D. DEDUCTION; WITHHOLDING; SET-OFF.

     Notwithstanding any other provision of this letter agreement, any payments or benefits hereunder shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company reasonably determines it should withhold pursuant to any applicable law or regulation. The amounts due and payable under this letter agreement shall at all times be subject to the right of set-off of the Company for any amounts or debts incurred and owed by you to the BD Group whether during your employment or after the Date of Termination.

     E. LEGAL FEES.

     If any contest or dispute shall arise between you and the Company regarding or as a result of any provision of this letter agreement, the Company shall reimburse you for all reasonable attorney’s fees and legal expenses incurred by you up to a maximum of $75,000 in connection with such contest or dispute, but only if you are successful with respect to substantially all of

 


 

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your material claims pursued or defended in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the final adjudication (not subject to further appeal) by a court or arbitrator, or by settlement of the dispute to the extent that the Company receives reasonable written evidence of such fees and expenses.

     F. LITIGATION AND REGULATORY COOPERATION.

     You agree to cooperate fully with the Company or any related entity in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company or any related entity that relate to events or occurrences that transpired during your employment and consultancy with the BD Group. Your full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the BD Group at mutually convenient times. In scheduling your time to prepare for discovery or trial, the BD Group shall attempt to minimize interference with any other employment obligations that you may have. You also shall cooperate with the BD Group in connection with any investigation or review of any foreign, federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while you were employed by the BD Group. The Company shall reimburse you for any reasonable out-of-pocket expenses incurred in connection with any litigation and regulatory cooperation provided under this Section V(F) after your Date of Termination. In the event that you are named personally in any legal proceeding relating to your activities on behalf of the BD Group, you will be eligible for indemnification by the Company to the extent permitted by the Company’s by-laws and other governance documents, as well as the Company’s liability insurance policies, as in effect at the time you make a claim for indemnification.

     G. NOTICE.

     For the purpose of this letter agreement, notices and all other communications provided for in this letter agreement shall be in writing and shall be delivered to each party at each party’s respective address set forth on the first page of this letter agreement, and shall be deemed effectively given or delivered: (i) upon personal delivery to the party to be notified, (ii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iii) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt; provided that all notices to the Company should be directed to the attention of the Chairman of the Board, with a copy to the General Counsel of BD and the Company.

     H. ENTIRE AGREEMENT.

     Except for the Prior Agreements (to the extent provided herein), this letter agreement represents the entire agreement of the parties with respect to the subject matter hereof and, except to the extent provided for herein, supersedes the Change in Control Agreement and, without limitation, any other agreement between the parties with respect to such subject matter.

 


 

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     I. SUCCESSORS; BINDING AGREEMENT.

     1. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to assume and agree to perform this letter agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place; provided, however, that if all or substantially all of the business or assets of the Company, Tripath Oncology, Inc., or BD is sold within six (6) months of the completion of the Sale, (i) this letter agreement shall not be assigned to the successor, but the Company (or such successor, as applicable) shall remain liable for any payments due hereunder, (ii) you will not be required to provide services under the terms of this letter agreement, and (iii) the Retention Period will be deemed to have ended on the date of the completion of such sale to the extent that the Retention Period does not end earlier; provided, however, that you will be required to comply with the provisions in Section IV(B) of this letter agreement. As used in this letter agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business or assets as aforesaid which assumes and agrees to perform this letter agreement by operation of law, or otherwise.

     2. This letter agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

     J. COUNTERPARTS.

     This letter agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one in the same instrument.

     K. ADDITIONAL.

          1. Nothing contained in this letter agreement, nor any action taken hereunder, shall be construed as a contract of employment, or as giving you any right to be retained as an employee of the BD Group. Your employment will remain at-will and your obligations under this letter agreement shall not be affected by any change in your position, title or function with, or compensation by the Company. Except for the rights provided in Section IV(K)(2) below, any right or obligation of the BD Group under this letter agreement shall only become effective on the completion of the Sale.

          2. No provision of this letter agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing signed by each of you, BD and the Company.

          3. No waiver by any of the parties hereto at any time of any breach by the another party hereto of, or compliance with, any condition or provision of this letter agreement to

 


 

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be performed by any other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any time prior to subsequent time.

          4. The validity, interpretation, construction and performance of this letter agreement shall be governed by the laws of the State of New York.

          5. The invalidity or unenforceability of any provision of this letter agreement shall not affect the validity or enforceability of any other provision of this letter agreement, which shall remain in full force and effect.

          6. Your rights to payments or benefits under this letter agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this Section shall be void.

          7. Notwithstanding anything herein to the contrary, (i) if at the time of your termination of employment with the Company and its affiliates you are a “specified employee” as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to you) until the date that is six months following your termination of employment with the Company and its affiliates (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to you hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax or result in an additional cost to the Company. BD and the Company shall consult with you in good faith regarding the implementation of the provisions of this Section; provided that neither the BD Group nor any of its employees or representatives shall have any liability to you with respect thereto.

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     If this letter agreement correctly sets forth our agreement on the subject matter hereof, kindly sign and return one originally executed letter to the Company, attention Robert E. Curry, and one originally executed letter to BD, attention Jeffrey Sherman and this letter agreement will then constitute the parties’ agreement on this subject.

 

 

 

 

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

 

TRIPATH IMAGING, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name: Robert E. Curry

 

 

 

 

Title: Chairman of the Compensation Committee

 

 

 

 

 

 

 

 

 

BECTON, DICKINSON AND COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

I acknowledge receipt and agree with the foregoing terms and conditions.

PAUL R. SOHMER, M.D.

 

Paul R. Sohmer, M.D.

 


 

Exhibit A
to the Letter Agreement between Dr. Paul R. Sohmer and TriPath Imaging, Inc., dated
September 8, 2006

Defined terms used herein have the meaning ascribed to them in the letter agreement. Likewise, terms defined herein shall have the same meanings ascribed to them herein for purposes of the letter agreement.

TERM OF EMPLOYMENT:

Dr. Sohmer agrees to remain employed by the Company during the Retention Period on the terms and conditions set forth in this Exhibit A.

For a minimum of a six (6) month period and a maximum of a twelve (12) month period following the end of the Retention Period, Dr. Sohmer shall provide consulting services to the BD Group as reasonably requested by the BD Group (other than for services under Section IV(F) of the letter agreement), for which the Company shall pay Dr. Sohmer a consulting fee paid on a per diem basis, which fee shall be mutually agreed upon by the parties. Nothing in this paragraph shall prevent Dr. Sohmer from accepting other employment to begin on a full-time basis at any time after the Retention Period.

COMPENSATION:

During the Retention Period, Dr. Sohmer shall be paid a base salary of $39,583.33 monthly (the equivalent of $475,000 annually) to be paid in accordance with the Company’s standard payroll practices. Dr. Sohmer shall be eligible to participate in all of the benefits provided to other similarly situated executives of the BD Group, including, without limitation, medical benefits, life insurance, dental insurance, disability insurance.

LOCATION OF EMPLOYMENT:

During the Retention Period, Dr. Sohmer will be expected to work ten (10) business days per month in one of the office locations of the Company in North Carolina as mutually agreed upon by the parties or traveling on Company business (other than to the New Jersey Office (as defined below)). He will work the remaining portion of the Retention Period from his home office in Croton on Hudson, New York, unless BD requests that he work from an office in Franklin Lakes, New Jersey provided to him by BD (the “New Jersey Office”).

All reasonable expenses, including expenses relating to travel from Dr. Sohmer’s home to the facilities in North Carolina, shall be reimbursed to Dr. Sohmer by the Company within 30 days of being presented with appropriate invoices, credit card receipts, or other appropriate evidence.

 


 

TITLE AND POSITION:

Dr. Sohmer will be in the position of Worldwide President of BD-TriPath Imaging Unit (the “Unit”) reporting to an Executive Vice President (or other equivalent executive office) of BD and will be working to effectuate the transition of the duties outlined below to his replacement.

DUTIES

Dr. Sohmer’s duties and responsibilities shall include:

 

(i)

 

Serving as leader of the Unit for all functional activities including strategic, operational and financial.

 

 

 

 

 

(ii)

 

Staffing and managing of all senior functional and technical leadership positions in the Unit.

 

 

 

 

 

(iii)

 

Working closely with regional presidents to manage quality and effectiveness of business leaders in all geographies.

 

 

 

 

 

(iv)

 

Organizing annual business planning and financial submissions to segment leadership for review and approval.

 

 

 

 

 

(v)

 

Managing focus on growth, ROIC, and other related priority measures as requested by segment President. Targeting quarterly and annual financial performance to plan, taking into consideration integration and transition issues and costs.

 

 

 

 

 

(vi)

 

Building quality and effectiveness of key work processes including manufacturing, product development, budgeting, sales effectiveness, service to customers, and related critical activities.

 

 

 

 

 

(vii)

 

Communicating routinely to leadership on progress, issues, and opportunities for future growth and performance. May also manage broader segment projects as mutually agreed with the Executive Vice President.

 

 

 

 

 

(viii)

 

Meeting regularly with key customers and distributors to maintain awareness of relevant trends and related events in the healthcare industry.

 

 

 

 

 

(ix)

 

Working closely with key functions and Unit leadership to pursue those opportunities for growth or better performance.

 

 

 

 

 

(x)

 

Working closely with senior quality and regulatory leaders both in the Unit and in BD as a whole. Taking active leadership roles in key initiatives in this area.

 


 

 

(xi)

 

Chairing the Product Development Team which collaborates with BD Technologies and other business units in technology planning.

 

 

 

 

 

(xii)

 

Responsible for product planning.

 

 

 

 

 

(xiii)

 

Building team to support key BD initiatives, and align strategy and work process as well as integrated activities.

 

 

 

 

 

(xiv)

 

Working with Human Resource Leader to conduct HR Planning for the business.

 

 

 

 

 

(xv)

 

Managing business development activities, both in developed and developing markets, recognizing role of business development in growth expectations.

 

 

 

 

 

(xvi)

 

Any other duties and responsibilities as the Executive Vice President or the Board of Directors of BD may reasonably assign from time to time consistent with position as Worldwide President of BD-TriPath Imaging Unit and consistent with the intent to effectuate the transition of such duties and responsibilities to his replacement.

 


 

 

RELEASE AND WAIVER OF CLAIMS

     This Release and Waiver of Claims (“Release”) is entered into as of this                      day of _                                        , 20                    , between [Tripath Imaging, Inc.] and any successor thereto (collectively, the “Company”) and                                          (the “Executive”).

     The Executive and the Company agree as follows:

     1. The employment relationship between the Executive and the Company and its subsidiaries and affiliates, as applicable, terminated on                                          (the “Termination Date”).

     2. In accordance with the retention bonus letter agreement, entered into as of August ___, 2006, between Executive and the Company (the “Retention Bonus Agreement”), Executive is entitled to receive certain payments after the Termination Date.

     3. In consideration of the above, the sufficiency of which the Executive hereby acknowledges, the Executive, on behalf of the Executive and the Executive’s heirs, executors and assigns, hereby releases and forever discharges the Company and its members, parents, affiliates, subsidiaries, divisions, any and all current and former directors, officers, employees, agents, and contractors and their heirs and assigns, and any and all employee pension benefit or welfare benefit plans of the Company, including current and former trustees and administrators of such employee pension benefit and welfare benefit plans, from all claims, charges, or demands, in law or in equity, whether known or unknown, which may have existed or which may now exist from the beginning of time to the date of this Release, including, without limitation, any claims the Executive may have arising from or relating to the Executive’s employment or termination from employment with the Company and its subsidiaries and affiliates, as applicable, including a release of any rights or claims the Executive may have under Title VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act of 1991 (which prohibit discrimination in employment based upon race, color, sex, religion, and national origin); the Americans with Disabilities Act of 1990, as amended, and the Rehabilitation Act of 1973 (which prohibit discrimination based upon disability); the Family and Medical Leave Act of 1993 (which prohibits discrimination based on requesting or taking a family or medical leave); Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination based upon race); Section 1985(3) of the Civil Rights Act of 1871 (which prohibits conspiracies to discriminate); the Employee Retirement Income Security Act of 1974, as amended (which prohibits discrimination with regard to benefits); any other federal, state or local laws against discrimination; or any other federal, state, or local statute, or common law relating to employment, wages, hours, or any other terms and conditions of employment. This includes a release by the Executive of any claims for wrongful discharge, breach of contract, torts or any other claims in any way related to the Executive’s employment with or resignation or termination from the Company and its subsidiaries and affiliates, as applicable. This release also includes a release of any claims for age discrimination under the Age Discrimination in Employment Act, as amended (“ADEA”). The ADEA requires that the Executive be advised to consult with an attorney before the Executive waives any claim under ADEA. In addition, the ADEA provides the Executive with at least 21 days to decide whether to waive claims under ADEA and seven days after the Executive signs the Release to revoke that waiver. This Release does not release

 


 

2

the Company from any obligations due to the Executive under the Retention Bonus Agreement or under this Release, any rights Executive has to indemnification by the Company, and any vested rights Executive has under the Company’s employee pension benefit and welfare benefit plans (other than claims for benefits under such employee plans in the ordinary course).

     4. This Release is not an admission by the Company or its subsidiaries or affiliates of any wrongdoing or liability.

     5. The Executive waives any right to reinstatement or future employment with the Company and its subsidiaries and affiliates following the Executive’s separation from the Company and its subsidiaries and affiliates on the Termination Date.

     6. The Executive agrees not to engage in any act after execution of the Release that is intended, or may reasonably be expected to harm the reputation, business, prospects or operations of the Company or its subsidiaries or affiliates or their respective officers, directors, stockholders or employees.

     7. The Executive shall continue to be bound by Section 6 of the Retention Bonus Agreement.

     8. The Executive shall promptly return all Company and subsidiary and affiliate property in the Executive’s possession, including, but not limited to, Company or subsidiary or affiliate keys, credit cards, cellular phones, computer equipment, software and peripherals and originals or copies of books, records, or other information pertaining to the Company or subsidiary or affiliate business. In addition, the Executive shall promptly return all electronic documents or records that the Executive may have saved to any such cellular phone, laptop computer or other electronic or storage device, whether business or personal, including any PowerPoint or other presentation stored in hard copy or electronically. Further, if Executive stored any information relating to the Company on a personal computer or other storage device, the Executive shall permanently delete all such information; provided, however, that, prior to deleting that information, the Executive shall print out one copy and provide it to the Company.

     9. This Release shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws. Exclusive jurisdiction with respect to any legal proceeding brought concerning any subject matter contained in this Release shall be settled in the manner provided in the Retention Bonus Agreement.

     10. This Release represents the complete agreement between the Executive and the Company concerning the subject matter in this Release and supersedes all prior agreements or understandings, written or oral. This Release may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

     11. Each of the sections contained in this Release shall be enforceable independently of every other section in this Release, and the invalidity or unenforceability of any section shall not invalidate or render unenforceable any other section contained in this Release.

 


 

3

     12. It is further understood that for a period of 7 days following the execution of this Release in duplicate originals, the Executive may revoke this Release, and this Release shall not become effective or enforceable until the revocation period has expired. No revocation of this Release by the Executive shall be effective unless the Company has received within the 7 day revocation period, written notice of any revocation.

     13. This Release has been entered into voluntarily and not as a result of coercion, duress, or undue influence. The Executive acknowledges that the Executive has read and fully understands the terms of this Release and has been advised to consult with an attorney before executing this Release. Additionally, the Executive acknowledges that the Executive has been afforded the opportunity of at least 21 days to consider this Release.

     The parties to this Release have executed this Release as of the day and year first written above.

 

 

 

 

 

 

 

 

 

[TRIPATH IMAGING, INC.]

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
Termination date agreement
 
                              TRIPATH IMAGING, INC.
                              780 Plantation Drive
                              Burlington, NC 27215
 
                                 August 3, 2004
 
Dr. Paul R. Sohmer, M.D.
c/o TriPath Imaging, Inc.
780 Plantation Drive
Burlington, NC 27215
 
Dear Paul:
 
      In recognition of the fact that your contributions to the past and future
growth and success of TriPath Imaging, Inc. (the "Company"), a Delaware
corporation, and its affiliates have been and are expected to be substantial, we
want to assure the Company of your continued services for the benefit of the
Company, particularly in the face of a change-in-control of the Company.
 
      This letter agreement (this "Agreement") therefore sets forth those
benefits which the Company will provide to you and your obligations to the
Company in the event your employment within the Company is terminated in
connection with a "Change in Control" (as defined in Section 2(i)) of the
Company under the circumstances described below.
 
      It is hereby acknowledged that certain terms related to the acceleration
of vesting of options to purchase 450,000 shares and 400,000 shares of the
Company's Common Stock granted to you on June 6, 2000 and January 24, 2001,
respectively (the "Prior Option Grants"), are governed by an offer letter dated
June 5, 2000 (the "Offer Letter") between you and the Company. Notwithstanding
the terms of the Offer Letter, the provisions of Section 4(iv)(d) and Section 7
hereof shall nonetheless apply to the Prior Option Grants.
 
1. TERM.
 
      This agreement shall expire on August 3, 2006; provided, however, that if
a Change in Control should occur while you are still an employee of the Company,
then this Agreement shall continue in effect from the date of such Change in
Control for so long as you remain an employee of the Company, but in no event
for more than twenty-four (24) months following such Change in Control (such
24-month period hereinafter called the "Change in Control Period"); provided,
further, if your employment is terminated by the Company without Cause (defined
below) prior to a Change in Control, this Agreement shall expire 180 days after
the date that your employment is terminated. In addition, this Agreement may be
terminated by the Company at any time prior to a Change in Control upon one
year's written notice to you. The termination or expiration of the term of this
Agreement shall not adversely affect your rights
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 2
 
under this Agreement that have accrued prior to any such termination or
expiration, except to the extent provided for in Section 7.
 
2. CHANGE IN CONTROL.
 
      (i) For purposes of this Agreement, a "Change in Control" means the
consummation and closing of an event or occurrence set forth in either or both
of clauses (a) and (b) below (including the consummation and closing of an event
or occurrence that constitutes a Change in Control under one clause but is
specifically exempted from the other clause):
 
            (a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (A) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this paragraph (a), the
following acquisitions shall not constitute a Change in Control: (I) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion of exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (II) any acquisition by the Company, (III) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (IV) any acquisition by any
corporation pursuant to a transaction which complies with subclause (A) of
clause (b) of this Section 2(i); or
 
            (b) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale,
lease, exchange or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), unless, immediately following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company Stock
and Outstanding Company Voting Securities, respectively.
 
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 3
 
      If a Change in Control shall have occurred while you are still an employee
of the Company, or after events and within the time period as stated in Section
3(vi), you shall be entitled to the payments and benefits provided in Section 4
hereof upon the subsequent termination of your employment within twenty-four
(24) months of such Change in Control, by you or by the Company unless such
termination is (a) by the Company for "Cause" (as defined below), or (b) by you
other than for "Good Reason" (as defined below), in any of which events you
shall not be entitled to receive benefits under this Agreement.
 
      (i) "Disability". If, as a result of your incapacity due to physical or
mental illness, you shall have been deemed "disabled" by (A) the institution
appointed by the Company to administer the Company's long-term disability plan
(or successor plan) for your benefit or, (B) in the absence of such an
institution or in the event that you are not covered by a long-term disability
plan of the Company, the Company acting in good faith.
 
      (ii) "Cause". For the purpose of this Agreement, the Company shall have
"Cause" to terminate your employment upon:
 
            (a) The willful and continued failure by you substantially to
perform your duties with the Company (other than any such failure resulting from
your incapacity due to physical or mental illness or any failure resulting from
your terminating your employment with the Company for "Good Reason" (as defined
below));
 
            (b) Willful gross misconduct or dishonesty, including fraud or
embezzlement related to the performance of your duties with the Company or that
which would be reasonably likely to cause, as determined in good faith by the
Board of Directors of the Company: (A) a material adverse affect on the business
or reputation of the Company, or (B) expose the Company to a material risk of
civil or criminal legal damages, liabilities or penalties; or
 
            (c) Conviction (or a plea of guilty or no contest) of a felony or a
crime involving moral turpitude.
 
      (iii) "Good Reason". You may terminate your employment for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean without your express
written consent:
 
            (a) The material diminution of your duties with the Company from
those in effect immediately prior to the Change in Control;
 
            (b) A continuing requirement that you perform duties that are
materially inconsistent with and which would have a material adverse impact on
your title, position, authority, duties or responsibilities in effect
immediately prior to the Change in Control;
 
            (c) A reduction by the Company in your base salary as in effect
immediately prior to the Change in Control;
 
            (d) A reduction in the level of your bonus opportunities or the
degree of probability of your attainment of such opportunities as in effect
immediately prior to the Change
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 4
 
in Control, unless there is a corresponding increase in your base salary or your
equity compensation opportunities; provided, however, that this clause shall not
prohibit the Board or the Company's Compensation Committee from changing the
general business criteria or specific performance goals used to establish or
determine bonus opportunities in a manner consistent with this clause;
 
            (e) A material reduction in your health, disability, life insurance,
or retirement benefits as in effect immediately prior to the Change in Control
determined in the aggregate; provided, however, that any changes in insurance
companies, co-payments, deductibles, premiums, or coverages shall not constitute
a material reduction if such changes are generally applicable to all full-time
employees of the Company.
 
            (f) Any requirement by the Company that the location at which you
perform your principal duties for the Company be changed to a new location that
is more than 100 miles from the location at which you perform your principal
duties for the Company immediately prior to the Change in Control; or
 
            (g) Any failure by the Company to comply with and satisfy Section
14(i) of this Agreement.
 
      (iv) Notice of Termination. Any termination by the Company pursuant to
subparagraphs (i) or (ii) above or by you pursuant to subparagraph (iii) above
shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which 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 of your termination under the provision so indicated.
If you are terminating your employment pursuant to subparagraph (iii) above, the
Notice of Termination shall be delivered to the Company within thirty (30) days
following the date on which the facts and circumstances existed that gave rise
to your right to terminate your employment for Good Reason and at least ten (10)
business days prior to your proposed Date of Termination. Such notice shall
indicate the specific provision or provisions in this Agreement upon which you
have relied to make such determination and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such determination.
If the facts and circumstances that give rise to your right to terminate for
Good Reason present a curable condition, the Company shall have ten (10)
business days after receipt of the Notice of Termination to cure such condition.
 
      (v) Date of Termination. "Date of Termination" shall mean:
 
            (a) If this Agreement is terminated for Disability, thirty days
after Notice of Termination is given (provided that you shall not have returned
to the performance of your duties on a full-time basis during such thirty-day
period),
 
            (b) If your employment is terminated pursuant to subparagraph (iii)
above, the date specified in the Notice of Termination, which shall be no less
than ten (10) business days after the date on which the Notice of Termination is
delivered; and
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 5
 
            (c) If your employment is terminated for any other reason, the date
on which a Notice of Termination is given (or, if a Notice of Termination is not
given, the date of such termination).
 
      (vi) Termination in Anticipation of a Change in Control. If your
employment is terminated by the Company without Cause within 180 days prior to a
Change in Control and such termination (i) was at the request of a third party
who had indicated an intention or had taken steps reasonably calculated to
effect a Change in Control and who subsequently effectuates a Change in Control
or (ii) otherwise occurred as a condition to, or in anticipation of, a Change in
Control which actually occurs, then for all purposes of this Agreement, the date
of a Change in Control for purposes of this Agreement shall mean the date
immediately prior to the date of such termination of your employment and shall
entitle you to the benefits provided under Section 4 of this Agreement as though
it were a termination without Cause after a Change in Control.
 
4. COMPENSATION UPON DEATH, DURING DISABILITY OR UPON TERMINATION IN CONNECTION
WITH A CHANGE IN CONTROL.
 
      (i) If, after a Change in Control, your employment is terminated by reason
of your death, your legal representatives shall receive an amount equal to the
payments described in Section 4(iv)(a) below. Additionally, your eligible
dependents may elect to continue their health care benefits under COBRA, as
described in and in accordance with Section (4)(iv)(b) below. Notwithstanding
anything herein to the contrary, all payments made pursuant to Section 4(iv)(a)
and any cash payments made pursuant to Section 4(iv)(b), if any, shall be paid
in accordance with the Company's regular payroll practices applicable to you for
a period of twelve (12) months following your death, with the remaining balance
paid in a lump sum at the end of the twelfth month following your death, less
applicable tax withholding, beginning with the next regular pay date applicable
to you following your death.
 
      (ii) If, after a Change in Control, you shall fail to perform your duties
hereunder as a result of incapacity due to Disability, you shall (I) continue to
receive your full base salary at the rate then in effect until your Date of
Termination (and, if the Company maintains a long-term disability plan, you
shall be eligible for coverage thereunder in accordance with the terms thereof
and subject to the satisfaction of all applicable conditions, including without
limitation the timely filing of a notice of claim) and (II) continue to be
eligible to receive the health care benefits under COBRA and other insurance
benefits, as described in and in accordance with Section 4(iv)(b) below.
 
      (iii) If, after a Change in Control, your employment shall be terminated
for Cause, the Company shall pay you for your full base salary through the Date
of Termination at the rate in effect at the time Notice of Termination is given
and the Company shall have no further obligations to you under this Agreement.
 
      (iv) If, after a Change in Control, the Company shall terminate your
employment, other than pursuant to Section 3(iii) hereof, or you shall terminate
your employment for Good Reason, then, subject to Section 7:
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 6
 
            (a) The Company shall pay you: (I) thirty-six (36) months (the
"Severance Period") of salary continuation at your base rate in effect at the
time of your termination in accordance with the Company's regular payroll
practices plus (II) an amount equal to the greater of 3 times (x) the bonus (if
any) you received for the last fiscal year prior to your Date of Termination, or
(y) the average of the bonuses you received over the past three fiscal years,
plus (III) an amount equal to 100% of your target bonus for the fiscal year in
which the Date of Termination occurs, pro rated for the number of days worked by
you during such fiscal year, including the Date of Termination (the "Severance
Payments"). All payments described in this subparagraph (a) shall be paid in
cash by the Company to you in accordance with the Company's regular payroll
practices applicable to you, less applicable tax withholding, beginning with the
next regular pay date applicable to you following your Date of Termination;
 
            (b) You shall have the opportunity to continue your group health
care benefits, and those of your eligible dependents, in accordance with COBRA,
as applicable. During the thirty-six (36) calendar months following the month in
which you terminate employment with the Company, the Company shall make any
necessary payments or adjustments such that you shall have the opportunity to
continue these group health care benefits at the applicable employee premium
rate in effect at the time of your termination of employment. In the event that
the Company's insurance company is unable or unwilling to provide the group
health care benefits, or if you become entitled to Severance Payments as a
result of a termination in anticipation of a Change in Control as described in
Section 3(vi) hereof and you do not elect COBRA coverage at the time of your
termination, then the Company shall provide you with monthly cash payments equal
to the cost of providing such coverage to its employees generally. In addition,
for the thirty-six (36) calendar months following the month in which you
terminate employment (except if such termination is as a result of your death),
the Company shall provide you with group term life insurance and accidental
death and dismemberment coverage substantially similar to the coverage in effect
immediately prior to your termination of employment; provided, however, if the
Company's insurance company is unable or unwilling to provide the coverage, or
if you become entitled to Severance Payments as a result of a termination in
anticipation of a Change in Control as described in Section 3(vi) hereof, then
the Company shall provide you with monthly cash payments equal to the cost of
providing such coverage to its employees generally. You shall be responsible for
such co-payments and other deductions and premiums to the same extent that you
were responsible prior to your termination of employment. Notwithstanding the
foregoing, (I) the group health care benefits, including the Company's subsidy,
may be terminated sooner to the extent permitted by COBRA if you or your
dependents obtain other group health plan coverage, and (II) the Company shall
not provide any such life insurance or accidental death and dismemberment
insurance benefits to you to the extent that an equivalent benefit is received
by you from another employer during such period, and you shall report any such
benefit actually received by you to the Company; and
 
            (c) the exercisability of all outstanding stock options, restricted
stock, stock appreciation rights and other equity awards then held by you shall
accelerate in full; and
 
            (d) the time period for exercising any non-qualified stock options
and stock appreciation rights following a termination of your employment without
Cause, as set forth in the
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 7
 
applicable award agreement, shall be extended from three (3) months to the
shorter of (I) twelve (12) months or (II) the remaining balance of the term of
such award,; and
 
            (e) you shall be permitted to request of the Company that the time
period for exercising any incentive stock options following a termination of
employment without Cause, as set forth in the applicable award agreement, shall
be extended from three (3) months to the shorter of (I) twelve (12) months or
(II) the remaining balance of the term of such option.
 
      (v) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer after
the Date of Termination, or otherwise, except to the extent provided in Section
4(iv)(b).
 
      (vi) The Severance Payments and other benefits described in this Section 4
shall be the only severance payments you are to receive in the event of a
termination of your employment following a Change in Control and you agree you
shall not be entitled to any additional payments or benefits not otherwise
described in this Agreement. You hereby acknowledge and agree that you are not
eligible to be a "Participant" in the TriPath Imaging, Inc. Employee Retention
Plan. Any payments or benefits received under this Agreement shall not be taken
into account for purposes of determining benefits under any other employee
benefit plan of the Company or any affiliate, except to the extent required by
law, or as otherwise expressly provided by the terms of such other plan.
 
5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
 
      (i) In the event it shall be determined that any payment or benefit
received or to be received by you (whether paid or payable or distributed or
distributable or provided pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required under this
Section 5) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code (the "Code") or any interest or penalties are
incurred by you with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then you shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after the payment by you of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up
Payment, you retain an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
 
      (ii) Notwithstanding the foregoing provisions of Section 5(i), if it shall
be determined that you are entitled to a Gross-Up Payment, but that you, after
taking into account the Payments and the Gross-Up Payment, would not receive a
net after-tax benefit of at least $50,000 (taking into account both income taxes
and any Excise Tax) as compared to the net after-tax proceeds to you resulting
from an elimination of the Gross-Up Payment and a reduction of the Payments, in
the aggregate, to an amount (the "Reduced Amount") such that the receipt of
Payments would
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 8
 
not give rise to any Excise Tax, then no Gross-Up Payment shall be made to you
and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
 
      (iii) All determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Company's independent auditors or such other
certified public accounting firm as may be designated by the Company (the
"Accounting Firm") which shall provide detailed supporting calculations to both
the Company and you within fifteen (15) business days of the receipt of notice
from you that a Payment has been made or will be required, or such earlier time
as is requested by the Company. In the event that the Accounting Firm is serving
as accountant or auditor for the individual, entity, or group affecting the
Change in Control, the Company shall appoint another nationally recognized
accounting firm to make the determinations required hereunder. All fees and
expenses of the Accounting Firm shall be borne by the Company.
 
      (iv) Any Gross-Up Payment shall be paid by the Company to you within ten
(10) business days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and you
As a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 5(v) and you thereafter are required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for your benefit.
 
      (v) You shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practical but
no later than ten (10) business days after you are informed in writing of such a
claim and shall apprise the Company of the nature of the claim and the date on
which such claim is requested to be paid. You shall not pay such claim prior to
the expiration of the thirty (30) day period following the date on which you
give such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
you in writing prior to the expiration of such period that it desires to contest
such claim, you shall: (a) give the Company any information reasonably requested
by the Company relating to such claim, (b) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company, (c)
cooperate with the Company in good faith in order to effectively contest such
claim, and (d) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold you harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 9
 
foregoing provisions of this Section 5(v), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct you to pay the tax claimed and sue for a refund or to
contest the claim in any permissible manner, and you agree to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs you to pay such claim
and sue for a refund, the Company shall advance the amount of such payment to
you, on an interest-free basis, and shall indemnify and hold the you harmless,
on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for your taxable year with respect to which such contested amount is claimed to
be due is limited solely to such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and you shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or other taxing authority.
 
      (vi) If, after the receipt by you of an amount advanced by the Company
pursuant to Section 5(v), you become entitled to receive any refund with respect
to such a claim, you shall (subject to the Company's complying with the
requirements of Section 5(v)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by you of an amount advanced by the
Company pursuant to Section 5(v), a determination is made that you shall not be
entitled to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
 
      (vii) If, pursuant to regulations issued under Section 280G or 4999 of the
Code, the Company and you are required to make a preliminary determination of
the amount of an excess parachute payment and thereafter a redetermination of
the Excise Tax is required under the applicable regulations, the parties shall
request the Accounting Firm to make such redetermination. If as a result of such
redetermination an additional Gross-Up Payment is required, the amount thereof
shall be paid by the Company to you within five (5) business days of the receipt
of the Accounting Firm's determination. If the redetermination of the Excise Tax
results in a reduction of the Excise Tax, you shall take such steps as the
Company may reasonably direct in order to obtain a refund of the excess Excise
Tax paid. If the Company determines that any suit or proceeding is necessary or
advisable in order to obtain such refund, the provisions of Section 5(v) hereof
relating to the contesting of a claim shall apply to the claim for such refund,
including, without limitation, the provisions concerning legal representation,
cooperation by you, participation by the Company in the proceedings and
indemnification by the Company. Upon receipt of any such refund, you shall
promptly pay the amount of such refund to the Company. If the amount of the
income taxes otherwise payable by you in respect of the
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 10
 
year in which you make such payment to the Company is reduced as a result of
such payment, you shall, no later than the filing of your income tax return in
respect of such year, pay the amount of such tax benefit to the Company. In the
event there is a subsequent redetermination of your income taxes resulting in a
reduction of such tax benefit, the Company shall, promptly after receipt of
notice of such reduction, pay to you the amount of such reduction. If the
Company objects to the calculation or recalculation of the tax benefit, as
described in the preceding two sentences, the Accounting Firm shall make the
final determination of the appropriate amount. You shall not be obligated to pay
to the Company the amount of any further tax benefits that may be realized by
you as a result of paying to the Company the amount of the initial tax benefit.
 
      (viii) Nothing in this Section 5 is intended to violate the Sarbanes-Oxley
Act and to the extent that any advance or repayment obligation hereunder would
do so, such obligation shall be modified so as to make the advance a
nonrefundable payment to you and the repayment obligation null and void.
 
6. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
 
      You, by your execution hereof, (i) hereby irrevocably submit to the
exclusive jurisdiction of the state courts of the State of North Carolina (or
any other state in which the Company or any successor maintains its
headquarters) for the purpose of any claim or action arising out of or based
upon this Agreement or relating to the subject matter hereof, (ii) hereby waive,
to the extent not prohibited by applicable law, and agree not to assert by way
of motion, as a defense or otherwise, in any such claim or action, any claim
that you are not subject personally to the jurisdiction of the above-named
courts, that your property is exempt or immune from attachment or execution,
that any such proceeding brought in the above-named court is improper, or that
this Agreement or the subject matter hereof may not be enforced in or by such
courts, and (iii) hereby agree not to commence any claim or action arising out
of or based upon this Agreement or relating to the subject matter hereof other
than before the above-named courts nor to make any motion or take any other
action seeking or intending to cause the transfer or removal of any such claim
or action to any court other than the above-named courts whether on the grounds
of inconvenient forum or otherwise. You hereby consent to service of process in
any such proceeding in any manner permitted by North Carolina law (or the law of
such other state in which the Company or any successor maintains its
headquarters), and agree that service of process by registered or certified
mail, return receipt requested, at your address specified on the first page
hereof is reasonably calculated to give actual notice. You hereby irrevocably
waive any right to a trial by jury in any action, suit, or other proceeding
arising under or relating to any provisions of this Agreement.
 
7. OBLIGATIONS DURING THE CHANGE OF CONTROL PERIOD AND FOLLOWING TERMINATION.
 
      You and the Company have previously entered into a Non-Competition
Agreement (the "Non-Competition Agreement") and an Employee Non-Disclosure and
Inventions Agreement dated June 2, 2000 (the "NDA"; the Non-Competition
Agreement and the NDA collectively referred to as the "Prior Agreements") both
attached hereto on Schedule A, which impose upon you certain obligations
including, but not limited to, non-competition with
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 11
 
the Company, non-solicitation of employees and customers and confidentiality of
Company information. Such Prior Agreements shall remain in full force and effect
upon the execution of this Agreement except that they shall be superceded by
this Agreement during the Change in Control Period. If the Change in Control
Period expires and you remain employed by the Company thereafter, this Agreement
shall have terminated and the Prior Agreements and their terms shall continue to
govern your obligations during and following termination of your employment.
Notwithstanding anything herein to the contrary, your right to receive any
payments or benefits under this Agreement shall be conditioned upon and subject
to your compliance with your obligations as described in this Section 7, which
obligations shall survive the termination or expiration of this Agreement
according to their respective terms. You hereby agree that any breach of the
provisions of this Section 7 by you will entitle the Company to terminate this
Agreement and to cease all payments and benefits hereunder. Any payments you may
receive pursuant to the Prior Agreements shall offset on a dollar-for-dollar
basis any obligations of the Company or any affiliate to make payments to you
under this Agreement.
 
      (i) Confidentiality.
 
            (a) Proprietary Information. In the course of your service to the
Company and its affiliates, you will have access to confidential intellectual
property, confidential specifications, know-how, inventions, testing methods,
strategic or technical data, marketing research data, product research and
development data, manufacturing techniques, financial performance, confidential
customer lists, costs, sources of supply and trade secrets, names and addresses
of the people and organizations with whom the Company and its affiliates have
business relationships and such relationships, and special needs of customers of
the Company and its affiliates, as well as other confidential business
information, all of which are confidential and may be proprietary and are owned
or used by the Company or its affiliates. Such information shall hereinafter be
called "Proprietary Information" and shall include any and all items enumerated
in the preceding sentence and coming within the scope of the business of the
Company or its affiliates as to which you may have access, whether conceived or
developed by others or by you alone or with others during the period of your
service to the Company or its affiliates, whether or not conceived or developed
during regular working hours. The term "Proprietary Information" also shall be
deemed to include comparable information that the Company or any of its
affiliates have received belonging to others or which was received by the
Company or any of its affiliates with any understanding that it would not be
disclosed. Proprietary Information may be contained in various media, including
without limitation, patent applications, computer programs in object and/or
source code, flow charts and other program documentation, manuals, plans
drawings, designs, technical and scientific specifications, laboratory
notebooks, supplier and customer lists, internal financial and business data and
other documents and records of the Company and its affiliates. Proprietary
Information shall not include any information which (I) is in the public domain
prior to the execution of the NDA and this Agreement, (II) entered the public
domain after the time of its disclosure under the NDA or this Agreement through
means other than an unauthorized disclosure resulting from an act or omission by
you, (III) was independently developed or discovered by you prior to the time of
disclosure under the NDA, or (IV) is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order,
provided that the Company is notified prior
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 12
 
to such disclosure and has the opportunity to take any actions it deems
appropriate to obtain confidential treatment for such disclosure and, if
possible, to minimize the extent of such disclosure.
 
            (b) You shall not during the term of your employment with the
Company or any time thereafter, regardless of the reason for termination of your
employment (a) disclose, directly or indirectly, any Proprietary Information to
any person other than the Company or authorized employees thereof at the time of
such disclosure, or such other persons to whom you have been specifically
instructed to make disclosure by management of the Company and in all such cases
only to the extent required in the course of your service to the Company or (b)
use any Proprietary Information, directly or indirectly, for your own benefit or
for the benefit of any other person or entity.
 
            (c) All notes, letters, documents, records, tapes and other media of
every kind and description relating to the business, present or otherwise, of
the Company or its affiliates and any copies, in whole or in part, thereof
(collectively, the "Documents"), whether or not prepared by you, shall be the
sole and exclusive property of the Company. You shall safeguard all Documents
and shall surrender to the Company at the time your employment terminates, or at
such earlier time or times as management of the Company may specify, all
Documents then in your possession or control.
 
      (ii) Non-Competition; Non-Hire; Non-Solicitation.
 
            (a) During the Severance Period, you will not engage or participate
in, directly or indirectly, as principal, agent, employee, employer, consultant,
investor or partner, or assist in the management of, or own any stock or any
other ownership interest in (excluding ownership of not more than one (1%)
percent of the voting stock of any publicly held corporation), any business
which is Competitive with the Company (as defined below).
 
                  (1) A business shall be considered "Competitive with the
Company" if it is engaged in any business, venture or activity, or is developing
any product, in the Restricted Area (as defined below) which competes, plans to
compete or upon commercialization, would compete, with any business, product,
venture or activity being developed, conducted or proposed to be conducted (as
evidenced by the Company's internal written business plans or memoranda) by the
Company, or any group, division or affiliate of the Company, determined as of
the date of the Change in Control.
 
                  (2) The "Restricted Area" shall mean the United States of
America, Canada, and any other geographic area where the Company, or any group,
division or affiliate of the Company, is conducting, or has proposed to conduct
(as evidenced by the Company's internal written business plans or memoranda),
any business, venture or activity, determined as of the date of the Change in
Control.
 
            (b) During the term of your employment and during the Severance
Period, you will not hire any officer, director, consultant, executive or
employee of the Company or any of its affiliates, nor will you solicit or
attempt to solicit any such person to leave his or her
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 13
 
engagement with the Company or such affiliate. During the term of your
employment and during the Severance Period, you will not call upon, solicit,
divert or attempt to solicit or divert from the Company or any of its affiliates
any of their customers or suppliers or potential customers or suppliers of whose
names you were aware during your employment with the Company.
 
            (c) During the Severance Period you shall notify the Company of any
change of address and of any subsequent employment (stating the name and address
of the employer and the nature of the position) or any other business activity.
 
      (iii) Non-Disparagement. During the term of your employment and for five
(5) years thereafter, you shall not disparage, deprecate, or make any comments
or take any other actions, directly or indirectly, that could reflect adversely
on the Company, its affiliates or its officers, directors, employees or agents
or adversely affect their business reputation or goodwill.
 
      (iv) Release and Waiver of Claims. Upon your termination following a
Change in Control, and in consideration of the benefits provided to you under
the terms of this Agreement, you hereby agree to execute the Release and Waiver
of Claims attached hereto as Exhibit A.
 
8. CONFLICT AMONG AGREEMENTS OR BENEFIT PLANS.
 
      In the event of any conflict between the provisions of this Agreement and
the terms of any other agreement or any benefit plan under which you are
entitled to receive payments or benefits, or any agreement, instrument, other
document or undertaking between you and the Company, unless otherwise
specifically provided herein, the provisions of this Agreement shall control;
provided, however, that the terms of the Offer Letter shall be deemed to
expressly not conflict with the provisions of this Agreement.
 
9. DEDUCTION; WITHHOLDING; SET-OFF.
 
      Notwithstanding any other provision of this Agreement, any payments or
benefits hereunder shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company reasonably
determines it should withhold pursuant to any applicable law or regulation. The
amounts due and payable under Sections 4 and 5 shall at all times be subject to
the right of set-off of the Company for any amounts or debts incurred and owed
by you to the Company whether during your employment or after the Date of
Termination.
 
10. LEGAL FEES.
 
      If any contest or dispute shall arise between you and the Company
regarding or as a result of any provision of this Agreement, the Company shall
reimburse you for all reasonable attorney's fees and legal expenses incurred by
you up to a maximum of $15,000.00 in connection with such contest or dispute,
but only if you are successful with respect to substantially all of your
material claims pursued or defended in connection with such contest or dispute.
Such reimbursement shall be made as soon as practicable following the final
adjudication (not subject
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 14
 
to further appeal) by a court or arbitrator, or by settlement of the dispute to
the extent that the Company receives reasonable written evidence of such fees
and expenses.
 
11. LITIGATION AND REGULATORY COOPERATION.
 
      You agree to cooperate fully with the Company or any related entity in the
defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company or any related entity
that relate to events or occurrences that transpired during your employment with
the Company. Your full cooperation in connection with such claims or actions
shall include, but not be limited to, being available to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of the Company
at mutually convenient times. In scheduling your time to prepare for discovery
or trial, the Company shall attempt to minimize interference with any other
employment obligations that you may have. You also shall cooperate with the
Company in connection with any investigation or review of any foreign, federal,
state or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while you were employed by the Company.
The Company shall reimburse you for any reasonable out-of-pocket expenses
incurred in connection with any litigation and regulatory cooperation provided
under this Section 11 after your Date of Termination. In the event that you are
named personally in any legal proceeding relating to your activities on behalf
of the Company, you will be eligible for indemnification to the extent permitted
by the Company's By-laws and other governance documents, as well as the
Company's liability insurance policies, as in effect at the time you make a
claim for indemnification.
 
12. NOTICE.
 
      For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be delivered to
each party at each party's respective address set forth on the first page of
this Agreement, and shall be deemed effectively given or delivered: (i) upon
personal delivery to the party to be notified, (ii) three (3) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (iii) one (1) business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; provided that all notices to the Company should be
directed to the attention of the Chairman of the Board of the Company, with a
copy to the General Counsel of TriPath Imaging, Inc.
 
13. ENTIRE AGREEMENT.
 
      Except for the Offer Letter and the Prior Agreements, this Agreement
represents the entire agreement of the parties with respect to the subject
matter hereof and, except to the extent provided for herein, supersedes any
other agreement between the parties with respect to such subject matter.
 
14. SUCCESSORS; BINDING AGREEMENT.
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 15
 
      (i) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company or its successor in the same amount
and on the same terms as he would be entitled to hereunder if he terminates his
employment for Good Reason following a Change in Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
 
      (ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
 
15. COUNTERPARTS.
 
      This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
in the same instrument.
 
16. MISCELLANEOUS.
 
      (i) Nothing contained in this Agreement, nor any action taken hereunder,
shall be construed as a contract of employment, or as giving you any right to be
retained as an employee of the Company. Your employment will remain at-will and
your obligations under this Agreement shall not be affected by any change in
your position, title or function with, or compensation by the Company.
 
      (ii) No provision of this Agreement may be modified, waived, or discharged
unless such waiver, modification, or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board of Directors
of the Company.
 
      (iii) No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any time prior
to subsequent time.
 
      (iv) The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of North Carolina.
 
      (v) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 16
 
      (vi) Your rights to payments or benefits under this Agreement shall not be
made subject to option or assignment, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any action in violation
of this Section 16(vi) shall be void.
 
             [The remainder of this page intentionally left blank.]
 
<PAGE>
 
Dr. Paul R. Sohmer, M.D.
August 3, 2004
Page 17
 
      If this Agreement correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this subject.
 
                                   Sincerely,
 
                                   TRIPATH IMAGING, INC.
 
                                   /s/ Robert E. Curry, Ph.D.
                                   ---------------------------------------------
                                   Name:  Robert E. Curry, Ph.D.
                                   Title: Chairman of the Compensation Committee
 
I acknowledge receipt and agree with the foregoing terms and conditions.
 
/s/ Paul R. Sohmer, M.D.
--------------------------
Name: Paul R. Sohmer, M.D.
 
<PAGE>
 
                                    EXHIBIT A
 
                          RELEASE AND WAIVER OF CLAIMS
 
      In exchange for good and valuable consideration, the sufficiency of which
is hereby acknowledged, I ______________, on behalf of myself, my executors,
heirs, administrators, assigns and anyone else claiming by, through or under me,
irrevocably and unconditionally, release, and forever discharge TriPath Imaging,
Inc., its directors, officers, employees, agents and predecessors, successors,
assigns and related and affiliate entities (collectively, the "Company"), from,
and with respect to, any and all debts, demands, actions, causes of action,
suits, covenants, contracts, wages, bonuses, damages and any and all claims,
demands, liabilities, and expenses (including attorneys' fees and costs)
whatsoever of any name or nature both in law and in equity ("Claim") which I now
have, ever had or may in the future have against the Company by reason of any
matter, cause or thing which has happened, developed or occurred before the
signing of this Release, including, but not limited to, any and all suits in
tort or contract, and any Claims or suits relating to salary, wages, bonuses and
commissions, the breach of an oral or written contract, misrepresentation,
defamation, and interference with prospective economic advantage, interference
with contract, intentional and negligent infliction of emotional distress,
negligence, breach of the covenant of good faith and fair dealing, and Claims
arising out of, based on, or connected with my employment by the Company and the
termination of that employment including any causes of action or Claims for
unlawful employment discrimination of any kind, arising under or based on Title
VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act, as amended; the Equal Pay Act of 1963; the NC Wage and Hour Act;
the NC Handicapped Persons Protection Act; the NC Equal Employment Practices
Act; the NC Retaliatory Employment Discrimination Act and any other state or
federal equal employment opportunity or anti-discrimination law, policy, order
or regulation affecting or relating to Claims or rights of employees, which I
ever had, now have, or claim to have against the Company; provided, however,
that this Release shall expressly not apply to, and I am not waiving, any claims
that I may have against the Company with respect to or arising in connection
with that certain Change of Control Letter Agreement between the Company and me
dated as of August 3, 2004.
 
      I understand that this is a full and general release and includes any
claim under the Age Discrimination in Employment Act. I acknowledge that I have
been advised in writing to consult with legal counsel before signing this
Release. I was given a period of at least twenty-one days to consider signing
this release and I have seven days from the date of signing to revoke my
acceptance.
 
      I have read the general release, fully understand it and freely and
knowingly agree to its terms.
 
      Dated this ____ day of ____________, 200_.
 
                                                _________________________
                                                By:
 
<PAGE>
 
                                   SCHEDULE A
 
                                PRIOR AGREEMENTS
 

 

Exhibit 10.1

Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes
, New Jersey 07417

August 25, 2006

TriPath Imaging, Inc.
780 Plantation Drive,
Burlington, NC 27215

 

 

 

Attention:

 

Paul R. Sohmer, M.D.
Chief Executive Officer

Ladies and Gentlemen:

     Reference is made to the letter agreement, dated August 16, 2006 (the “Original Agreement”) between Becton, Dickinson and Company (“BD”) and TriPath Imaging, Inc. (the “Company”). In light of the ongoing negotiations regarding a possible business combination transaction involving BD and the Company (the “Transaction”), BD and the Company hereby agree that the Termination Date, as defined in the Original Agreement, shall be revised and extended to 11:59 p.m. (New York City time) on September 1, 2006. The Original Agreement shall remain in full force and effect except for such revision and extension of the Termination Date.

     If the foregoing is acceptable and agreed to by you, please sign on the line provided below to signify such acceptance and agreement.

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Sincerely,


Becton, Dickinson and Company
 

 

 

By:  

 

 

 

 

Name:  

 

 

 

 

Title:  

 

 

 

Accepted and agreed as of
the date first written above:

TriPath Imaging, Inc.

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

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