EXHIBIT 10.48
November 10, 1998
Xx. Xxxxxx X. Xxxxx
Molecular Biosystems, Inc.
00000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
RE: TERMS OF SEPARATION FROM MBI
Dear Xxxxx:
In accordance with our recent discussions, this letter agreement
("Agreement") will set forth the terms of our agreement regarding your
departure from MBI in conjunction with the Company reorganization.
1. DESCRIPTION. Both parties shall regard your departure as a necessary
reduction in force related to the present Company restructuring.
2. TIMING. Your separation shall be effective as of the end of the day,
December 31, 1998 ("Separation Date"). You will be paid all accrued
and unpaid salary through the Separation Date. During the time
between November 10, 1998 and December 31, 1998, you will be
considered a regular, full-time employee, and will be expected to work
at least thirty (30) hours per week in order for your normal benefit
coverage to continue.
3. EFFECTIVE DATE. This Agreement shall become effective on the eighth
day following your execution of this Agreement, unless you have
revoked acceptance during the seven days prior thereto. [SEE
Paragraph 13(b)]. Regardless of when this takes place, this Agreement
shall be deemed to have been in effect retroactive to November 13,
1998. This Agreement shall not become effective unless executed by
you and MBI.
4. RETENTION BONUS. In consideration of your cooperation and assistance
in MBI's recent restructuring, you will be provided with a one-time,
lump sum retention bonus of fifty thousand dollars ($50,000) payable
on November 10, 1998. At your request, MBI will withhold payroll
taxes at the customary rate utilized for lump-sum bonus payments to
employees, unless you choose higher withholding rates.
5. SEPARATION PAYMENTS. In consideration of your undertakings in this
Agreement, MBI shall provide you with severance benefits equivalent to
approximately ten and one-half (10.5) month's current salary
($155,692.31). This amount shall be paid to you in a lump sum on
January 4, 1999. In addition, you will be paid your normal payroll
checks on November 27, December 11 and December 25, 1998. Taxes and
other appropriate deductions will be withheld; however, contributions
to your 401(k), health care reimbursement account, or any other
benefit deductions will not be allowed. Any questions concerning the
scope of your severance package should be directed to the Human
Resources Department.
6. WELFARE AND OTHER BENEFITS. Regular medical, dental, vision, as well
as basic and optional life and accidental death and dismemberment
insurance will continue through December 31, 1998. Long-term
disability coverage will continue through your last day worked. In
addition:
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November 10, 1998
Page 2
(a) Medical, dental and vision insurance under MBI's policies for you
and currently insured dependents will be extended through COBRA
from January 1, 1999, through November 30, 1999, at MBI's expense
(unless you obtain other coverage prior to that time, in which
event you must notify MBI). Thereafter, you may elect to
continue COBRA coverage at your expense for an additional seven
(7) months. (Maximum COBRA coverage is eighteen (18) months.)
(b) You will be provided with the information needed to request the
option of converting the group life insurance and/or accidental
death and dismemberment insurance coverage to an individual
policy. You will work directly with CIGNA should you elect this
option. You will need to exercise this option within thirty-one
(31) days of the benefits termination date, December 31, 1998.
(c) You will be provided with the information needed to request the
option of converting the Long-Term Disability (LTD) insurance
coverage to an individual policy. You should work directly with
UNUM should you elect this option. You would need to exercise
this option within thirty-one (31) days of the Separation Date.
(d) Depending upon the amount of your 401(k) plan balance, you may
either elect to remain in the plan with no further deposits
(balance greater than $5,000), or elect a distribution of your
funds (balance less than $5,000). You will notify CIGNA within
thirty (30) days of the Separation Date as to how and to whom
your funds should be distributed. Information on how to initiate
your desired option will be provided by Human Resources.
(e) If you are a participant in the health care reimbursement plan,
your will have until March 31, 1999 to request reimbursement for
charges incurred through the Separation Date. Any such request
should be made directly to UNUM.
(f) You will be paid for all earned and unused vacation hours on
January 4, 1999. You will not accrue any additional vacation
following the Separation Date.
(g) MBI will repurchase from you one thousand eight hundred and
twenty eight (1828) shares of restricted MBI stock at the price
of eight dollars and seventy-five cents ($8.75) per share. This
repurchase amount ($15,995.00) will be paid to you on November
10, 1998.
(h) Your voicemail and pager service will be continued and paid for
by MBI through June 30, 1999. Further, you will be allowed to
retain your MBI computer equipment (laptop, monitor and keyboard)
and cellular phone.
Xx. Xxxxxx X. Xxxxx
November 10, 1998
Page 3
Representatives of Human Resources will be available to explain
details of the above items.
7. STOCK OPTIONS.
(a) CURRENT OPTIONS. You have been granted stock options as
described in the attached schedule. As of November 10, 1998, MBI
will accelerate the vesting of all unvested options. MBI will
also extend the period of exercisability of those options to the
maximum period available under our plans. (That is, the lapse
dates in the charts, which are already at the maximum, will not
be reduced on account of your ceasing to be an employee).
(b) Until June 30, 1999 ("Reporting Period"), you will be under the
same constraints imposed by MBI and securities laws on MBI vice
presidents regarding the exercise of options and the purchase and
sale of MBI shares. During the Reporting Period, you shall
notify us of your intentions in this regard (including options
exercises) and shall execute such forms, if any, as MBI and the
U.S. securities laws require. If you wish, you may use the
services of MBI's Finance Department to assist you in exercising
your options and selling your shares during the Reporting Period.
You acknowledge that taxes and commissions will be withheld from
any profit you make on the sale of stock following exercise and
sale during the Reporting Period. During the Reporting Period,
you will be notified monthly, along with other MBI Section 16(b)
reporting persons, as to the current trading status of MBI stock
(i.e., "green light", "yellow light", or "red light"). At no
time --- presently, or at any future time, during or after the
Reporting Period --- may you trade on MBI material inside
information.
7. PLACEMENT. MBI will provide you with six (6) months'
outplacement counseling and services through Xxx Xxxxx Xxxxxxxx
starting January 4, 1999 and running through June 30, 1999.
8. COOPERATION; NO RAIDING; NON-DISPARAGEMENT. You shall cooperate
with MBI in any and all governmental and/or third party
proceedings including, but not limited to, lawsuits and other
disputes. Following your separation, such cooperation shall be
at MBI's expense (except that MBI cannot pay for the content of
sworn testimony). You shall keep MBI advised of contacts by
governmental agencies and third parties, and shall reasonably
cooperate with MBI in handling any response. At your request,
MBI shall provide counsel to you, if the parties deem counsel
necessary or desirable, in any such proceeding. You shall not
voluntarily cooperate with, testify for, or otherwise assist
parties adverse to MBI in a dispute, although you may respond to
compulsory process (i.e., a valid subpoena).
Xx. Xxxxxx X. Xxxxx
November 10, 1998
Page 4
For a period of one (1) year following the Separation Date, you
shall not contact persons employed by MBI at the time to recruit
them for your business or any business by which you are employed
or with which you are affiliated, or otherwise encourage them to
leave MBI.
You shall not materially disparage MBI, and MBI shall not
materially disparage you, to any third parties.
9. CONTACTS BY POTENTIAL EMPLOYERS. Potential employers contacting
MBI will be told only that your separation was as the result of a
reduction in force (layoff); your title; your dates of
employment; and your final salary. MBI will provide you with
positive references.
10. EMPLOYMENT BY COMPETITORS. This Agreement does not limit your
ability to work for competitors of MBI, provided that, for a
period of one (1) year from the Separation Date, reasonably in
advance of accepting any employment with the company, individual,
or other entity engaged or planning to engage in the development,
manufacture, or marketing of ultrasound contrast agents
("Competitor"), you shall notify the President or Chief Executive
Officer of MBI. Prior to accepting any such employment, or
promptly following your engagement in any consulting relationship
with a Competitor, you shall give MBI the opportunity to discuss
your plans with you in order to explore any possible problems or
conflicts. While MBI shall not disparage you or attempt to
dissuade any Competitor from employing or engaging you, you
acknowledge that MBI may contact such Competitor informing it
truthfully of your confidentiality obligations to MBI. MBI shall
have no liability to you in the event of a decision by a
Competitor not to employ or engage you following contact by MBI.
Failure to provide this notice to MBI during this period shall be
deemed a material breach of this Agreement. You remain bound by
your confidentiality obligations to MBI even if you work for a
Competitor.
11. CONFIDENTIALITY. You will not remove any MBI information,
documents, or other property from its premises, and you will
return any MBI information currently in your possession or
control off MBI's premises. In addition:
(a) You acknowledge that in the course of your employment with
MBI you have had and will have access to and familiarity
with information of substantial value to MBI which is not
old or generally known to the public and which gives MBI an
advantage over its competitors who do not know or use it
including, but not limited to, strategies, business plans,
research, formulas and formulations, techniques, designs,
drawings, processes, inventions, developments, equipment,
prototypes, sales and customer information, and financial
information, relating to the business, products, and
practices of MBI (hereinafter referred to as "Confidential
Informa-
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November 10, 1998
Page 5
tion"). You agree at all times following your
termination to regard and preserve as confidential such
Confidential Information, and to refrain from publishing
or disclosing any part of such Confidential Information
and from using it except on behalf of MBI. You further
agree at all times to refrain from any other acts or
omissions that would reduce the value of such
Confidential Information to MBI and to take all
reasonably necessary and desirable precautions to prevent
such Confidential Information from being disseminated to
any third parties.
(b) You acknowledge that a breach of the terms of this paragraph
would threaten MBI with immediate and irreparable harm not
readily compensable in money damages, and that MBI would be
entitled to injunctive and declaratory relief to stop or
prevent any such breach.
Nothing in this paragraph shall be construed to prevent you from
using or disclosing your general knowledge of the imaging
industry (as opposed to MBI-specific information) acquired at any
time prior to or during the course of your employment.
12. GENERAL RELEASE. In consideration for the payments and other
consideration described in this Agreement, you hereby
unconditionally, irrevocably, and absolutely release and
discharge MBI, its employees, officers, directors, agents,
stockholders, independent contractors, attorneys, consultants,
predecessors, successors and assigns from any and all claims
related in any way to any acts, transactions, or occurrences
between you and MBI to date, including but not limited to all
losses, liabilities, claims, charges, demands and causes of
action, known or unknown, suspected or unsuspected, arising
directly or indirectly out of, or in any way connected with, your
employment with or termination from MBI. This includes, but is
not limited to, any claim of employment discrimination arising
under federal, state or local law, including the Age
Discrimination in Employment Act of 1967, as amended, the
Americans with Disabilities Act, the California Fair Employment
and Housing Act, any other statutory cause of action, and any
tort or contract claims.
WAIVER OF ADDITIONAL CLAIMS. Section 1542 of the Civil Code of the
State of California provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
You waive and relinquish any right or benefit which you may have under
this section or any other provision of the statutory or nonstatutory
law or any other jurisdiction to the full extent that you may lawfully
waive all such rights and benefits. In connection with such
Xx. Xxxxxx X. Xxxxx
November 10, 1998
Page 6
waiver and relinquishment, you acknowledge that you are aware that
you, your attorneys or agents may hereafter discover claims or
facts in addition to or different from those which they now know or
believe to exist, but that it is your intention thereby fully,
finally, and forever to release all claims, disputes, and
differences, known or unknown, suspected or unsuspected, which now
exist, may exist, or have existed between the parties, their
employees, agents, assigns, and other privies. Unless this
provision shall have been procured by fraud, the releases given
herein shall be effective regardless of the discovery or existence
of any such claim or fact.
13. ACKNOWLEDGEMENTS. You hereby further acknowledge and agree as
follows:
(a) NO PRE-EXISTING OBLIGATION. You acknowledge that but for
the entry by you and MBI into this Agreement, you are not
entitled to the additional payments and other consideration
provided for in these agreements (with the exception of
federal rights such as COBRA).
(b) TIME FOR REVIEW; EFFECTIVE DATE. You acknowledge that you
have been given twenty-one (21) days to consider the terms
of this Agreement. In addition, both parties acknowledge
that you may revoke your acceptance of this Agreement within
seven (7) days following your signature (which may occur
during the twenty-one (21) day period), and that at your
option, you may elect not to use the full twenty-one (21)
day period;
(c) ADVICE OF COUNSEL AND OTHER PROFESSIONAL ADVISORS. You
acknowledge that you have been advised in writing to consult
with an attorney and an accountant or tax advisor before
entering into these agreements. You acknowledge either that
you have done so and received counseling to your
satisfaction, or that you have declined to do so and
voluntarily executed this Agreement without fraud or undue
influence.
(d) EFFECTIVE DATE. This Agreement shall not become effective
or enforceable until seven (7) days after you sign this
Agreement. In other words, you may revoke your acceptance
of this Agreement within seven (7) days after you sign it.
Your revocation must be in writing and received by Xxxxx
Xxxxx within the seven (7) day period in order to be
effective. If you do not revoke acceptance within the seven
(7) day period, Your acceptance of this Letter Agreement
shall become binding and enforceable.
14. CONSEQUENCES OF BREACH. If you breach this Agreement, MBI may
terminate it, cease providing payments and benefits hereunder and
recover all payments and benefits already paid, in addition to
any other remedies it may have.
Xx. Xxxxxx X. Xxxxx
November 10, 1998
Page 7
15. OTHER MATTERS. You will receive materials prepared by Human
Resources describing various rights and duties, including
optional benefits, which will come into effect following your
termination. You will also receive instruments as are customarily
submitted to terminated employees. You will cooperate fully in
these separation meetings and execute or complete such
instruments at the time of your termination.
16. PROHIBITION AGAINST ASSIGNMENT. You shall not assign this
Agreement or any of the rights, interests and benefits hereunder.
However, you may provide for the assignment, gift, bequest, or
transfer of such benefits under this Agreement to your
survivor(s), or to a trust for their benefit, on your death, or
in the event that you suffer a major disability.
17. ENTIRE AGREEMENT. This Agreement between the parties dated
November 13, 1998, constitutes the entire agreement between the
parties hereto and contains all of the agreements between the
parties with respect to its subject matter. This Agreement
supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to their subject
matter.
18. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective heirs, legal
representatives, executors, administrators, and successors.
19. GOVERNING LAW. This Agreement shall be subject to and governed
by the laws of the State of California irrespective of the fact
that you may become a resident of a different state.
20. AMENDMENT OF AGREEMENT. No change or modification of this
Agreement shall be valid unless the same is in writing and signed
by both parties. No waiver of any provision of this Agreement
shall be valid unless in writing and signed by the person or
party to be charged.
21. SEVERABILITY. If any portion or portions of this Agreement shall
be, for any reason, deemed to be invalid or unenforceable, the
remaining portion or portions shall nevertheless be valid,
enforceable and carried into effect, unless to do so would
clearly violate the present legal and valid intention of the
parties hereto.
22. HEADINGS. The headings of this Agreement are inserted for
convenience only and are not to be considered in construction of
the provisions hereof.
23. WAIVER OF BREACH. The waiver by either of the parties hereto of
any breach of any provision hereof shall not be construed to be a
waiver of any succeeding breach of that provision or a waiver of
any other provision of this Agreement.
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November 10, 1998
Page 8
24. INDEMNIFICATION. With respect to any claim against you arising
out of your work for MBI as an officer or employee, you shall
have rights of indemnification against MBI under MBI's
certificate of incorporation and bylaws equivalent to those of an
MBI officer.
* * * *
If you are in agreement with these items, please execute the duplicate
originals of this Agreement and return them to Xxxxx Xxxxx.
Let me take this opportunity to thank you for your services to MBI over
the past several years. We all wish you every success in your future
endeavors.
Sincerely,
Xxxxx Xxxxxxxxxx
President and Chief Executive Officer
AGREED TO BY:
--------------------------------------
Xxxxxx X. Xxxxx
Date:
--------------------------------
Xx. Xxxxxx X. Xxxxx
November 10, 1998
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ATTACHMENT
