EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This is an EMPLOYMENT AGREEMENT "Agreement" effective as of
January 21, 1999 ("Effective Date"), between XXXXX XXXXXXXXXX, an individual
("Employee"), and MOLECULAR BIOSYSTEMS, INC., a Delaware corporation ("the
Company").
1. EMPLOYMENT.
a. POSITION. The Company agrees to employ Employee
as its CHIEF EXECUTIVE OFFICER AND PRESIDENT.
b. DUTIES. Employee shall diligently, and to the
best of his ability, perform all such duties incident to his position and use
his best efforts to promote the interests of the Company.
c. TIME TO BE DEVOTED TO EMPLOYMENT. Employee shall
devote his full time and energy to the business of the Company and shall not be
engaged in any competitive business activity without the express written consent
of the Company except Employee may serve on the Board of Directors of no more
than two (2) other corporations (other than family businesses in India to which
Employee does not devote substantial time) with the prior written approval of
the Board of Directors. Employee hereby represents that he is not a party to any
agreement which would be an impediment to entering into this Employment
Agreement and that he is permitted to enter into this Employment Agreement and
perform the obligations hereunder.
d. AT-WILL EMPLOYMENT. Employee shall be employed
on an at-will basis and may terminate his employment and may be terminated from
his employment at any time with or without cause, subject to the severance
payment provisions set forth in paragraphs 14 and 16 below.
2. COMPENSATION AND BENEFITS.
a. ANNUAL SALARY. In consideration of and as
compensation for the services agreed to be performed by Employee hereunder, the
Company agrees to pay Employee, as of the Effective Date of this Agreement, an
annual Base Salary of $315,000, payable in accordance with the Company's regular
payroll schedule, less applicable withholdings and deductions. Employee's
annual Base Salary is subject to being increased as part of the Company's annual
salary review process. Changes to Employee's annual Base Salary, as well as
other terms and conditions of his compensation, must be approved by the Board of
Directors of the Company (the "Board").
b. ANNUAL BONUS. Employee may be paid an annual
bonus to be determined by the Company's Board of Directors based on Employee's
performance, the Company's performance, and any other reasonable factors
determined by the Board of Directors.
c. STOCK OPTIONS. Employee shall be eligible for
additional stock option awards at the discretion of the Board of Directors. In
the event of a termination Without Cause or a Constructive Termination not
following a Change of Control, Employee shall have two years from the date of
termination to exercise options vested as of the termination date, or any lesser
period as mandated by law.
d. PARTICIPATION IN BENEFIT PLANS. Employee shall be
eligible for family medical, dental, short and long term disability, life
insurance coverages, eligibility in the Corporation's 401(k) plan, vacation and
any other such benefits as are made available to the executives of the
Corporation, all on such terms and conditions (including, where applicable,
cost-sharing with the Employee) as are applicable to participants generally. The
Company reserves the right to amend, modify or terminate any employee benefits
at any time for any reason.
e. REIMBURSEMENT OF EXPENSES. The Company shall
reimburse Employee for all reasonable business expenses incurred by Executive on
behalf of the Company provided that: (i) such reasonable expenses are ordinary
and necessary business expenses incurred on behalf of the Company, and (ii)
Employee provides the Company with itemized accounts, receipts and other
documentation for such reasonable expenses as are reasonably required by the
Company.
3. DEFINITIONS. The following definitions shall apply with
respect to this agreement.
a. BASE SALARY means the Employee's annual salary;
it shall not include overtime pay, commissions or any other benefits and special
allowances for which the Employee is eligible (e.g., bonuses). If Employee's
annual salary is adjusted following the Effective Date of this Agreement, the
adjusted annual salary would then represent Employee's Base Salary. "Weekly
Salary" shall mean the Base Salary divided by fifty-two. "Monthly Salary" shall
mean Base Salary divided by 12.
b. CHANGE OF CONTROL shall mean a change in
ownership or control of the Company effected through any of the following
transactions:
(1) a merger, consolidation or
reorganization approved by the Company's stockholders, unless securities
representing more than fifty percent (50%) of the total combined voting power of
the voting securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Company's outstanding
voting securities immediately prior to such transaction, or
(2) any stockholder-approved transfer or
other disposition of all or substantially all of the Company's assets, or
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(3) the acquisition, directly or indirectly
by any person or related group of persons (other than the Company or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Company), of beneficial ownership (within the meaning of Rule
13d3 of the 0000 Xxx) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities pursuant
to a tender or exchange offer made directly to the Company's stockholders, or
(4) a change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such that a majority
of the Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination.
c. CONSTRUCTIVE TERMINATION shall occur if Employee
resigns his employment within ninety (90) days of the occurrence of any of the
following events: (i) any reduction in the Base Salary of the Employee; (ii) a
relocation (or demand for relocation) of Employee's place of employment to a
location more than thirty-five (35) miles from Employee's current place of
employment; or (iii) a significant or material reduction in Employee's job
duties or level of responsibility or the imposition of significant or material
limitations on Employee's autonomy in his position.
d. 1934 ACT means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
e. TERMINATION FOR CAUSE means a termination of
Employee's employment by the Company due to the Employee's:
(1) Willful misconduct that has a material
adverse effect on the Company's operations, prospects, reputation or business;
(2) Conviction of a felony;
(3) Act of fraud against, or theft of
property belonging to, the Company.
f. TERMINATION WITHOUT CAUSE means a termination of
Employee's employment by the Company for any reason other than those specified
in subparagraph 3.e.(1) through (3) above.
g. DISABILITY shall mean a determination by the
Company's Board of Directors that as a result of any physical or mental injury
or disability, Employee has been unable to perform the essential functions of
his job, with or without reasonable accommodation, for a period of six
consecutive months or for eight months out of any twelve-month period. If such
circumstances have occurred, then the Board of Directors may give written notice
to Employee of a termination due to Disability.
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4. EMPLOYMENT. The Company shall be entitled to all of the
benefits and profits arising from or incident to the work, services and advice
rendered by the Employee relating to the work performed for the Company. The
Employee shall make all information available to the Company that relates to the
Company's business of which he has any knowledge and shall not use any such
information or the benefits of any such information for his personal profit or
that of any third party. The Employee agrees to use his best efforts to promote
the interests of the Company including, where appropriate, the publication of
articles in medical and scientific journals and the participation in medical and
scientific seminars and symposiums relating to the business and affairs of the
Company and/or his research efforts performed for and on behalf of the Company.
5. DISCLOSURES. Employee shall promptly disclose in writing to
the officials designated by the Company to receive such disclosures, complete
information concerning each and every invention, discovery, improvement, device,
design, apparatus, practice, process, method or product (hereinafter referred to
as "Inventions"), whether Employee considers them patentable or not, made,
developed, perfected, devised, conceived or reduced to practice by Employee,
either solely or in collaboration with others, during the period of Employee's
employment by the Company, and up to and including a period of twelve (12)
months after termination of employment, whether or not during regular working
hours, relating either directly or indirectly to the business, products,
practices or techniques of the Company or to the Company's actual or
demonstrably anticipated research or development, or resulting from any work
performed by Employee for the Company or with the equipment, supplies,
facilities or confidential information of the Company.
6. CONFIDENTIALITY. Employee recognizes that his employment
with the Company will involve contact with information of substantial value to
the Company, which is not generally known in the trade and which gives the
Company an advantage over its competitors who do not know or use it, including
but not limited to techniques, designs, drawings, processes, inventions,
developments, equipment, prototypes, sales and customer information, and
business and financial information, relating to the business, products,
practices or techniques of the Company (hereinafter referred to as "Confidential
Information"). Employee shall at all times regard and preserve as confidential
such Confidential Information obtained by Employee from whatever source and
shall not, either during Employee's employment or thereafter, publish or
disclose any part of such Confidential Information in any manner, or use the
same except on behalf of the Company, without the prior written consent of the
Company. Further, Employee shall, during his employment and thereafter, refrain
from any acts or omissions that would reduce the value of such Confidential
Information to the Company.
7. ASSIGNMENT OF RIGHTS. Employee hereby agrees that any
Inventions made, developed, perfected, devised, conceived or reduced to practice
by Employee during the period of his employment by the Company, and any other
Inventions made, developed, perfected, devised, conceived or reduced to practice
by Employee during said period of twelve (12) months after termination of his
employment if based upon the Confidential Information of the Company, relating
either directly or indirectly to the business, products, practices or techniques
of the Company or to the Company's actual or demonstrably anticipated research
or development, or resulting from any work performed by Employee for the Company
or with the equipment, supplies, facilities or Confidential Information of the
Company, are the sole property of the
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Company, and hereby assigns and agrees to assign to the Company, its successors
and assigns, all of my right, title and interest in and to said Inventions, and
any patent applications or Letters Patent thereon.
NOTIFICATION
THIS AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO
EQUIPMENT, SUPPLIES, FACILITY, OR TRADE SECRET INFORMATION OF THE COMPANY WAS
USED AND WHICH WAS DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, AND (a) WHICH DOES
NOT RELATE (1) TO THE BUSINESS OF THE COMPANY OR (2) TO THE COMPANY'S ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (b) WHICH DOES NOT RESULT
FROM ANY WORK PERFORMED BY EMPLOYEE FOR THE COMPANY, AS DEFINED AND PROVIDED BY
SECTION 2870 OF THE CALIFORNIA LABOR CODE.
8. COVENANT OF COOPERATION. Employee shall, at any time during
employment or thereafter, upon request and without further compensation
therefor, but with all reasonable expenses incurred by Employee to be
reimbursed, do all lawful acts, including but not limited to the execution of
papers and oaths, the giving of testimony, and the obtaining of evidence that in
the opinion of the Company, its successors or assigns, may be necessary or
desirable for obtaining, sustaining, reissuing or enforcing Letters Patent in
the United States and throughout the world for said Inventions, and for
perfecting, recording or maintaining the title of the Company, its successors
and assigns, to said Inventions and to any patent applications made and any
Letters Patent granted for said Inventions in the United States and throughout
the world.
9. PATENT ENFORCEMENT. The Company shall have the sole
discretion whether to obtain, maintain, modify or enforce any domestic or
foreign patent for said Inventions assigned to the Company pursuant to this
Agreement. The Company is free to enter into any licensing or assignment
agreement with any third party or to use whatever means it deems best to
develop, promote or market said Inventions assigned to the Company pursuant to
this Agreement or any domestic or foreign patent thereof.
10. CLAIMS BY THIRD PARTY. As to any Inventions which were
made, developed, perfected, devised, conceived or reduced to practice by
Employee during the period of his employment by the Company, and up to and
including a period of twelve (12) months after termination of his employment,
but which are claimed for any reason to belong to an entity or person other than
the Company, Employee will promptly disclose the same in writing to the Company
and shall not disclose the same to others if the Company, within twenty (20)
days thereafter, shall claim ownership of such Inventions under the terms of
this Agreement.
11. RECORD KEEPING. Employee shall keep complete, accurate and
authentic accounts, notes, data and records of any and all of said Inventions in
the manner and form requested by the Company. Such accounts, notes, data and
records, including all copies thereof, shall be the property of the Company, and
upon its request, Employee will promptly surrender the same to it, or if not
previously surrendered, Employee will promptly surrender the same to the Company
at the conclusion of his employment.
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12. RECORDS ARE PROPERTY OF COMPANY. Employee agrees that all
accounts, notes, data sketches, drawings and other documents and records, and
all material and physical items of any kind, including all reproductions and
copies thereof, which relate in any way to the business, products, practices or
techniques of the Company or contain Confidential Information, made by Employee
or that come into Employee's possession by reason of his employment are the
property of the Company and shall be promptly surrendered to the Company at the
conclusion of Employee's employment.
13. NON-SOLICITATION. Employee shall not, for a period of one
(1) year from the date of termination of employment with the Company, directly
or indirectly solicit the services of any employee or induce or attempt to
induce current employees of the Company to terminate their employment with the
Company. However, this obligation shall not affect any responsibility Employee
may have as an employee of the Company with respect to the bona fide hiring and
firing of Company personnel.
14. SEVERANCE PAYMENTS AND OTHER BENEFITS IN THE EVENT OF
TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE OF CONTROL.
a. In the event that either of the following two
events occur within two years after a Change of Control, the Company will
provide the following payment and benefits to Employee (or his estate): (i)
Employee's employment is terminated by the Company Without Cause, or (ii)
Employee's employment terminates as a result of a Constructive Termination:
(1) The Company shall make the following
payments to Employee:
(A) ACCRUED SALARY AND BENEFITS.
The Company shall pay Employee's Base Salary through the effective date of
termination of Employee's Employment. In addition to the Severance Payments
payable to an eligible employee as described below, such employee shall receive
the following: (i) payment for accrued but unused vacation time; and (ii) group
health coverage, including eligible medical, dental and vision insurance through
the last day of the calendar month during which the termination occurs (group
health coverage after such date being governed by COBRA.)
(B) SEVERANCE PAYMENTS. The Company
shall pay to Employee three (3) times the sum of (a) his annual Base Salary in
effect immediately prior to the Change of Control and (b) a payment equal to the
higher of (x) 100% of Employee's target bonus as determined under the Company's
incentive compensation plan or (y) an average of the last three actual bonuses
awarded to Employee. If an annual incentive compensation plan has not been
implemented, then the determination in (y) will govern.
(C) MANNER OF PAYMENT. Severance
Payments may be paid in accordance with regular payroll periods, in a single
lump sum payment, or any combination thereof, as deemed appropriate by the
Company. Taxes and other appropriate deductions will be withheld; however, 401k
contributions will not be allowed.
(2) The Company shall provide the following
benefits to Employee:
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(A) COBRA. An eligible Employee's
existing coverage under the Company's group health plan (and, if applicable, the
existing group health coverage for eligible dependents) will end on the last day
of the month in which the eligible Employee's employment terminates. The
eligible Employee and his eligible dependents may then be eligible to elect
temporary continuation coverage under the Company's group health plan in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"). The eligible Employee (and, if applicable, his eligible
dependents) will be provided with a COBRA election form and notice which
describe his rights to continuation coverage under COBRA. If an eligible
Employee elects COBRA continuation coverage, then the Company will pay for COBRA
coverage (such payments shall not include COBRA coverage with respect to the
Company's Section 125 health care reimbursement plan) for (i) eighteen (18)
months, or (ii) the maximum period permitted under COBRA. If Employee does
exhaust the applicable COBRA period, the Company will reimburse Employee for the
cost of an individual health insurance policy in an amount not to exceed the
amount of the monthly COBRA premium previously paid by the Company pursuant to
this paragraph for the remainder of the three year period following Employee's
termination of employment. After such period of Company-paid coverage, the
eligible employee (and, if applicable, his eligible dependents) may continue
coverage at his own expense in accordance with COBRA or other applicable laws.
No provision of this agreement will affect the continuation coverage rules under
COBRA. Therefore, the period during which the eligible employee must elect to
continue the Company's group health plan coverage under COBRA, the length of
time during which COBRA coverage will be made available to the eligible
employee, and all the eligible employee's other rights and obligations under
COBRA will be applied in the same manner that such rules would apply in the
absence of this Plan. In the event, however, an Employee becomes eligible for
benefits under another plan prior to the expiration of the period in which the
Company is paying benefit premiums, the Company shall no longer be obligated to
pay such benefit premiums. The Employee is required to notify the Company of
eligibility for benefits under another plan and is expected to enroll in the new
group plan at the first eligible opportunity unless Employee chooses, at
Employee's sole expense, to continue COBRA benefits through the Company. If
Employee fails to notify the Company of Employee's eligibility for alternative
benefits, the Company shall have the right to discontinue payment of COBRA
premiums upon thirty (30) days notice to Employee. In no event shall a cash
payment be made to Employee in lieu of the payment of COBRA premiums. The
payment of COBRA premiums by the Company shall not extend the maximum eligible
COBRA coverage period.
(B) OUTPLACEMENT SERVICES. The
Company will make available to Employee, upon his request, outplacement services
provided by a reputable outplacement counselor selected by the Company for a
period of nine months following termination. The Company will assume the cost of
all such outplacement services. In no event will a cash payment be made in lieu
of outplacement benefits.
15. ACCELERATION OF STOCK OPTIONS IN THE EVENT OF A CHANGE OF
CONTROL. In the event of a Change of Control (whether or not followed by
termination of Employee's employment), all stock options under any Company stock
option plan which Employee holds at the time of such Change of Control shall
become fully "vested" (i.e., immediately exercisable). The Company shall also
extend the period of exercisability of those stock options to the maximum of
four years, or the natural expiration of the stock options, whichever is
earlier.
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16. SEVERANCE PAYMENTS AND OTHER BENEFITS IN THE EVENT OF
TERMINATION OTHER THAN FOLLOWING A CHANGE OF CONTROL.
a. In the event Employee's employment is terminated
Without Cause or there is a Constructive Termination other than within two (2)
years following a Change in Control, the Company shall provide the payments and
other benefits specified below to Employee:
(1) The Company shall make the following
payments to Employee:
(A) ACCRUED SALARY AND BENEFITS.
The Company shall pay Employee's Base Salary through the effective date of
termination of Employee's Employment. In addition, Employee shall receive the
following: (i) payment for accrued but unused vacation time; and (ii) group
health coverage, including eligible medical, dental and vision insurance through
the last day of the calendar month during which the termination occurs (group
health coverage after such date being governed by COBRA.)
(B) SEVERANCE PAYMENTS. The Company
shall pay to Employee a severance payment equal to eighteen (18) months of
Employee's Monthly Salary in effect immediately prior to the termination. This
eighteen-month period will be referred to as the "Severance Period".
(C) MANNER OF PAYMENT. These
Severance Payments may be paid in accordance with regular payroll periods over
the duration of the Severance Period, in a single lump sum, or any combination
thereof, as deemed appropriate by the Company. Taxes and other appropriate
deductions will be withheld however, 401(k) contributions will not be allowed.
(2) The Company shall provide the following
benefits to Employee:
(A) COBRA. An eligible Employee's
existing coverage under the Company's group health plan (and, if applicable, the
existing group health coverage for eligible dependents) will end on the last day
of the month in which the eligible Employee's employment terminates. The
eligible Employee and his eligible dependents may then be eligible to elect
temporary continuation coverage under the Company's group health plan in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"). The eligible Employee (and, if applicable, his eligible
dependents) will be provided with a COBRA election form and notice which
describe his rights to continuation coverage under COBRA. If an eligible
Employee elects COBRA continuation coverage, then the Company will pay for COBRA
coverage (such payments shall not include COBRA coverage with respect to the
Company's Section 125 health care reimbursement plan) for the Severance Period.
After such period of Company-paid coverage, the eligible employee (and, if
applicable, his eligible dependents) may continue COBRA coverage at his own
expense in accordance with COBRA. No provision of this agreement will affect the
continuation coverage rules under COBRA. Therefore, the period during which the
eligible employee must elect to continue the Company's
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group health plan coverage under COBRA, the length of time during which COBRA
coverage will be made available to the eligible employee, and all the eligible
employee's other rights and obligations under COBRA will be applied in the same
manner that such rules would apply in the absence of this Plan. In the event,
however, an Employee becomes eligible for benefits under another plan prior to
the expiration of the period in which the Company is paying benefit premiums,
the Company shall no longer be obligated to pay such benefit premiums. The
Employee is required to notify the Company of eligibility for benefits under
another plan and is expected to enroll in the new group plan at the first
eligible opportunity unless Employee chooses, at Employee's sole expense, to
continue COBRA benefits through the Company. If the Employee fails to notify the
Company of Employee's eligibility for alternative benefits, the Company shall
have the right to discontinue payment of COBRA premiums upon thirty (30) days
notice to Employee. In no event shall a cash payment be made to eligible
employees in lieu of the payment of COBRA premiums. The payment of COBRA
premiums by the Company shall not extend the maximum eligible COBRA coverage
period.
(B) OUTPLACEMENT. The Company will
make available to Employee, upon his request, outplacement services provided by
a reputable outplacement counselor selected by the Company for a period of nine
months following termination. The Company will assume the cost of all such
outplacement services. In no event will a cash payment be made in lieu of
outplacement benefits.
IN NO EVENT SHALL EMPLOYEE BE ENTITLED TO OR RECEIVE SEVERANCE BENEFITS UNDER
BOTH THIS PARAGRAPH 16 AND PARAGRAPH 14. Similarly, if Employee is eligible to
receive severance benefits under any other severance plan created by the Company
then it will reduce dollar for dollar any benefit due under this Agreement.
17. SECTION 280G LIMITATION ON SEVERANCE PAYMENTS. The
Severance Payments as described in Paragraph 14(1)(B) of this Agreement shall be
reduced as necessary so that the present value, as determined in accordance
Section 280G(d)(4) of the Internal Revenue Code, of the sum of (i) the Severance
Payments and (ii) all other payments, if any, that must be taken into account
for purposes of computation under Section 280G(b)(2)(A)(ii) of the Internal
Revenue Code in respect of Employee does not exceed 2.99 times Employee's base
amount, as "base amount" is defined in Section 280G(b)(3) of the Internal
Revenue Code .
18. RETENTION BONUS PROGRAM. Employee will continue to
participate in the Retention Package program as explained in the memorandum to
Employee dated December 3, 1998.
19. REAL ESTATE. Employee and Company jointly own Employee's
principal residence as tenants in common with respective percentage undivided
interests determined as follows: The Company's interest shall be calculated by
dividing $300,000 by the purchase price of the Property, the result to be
expressed as a percentage; Employee's interest shall be 100 percent minus the
Company's interest. These respective percentage interests shall remain constant
unless otherwise agreed by the Company and Employee or unless recalculated as
provided below. Notwithstanding the foregoing, (1) Employee shall maintain the
Property and pay all expenses associated with the Property, including but not
limited to all mortgage payments; upkeep; taxes; insurance; homeowner
association fees, if any; repairs and
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improvements (improvements shall be at Employee's option), and utilities; and
(2) Employee shall not alienate his interest in the Property without the
Company's consent. If the Employee fails or refuses for any reason to perform
the obligations and make the payments called for in clause (1) of the foregoing
sentence, the Company may cause the obligations to be performed and/or make the
payments and, at its option, (x) deduct any expenditures from the payment of any
compensation to Employee called for by this Agreement on any reasonable basis,
or (y) add the full amount of any expenditures directly to its $300,000 initial
equity and, using the sum as the new numerator, recalculate the respective
percentage undivided interests of the parties using as a denominator the same
purchase price of the property. Employee shall execute and cooperate in the
recording of all documents necessary to evidence the parties' agreement
contained in this paragraph.
Within 30 days of termination of Employee's employment for any
reason, the parties shall agree on a valuation of the Property. If they cannot
agree within that time, each party shall select a certified appraiser to perform
an appraisal of the property at each selecting party's expense, and the
appraisal shall be the average of the two appraisals. The valuation reached by
either method shall be called the Agreed Valuation. Within (a) three years from
the date of termination of Employee's employment due to death or Disability, (b)
two years from the date of termination of Employee's employment in the event of
a Termination for Cause or Constructive Termination, or (c) one year from the
date of termination of Employee's employment in the event of a resignation by
Employee (other than a Constructive Termination), Employee (or his estate) shall
take such actions as are necessary to purchase the Company's interest in the
Property for a purchase price equal to the Company's percentage interest in the
property at the date of appraisal times the Agreed Valuation. The Company shall
cooperate with Employee to sell the Property under such circumstances if the
Employee is unwilling or unable to purchase the Company's interest, and Employee
shall be deemed to have complied with his purchase obligation under this
Subparagraph if a purchasing third party pays the Company the purchase price.
If the Employee is deemed to receive taxable income for any
payment or reimbursement under this subparagraph, such payments will be grossed
up to account for all applicable income taxes.
20. RESIGNATION, DEATH OR DISABILITY. Employee will not be
entitled to any Severance Benefits or Severance Payments under Paragraphs 14 or
16, or under any other plan, or any other provision of this Agreement, if his
employment is terminated by the Company for Cause or if his employment
terminates due to disability, death or resignation (other than a resignation
which constitutes a CONSTRUCTIVE TERMINATION).
21. EXCLUSIVITY. Employee shall not, while employed by the
Company engage in any other employment or business venture for his account or on
behalf of others that relates, directly or indirectly, to the business and
affairs of the Company without the prior written consent of the Company.
22. PROHIBITION AGAINST ASSIGNMENT. Employee agrees that this
Agreement and the rights, interests and benefits hereunder shall not be
assigned, transferred, pledged or hypothecated in any way by Employee or any
executor, administrator, heir, legatee, distributee
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or any other person claiming under Employee by virtue of this Agreement and
shall not be subject to execution, attachment or similar process. Any attempt to
assign, transfer, pledge or hypothecate or otherwise dispose of this Agreement
or of such rights, interests and benefits contrary to the foregoing provisions,
or the levy of any attachment or similar process thereon shall be null and void
and without effect and shall relieve the Company of any and all liability
hereunder.
23. NOTICE. Any and all notices, designations, consents,
offers, acceptances or any other communication provided for herein shall be
given in writing by registered or certified mail, return receipt requested,
which shall be addressed, in the case of the Company, to its office in San
Diego, California, and in Employee's case to his last known place of residence
as reflected on the Company's records.
24. ENTIRE AGREEMENT. This Agreement, and any stock option or
stock purchase agreements that Employee has with the Company, constitute the
entire agreement between Employee and the Company and contains all of the
agreements between the parties with respect to the subject matter hereof; this
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties with respect to the subject matter hereof.
25. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of Employee and the Company and their respective heirs,
legal representatives, executors, administrators, and successors.
26. NO OTHER AGREEMENTS. Employee affirms that Employee has no
agreement with any other party that would preclude his compliance with his
obligations under this Agreement as set forth above.
27. GOVERNING LAW. This Agreement shall be subject to and
governed by the laws of the State of California.
28. AMENDMENT OF AGREEMENT. No change or modification of this
Agreement shall be valid unless the same is in writing and signed by Employee
and the Company. No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person or party to be charged.
29. 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.
30. BREACH. In the event either party breaches this Agreement
and the other party prevails in an action to enforce the terms of this
Agreement, the losing party agrees to pay to the prevailing party all reasonable
attorneys' fees and costs incurred by the prevailing party in prosecuting such
action, and all damages suffered by the prevailing party.
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31. HEADINGS. The headings of this Agreement are inserted for
convenience only and are not to be considered in construction of the provisions
hereof.
32. WAIVER OR 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.
33. ARBITRATION OF DISPUTES. Any dispute arising under this
Agreement shall be resolved through final and binding arbitration conducted
pursuant to the rules of the American Arbitration Association. This shall be in
lieu of any right to a jury trial, which right is expressly waived.
34. GENERIC DRUG ENFORCEMENT ACT CERTIFICATION. The
undersigned, certifies that he (1) has never been charged with or convicted of a
federal felony for conduct relating to the development, approval, or regulation
of any drug product or device regulated by the United States Food and Drug
Administration, and (2) has never been debarred or subject to a debarment
proceeding under the Generic Drug Enforcement Act of 1992.
(THIS SECTION HAS BEEN INTENTIONALLY LEFT BLANK FOR FORMATTING REASONS.)
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WHEREAS, the parties have executed this Agreement as of the
date first above written.
MOLECULAR BIOSYSTEMS, INC.
By:
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Director, Board of Directors,
Molecular Biosystems, Inc.
By:
----------------------------------
Xxxxx Xxxxxxxxxx
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