Exhibit 10.1
SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is entered into by and between
Xxxxxxx X. Xxxxxx, M.D. ("Xx.Xxxxxx") and Molecular Biosystems, Inc., a Delaware
corporation ("MBI") in light of the following:
RECITALS
A. MBI is engaged in the development and commercial distribution of
proprietary contrast imaging agents and such other products, research and
opportunities as it from time to time may pursue. Xx. Xxxxxx has been an
employee of MBI, and is currently serving pursuant to the terms of a
written employment agreement dated April 25, 1995 by and between MBI and
Xx. Xxxxxx, which was executed by the parties on May 5, 1995 (hereinafter
"Xxxxxx'x Employment Agreement").
B. Pursuant to the terms of Xxxxxx'x Employment Agreement, Xxxxxx is currently
serving in the capacity of Chairman of the Board of Molecular Biosystems,
Inc., and as a consultant to MBI performing the duties during the
consultant period defined in paragraph 2(b) of Xxxxxx'x Employment
Agreement.
C. As part of the orderly succession plan previously agreed to between them,
the parties now desire to effect a termination of Xx. Xxxxxx'x employment
with MBI, and a termination of Xx. Xxxxxx'x Employment Agreement.
D. In order to effectuate a termination of Xx. Xxxxxx'x employment and a
termination of Xx. Xxxxxx'x Employment Agreement, the parties have entered
into this Severance Agreement, which they intend shall supplant and replace
the terms of Xx. Xxxxxx'x Employment Agreement and otherwise define certain
rights between the parties.
COVENANTS AND AGREEMENTS
1.0 Definitions.
1.1 "MBI" means Molecular Biosystems, Inc., a Delaware corporation.
1.2 "Xxxxxx" or "Xx. Xxxxxx" mean Xxxxxxx X. Xxxxxx, M.D.
1.3 "Chairman of the Board" means MBI's Chairman of the Board.
1.4 "Employment Agreement" means that certain agreement entered into as
of April 25, 1995 between MBI and Xxxxxx, bearing the signatures of
Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx on May 5, 1995.
1.5 "Severance Agreement" means this agreement.
2.0 Resignation by Xx. Xxxxxx.
2.1 On even date with the execution of this Agreement Xx. Xxxxxx
will execute Exhibit A hereto, being a simple form resignation
from his position as a Board member and Chairman of the Board
of MBI. He will also on even date execute Exhibit B hereto,
being a resignation from his position as an employee or a
consultant during a consultancy period pursuant to the terms
of his April 25, 1995 Employment Agreement with MBI.
3.0 Termination of Xxxxxx'x Employment Agreement.
3.1 Xx. Xxxxxx'x Employment Agreement of April 25, 1995 shall be
terminated effective immediately upon Xx. Xxxxxx'x execution
of this Agreement and its Exhibits A and B. The parties intend
that this Severance Agreement shall completely amend,
supercede, replace, and render null and void Xx. Xxxxxx'x
Employment Agreement and the covenants contained therein,
except as expressly reserved or elsewhere preserved in this
Severance Agreement.
4.0 Payments to Xx. Xxxxxx.
In lieu of any and all rights and obligations under Xx. Xxxxxx'x Employment
Agreement, Xx.Xxxxxx shall be paid the following consideration for his
resignation from employment and from the board of MBI:
4.1 Commencing September 1, 1998, Xx. Xxxxxx will be paid a
severance payment of $*** (*** Dollars) payable as follows:
One-half, or $***, shall be paid on September 21, 1998,
following execution of this Agreement and its Exhibits A and
B; the remainder shall be paid in equal biweekly installments
of $*** over an 18 month period beginning September 15, 1998
and ending February 28, 2000 (the "Severance Period").
4.2 Accrued but unpaid salary up through September 4 , 1998.
4.3 Accrued but unused vacation up through September 4, 1998, calculated
to be 132.1 hours, for a gross payment of $16,671.
4.4 Payment of health insurance premiums under COBRA for continuation of
current health coverage for Xx.Xxxxxx and his family for an 18 month
period.
4.5 Xx. Xxxxxx will be permitted to take with him his customized desk and
related office furniture.
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4.6 Xx. Xxxxxx will be permitted to remain as a 401(k) plan participant to
the extent that the law allows.
4.7 Payments not to exceed $25,000 directly to vendors or to Xx. Xxxxxx,
as appropriate, for previously committed YPO expenses, car allowance,
and other business expenses,*** to be made within three business days
following the submission of invoices to MBI.
4.8 MBI will continue to indemnify Xx. Xxxxxx for any acts or omissions by
him during the course and scope of his employment with MBI, up to and
including September 3, 1998, to extent provided for by law.
4.9 ***
4.10 The company will honor all of Xx. Xxxxxx'x current rights under MBI
stock option and related agreements. In addition, however, the period
of time in which Xx. Xxxxxx will have the right to exercise his vested
options will be extended from 90 days post termination, to 10 years
post termination.
4.11 The Board desires to continue a positive and mutually supportive
relationship with Xx. Xxxxxx. In connection therewith, if Xx. Xxxxxx
is called upon to provide consulting services to the Board or to the
company on any current legal or other matter, he will be paid at the
pro rated rate of $*** per day plus expenses during the Severance
Period.
5.0 Additional Consideration to Xx. Xxxxxx.
5.1 The Board thanks Xx. Xxxxxx for his ***. Except as to ***.
5.2 MBI will issue to Xx. Xxxxxx a letter signed by a member of the Board
indicating, in substance, that based on the information provided by
***, the Board has ***.
5.3 The Parties agree that ***, and that each will, in any ***.
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6.0 Covenants During Severance Period. During this Severance Period defined in
section 4.1, Xx. Xxxxxx agrees:
6.1 That he shall not accept employment with a competitor nor
directly nor indirectly acquire a financial interest in or
render consulting service of any kind to a competitor, unless
he first receives a written waiver from MBI. These
restrictions shall not prohibit Xx. Xxxxxx from owning less
than 1% of the outstanding stock of any competitor whose stock
is listed on a national stock exchange.
6.2 For purposes of this Agreement a competitor is any business entity of
any kind engaged in ***.
7.0 Cooperation by Xx. Xxxxxx.
7.1 During the Severance Period, and subject to section 4.11, Xx.
Xxxxxx agrees to cooperate upon reasonable notice from MBI to
assist it in its business affairs and transactions, including
but not limited to providing assistance, information,
testimony, and other related actions in connection with any
litigation matters affecting MBI; and providing information
and documents in any way pertaining to the transactions and
affairs of MBI prior to the execution of this Agreement as MBI
shall determine.
7.2 During this Severance Period Xx. Xxxxxx agrees that he will not
directly or indirectly solicit, attempt to hire,or otherwise attempt
to induce current employees of MBI to breach their employment
relationships with MBI for the purpose of working for any entity
owned, in whole or in part, controlled or directed by Xx. Xxxxxx.
8.0 Return of Proprietary Information.
Concurrent with the execution hereof, Xx. Xxxxxx will return to MBI any
and all MBI proprietary or confidential information, unless otherwise
agreed in writing.
9.0 Release of Claims.
In return for the consideration paid hereunder, Xx. Xxxxxx agrees and
does hereby, for himself, his agents, heirs, successors, assigns and
executors, forever release and discharge MBI, its directors, officers,
agents, attorneys, employees, representatives, administrators and
successors from any and all claims, demands, actions and causes of
action, in law and equity, known or unknown, suspected or unsuspected,
that Xx. Xxxxxx has now or may have against MBI or any of them
(collectively referred to as "Releasees") related in any way to any
transactions or occurrences between and among them to date, ***.
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Xx. Xxxxxx agrees that the foregoing payments shall constitute the
entire amount of monetary consideration provided to him for any and all
rights owned or possessed by him with respect to any of the releases,
and that he will not seek additional compensation of any sort for any
claimed damage, costs or attorneys' fees in connection with the matters
encompassed in this Agreement and released by this release. MBI also
releases and discharges Xx. Xxxxxx from any and all claims it may have
against him to date, ***.
10.0 1542 Waiver.
The parties are aware of the provisions of California Civil Code Section
1542 which reads 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.
Xx. Xxxxxx and MBI hereby expressly waive all benefits in Section 1542.
11.0 Non Disclosure of Agreement.
11.1 Neither Xx. Xxxxxx, nor his attorneys, agents, heirs or assigns shall
disclose to any person *** this confidentiality provision is that Xx.
Xxxxxx *** the fact of this Agreement or its terms ***.
11.2 MBI agrees that it will, as well, treat the terms of this severance as
confidential, that it will not disclose the terms hereof, except as
may be required of it in preparing financial and tax reports to
appropriate authorities, or in otherwise complying with its
obligations under the securities laws of the United States, and of the
State of California, regarding dissemination of material information.
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11.3 The parties agree that a press release in the form attached as
Exhibit D may issue immediately upon notice to MBI that Xx. Xxxxxx
has approved this Agreement.
12.0 Applicable Law.
The validity, interpretation and performance of this Agreement shall be
construed and interpreted according to the laws of the State of
California.
13.0 Arbitration.
In the event of any dispute between MBI and Xx. Xxxxxx regarding the
interpretation or application of any provision of this Severance
Agreement, either MBI or Xx. Xxxxxx may unilaterally submit the dispute
for binding arbitration before the American Arbitration Association in
San Diego, California in accordance with its rules for commercial
arbitration in effect at the time. The award of the arbitrator or panel
of arbitrators may include attorneys fees to the prevailing party, and
judgment on the award may be entered in the United States District
Court for the Southern District of California, or in any other court of
competent jurisdiction.
14.0 Severability.
If any provision of this Agreement is held unenforceable by a court of
competent jurisdiction, that provision shall be considered severable
from this Agreement, and the remaining provisions of this Agreement
shall continue in force.
15.0 Amendment.
No amendment of this Agreement shall be effective unless it is in
writing, make specific reference to this Agreement, and is signed by
both MBI and Xx. Xxxxxx.
16.0 Prior Agreements Rendered Nugatory.
Xx. Xxxxxx'x Employment Agreements dated March 30, 1981, as amended,
and his Employment Agreement of April 25, 1995, shall terminate
effective with the execution hereof without the necessity of any
further action by either MBI or Xx. Xxxxxx.
17.0 Signatory's Representations.
The parties affixing their signatures hereto represent and warrant that
they have the authority to enter into the Severance Agreement on their
own behalf, and/or on behalf of their employer, and to bind all persons
or entities who may claim through them, ***.
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18.0 Knowing and Freely Entered.
This Agreement is entered into knowingly, freely, intelligently,
involuntarily by the parties, without any duress or coercion. The
parties have had a full opportunity to review and consider this matter
prior to executing this Agreement. The parties fully acknowledge that
they have also had a full opportunity to discuss its contents with
their respective representatives. The parties execute this Agreement
with full knowledge of its legal consequences.
19.0 Further Acts.
The parties agree to promptly perform any additional acts required to
effect their intentions ***.
20.0 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which together shall constitute one original agreement.
DATED: 9/4/1998 /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, M.D.
MOLECULAR BIOSYSTEMS, INC.
DATED: 9/9/1998 /s/ Xxxxx Xxxxxxxxxx
By: Xxxxx Xxxxxxxxxx
Title: President and CEO
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