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EXHIBIT 10.3
GENERAL RELEASE AND SEVERANCE AGREEMENT
This General Release and Severance Agreement (the "Agreement") is
entered into between Fuisz Technologies Ltd., a Delaware Corporation ("Fuisz")
on the one hand, and Xxxxxxx X. XxXxx ("XxXxx") and Castledermot Limited
("Castledermot"),a company incorporated in Bermuda, on the other.
WHEREAS, on December 16, 1996 Fuisz and XxXxx entered into an
Employment Agreement (the "Employment Agreement"), governing the terms of
XxXxx'x employment as President and Chief Executive Officer of Fuisz
International Ltd. ("FIL"), a wholly owned subsidiary of Fuisz;
WHEREAS, on April 18, 1997, Fuisz and XxXxx entered into a First
Amendment to the Employment Agreement (the "Amended Employment Agreement"),
governing XxXxx'x employment as President and Chief Executive Officer of Fuisz;
WHEREAS, on the same date Fuisz and XxXxx entered into an Assignment
Agreement, pursuant to which the Amended Employment Agreement was assigned to
Castledermot;
WHEREAS, on May 22, 1998, Fuisz and XxXxx entered into a letter
agreement amending the Amended Employment Agreement;
WHEREAS, on April 19, 1999, the Compensation Committee of Fuisz
extended the term of XxXxx'x Employment Agreement until December 16, 2001;
WHEREAS, Fuisz and XxXxx represent that these aforementioned agreements
(the "Employment Agreements") constitute all employment agreements between the
parties, other than agreements related to stock options, the Confidential
Disclosure Agreement entered into on December 16, 1996 and Fuisz's
indemnification obligations to XxXxx;
THEREFORE, in exchange for good and adequate consideration, the
adequacy of which is hereby specifically acknowledged, the Parties agree as
follows:
1. Termination of XxXxx'x Employment. XxXxx agrees to tender
his resignation as Director of Fuisz, and Fuisz agrees to accept that
resignation, effective 4:00 p.m. (E.S.T.) on May 24, 1999. XxXxx further agrees
that his employment as President and Chief Executive Officer of Fuisz is
terminated as of May 24, 1999. Moreover, XxXxx agrees that his employment and
service with Fuisz and all of its subsidiaries, including but not limited to
FIL, will be terminated on the Effective Date of this Agreement. Fuisz, XxXxx
and Castledermot hereby terminate the Assignment Agreement as of the Effective
Date of this Agreement.
2. Press Release. XxXxx has reviewed the press release
attached to this Agreement. XxXxx agrees not to issue any press release of his
own or to disavow the characterizations in the attached press release.
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3. Severance.
a. The "Severance Period" shall be the period extending from
the date of his termination of employment pursuant to paragraph 1 of this
Agreement to and including December 15, 2001.
x. Xxxxx agrees to pay severance to XxXxx in the amount of One
Million, Six Hundred Eighty Four Thousand, Seven Hundred and Thirty Dollars
($1,684,730) (representing salary and minimum bonuses under the Employment
Agreements for the Severance Period) within five business days after the
Effective Date.
4. Benefits.
a. During the Severance Period, Fuisz shall continue to cover
XxXxx under all benefit programs as provided for in paragraph 9 of the
Employment Agreement, under the same conditions that have applied to XxXxx and
would apply to XxXxx if his employment with Fuisz had continued until December
16, 2001. All such coverage after the Effective Date of this Agreement shall be
deemed to be provided pursuant to COBRA except that Fuisz shall pay all
applicable premiums.
x. Xxxxx agrees to pay one year of premiums as they become due
under the Pacific Mutual Policy from the date hereof until the first anniversary
of this agreement and to assign the policy to XxXxx.
5. Company Property/Account Balance. Fuisz agrees that it will
allow XxXxx to retain his company provided Sony computer and the Chrysler
Sebring which has previously been furnished for his use by Fuisz. Moreover,
Fuisz agrees to pay XxXxx'x outstanding business expenses incurred through the
date of this Agreement upon being presented proper documentation of such
expenses. Fuisz further agrees to maintain XxXxx'x telephone extension and voice
mail at its Chantilly, Virginia office until June 30, 1999.
6. Stock Options. Effective as of the Effective Date of this
Agreement, XxXxx shall maintain all options received pursuant to existing
agreements in accordance with their terms provided that, notwithstanding
anything to the contrary in such stock option agreements, all such options shall
become fully vested and exercisable as of the Effective Date of this Agreement.
Attachment A sets forth a schedule of all options held by XxXxx, their exercise
prices and their expiration dates.
7. Stock. Effective as of the Effective Date of this
Agreement, Fuisz irrevocably waives and agrees to the elimination of all
restrictions on the sale of all shares provided pursuant to paragraph 5 of the
Employment Agreement.
8. Taxes. To the extent that any payments provided under of
this Agreement are subject to any applicable federal, state, foreign, and local
income, excise or other taxes, XxXxx agrees to pay such taxes and not to seek
reimbursement or
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indemnification for such amounts from Fuisz. Fuisz shall withhold any amounts
required by law from such payment.
9. Beneficiaries. Any payment to which XxXxx is entitled under
this Agreement shall, in the event of his death, be made to his wife or such
other persons as XxXxx shall designate in writing to Fuisz from time to time. If
no such beneficiaries survive XxXxx, such payments shall be made to XxXxx'x
estate.
11. Effective Date. For purposes of all provisions set forth
herein, the Effective Date of this Agreement shall be the first day as of which
the seven-day revocation period described in paragraph 15b of this Agreement has
expired.
12. Integration of Employment Agreement. As of the Effective
Date of this Agreement, XxXxx agrees that this Agreement shall supersede and
terminate all benefits and rights under the Employment Agreements, other than
any benefits and rights (i) under the stock options set forth on Attachment A,
(ii) expressly set forth and restated herein, or (iii) pertaining to
indemnification of XxXxx. Within five business days after the Effective Date
Fuisz shall deliver to XxXxx a copy of Fuisz's directors and officers
indemnification insurance policy as currently in force.
13. Integration of Confidential Disclosure Agreement. XxXxx
and Castledermot hereby reconfirm their obligations under the Confidential
Disclosure Agreement, dated December 16, 1996 and found at Attachment B, and as
to Castledermot, those obligations under Article II.C. of the Assignment
Agreement dated April 18, 1997.
14. Mutual Release of Claims and Covenant Not to Xxx. Except
with regard to obligations created by, arising out of, or described in this
Agreement, the stock options set forth on Attachment A and agreements related to
indemnification, XxXxx, Castledermot and Fuisz agree for themselves and any
present or future successors, assigns, parents, subsidiaries, affiliates,
directors, officers, general or limited partners, employees, heirs,
beneficiaries, devisees, executors, administrators, attorneys, agents, and
representatives, to release, discharge, and covenant not to xxx each other for
any claims, debts, demands, accounts, judgments, rights, causes of action,
claims for equitable relief, damages, costs, charges, complaints, obligations,
promises, agreements, controversies, suits, expenses, compensation,
responsibility and liability of every kind and character whatever (including
attorneys' fees and costs), whether in law or equity, known or unknown, asserted
or unasserted, suspected or unsuspected, which they may now have against each
other; provided, however, that notwithstanding anything to the contrary set
forth herein, this General Release shall not extend to claims by XxXxx and
Castledermot for benefits under any employee pension benefit plans or retiree
welfare benefit plans in which XxXxx and Castledermot may have been a
participant by virtue of employment with Fuisz or for benefit claims under
employee welfare benefit plans for occurrences (e.g., medical care. death. or
onset of disability) arising after the execution of this Agreement by XxXxx and
Castledermot . XxXxx and Castledermot understand that this
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includes, but is not limited, the release to any rights or claims XxXxx and
Castledermot may have under Title VII of the Civil Rights Act of 1964 ("Title
VII"), which prohibits discrimination in employment based on race, national
origin, religion or sex; the Americans with Disabilities Act ("ADA"); and claims
pursuant to any other federal, state, or local law regarding discrimination
based on age, race, sex, pregnancy, religion, national origin, marital status or
disability, or any other unlawful basis, claims for alleged violation of any
other local, state, or federal law, regulation, ordinance, public policy, or
common law duty having any bearing whatsoever upon the terms and conditions of,
and/or the cessation of XxXxx'x employment with Fuisz. XxXxx and Castledermot
understand that this also includes a release by XxXxx and Castledermot of claims
for breach of express or implied contract, wrongful discharge, constructive
discharge, breach of an implied convenant of good faith and fair dealing,
negligent or intentional infliction of emotional distress, and any claim under
the Employee Retirement Income Security Act of 1974 ("ERISA") (except for claims
for benefits under pension benefit plans, retiree welfare benefit plans and
employee welfare benefit plans for occurrences arising after the execution of
this Agreement). Fuisz understands that this includes any and all claims against
XxXxx and/or Castledermot arising from or related to XxXxx'x services to Fuisz
or FIL. This release is intended to cover all claims in existence as of the date
of this Agreement, including claims about which Fuisz, XxXxx and/or Castledermot
know and claims about which Fuisz, XxXxx and/or Castledermot do not know. Fuisz,
on the one hand, and XxXxx and Castledermot, on the other, further represent
that it or he has not filed any claims against one another, or any of the
individuals covered by this Agreement, with any governmental agency or any
court.
15. Release of Age Discrimination Claims, Periods for Review
and Reconsideration.
x. XxXxx understands and agrees that paragraph 14 of this
Agreement includes a release of claims arising under the Age Discrimination in
Employment Act ("ADEA") and that this provision does not waive rights or claims
that may arise after the date the waiver is executed. XxXxx understands and
warrants that he has been given a period of twenty-one (21) days to review and
consider this Agreement. XxXxx is hereby advised to consult with an attorney
prior to executing the Agreement. XxXxx further warrants that he understands
that he may use as much of or all of this 21-day period as he wishes before
signing, and warrants that he has done so.
x. XxXxx further warrants that he understands that he has
seven (7) days after signing this Agreement to revoke the Agreement by notice in
writing to Xxxxxxx X. Xxxxx, M.D., Chairman of the Board. This Agreement shall
be binding, effective, and enforceable upon the expiration of this seven-day
revocation period with Xx. Xxxxxxx Xxxxx having received no such revocation, but
not before such time.
16. Arbitration. Fuisz, McVey, and Castledermot agree that any
dispute regarding any aspect of this Agreement or any act that allegedly has or
would violate any provision of this Agreement will be submitted to arbitration
in the county in
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Virginia where Fuisz's principle executive offices are located, in front of a
single arbitrator, in accordance with the rules of the American Arbitration
Association, as the exclusive remedy for such claim or dispute. Each party shall
submit three names of proposed arbitrators to the other side, including at least
two names from a list of approved AAA arbitrators. If the parties cannot
mutually agree on an arbitrator from such lists, each party shall strike two
names from the other party's list and the arbitrator shall then be chosen at
random by the AAA from the two remaining names. Fuisz and XxXxx agree that such
arbitration will be confidential and no details, descriptions, settlements or
other facts concerning such arbitration shall be disclosed or released to any
third party without the specific written consent of the other party, unless
required by law or court order or in connection with enforcement of any decision
in such arbitration. Any damages awarded in such arbitration shall be limited to
the contract measure of damages, and shall not include punitive damages. Each
party shall be responsible its own attorneys fees and costs associated with such
arbitration, except that the cost of the arbitration (such as the Arbitrator's
fee) shall be shared equally between Fuisz and XxXxx. Notwithstanding the
foregoing, XxXxx recognizes that a violation of the Confidential Disclosure
Agreement reconfirmed in paragraph 13 of this Agreement and found at Attachment
B could cause irreparable harm to Fuisz and Fuisz is entitled to seek injunctive
relief in court for any alleged violations of such provisions while arbitration
of the dispute is pending.
17. Provision Deemed Invalid. Should any of the provisions
herein be determined to be invalid by a court of competent jurisdiction, it is
agreed that this shall not affect the enforceability of the other provisions
herein and the parties shall negotiate the invalidated provision or provisions
in good faith to effectuate its or their purpose and to conform it or them to
law.
18. Waiver. The waiver by any party of a breach of any
provision herein shall not operate or be construed as a waiver of any subsequent
breach of any party.
19. Complete Agreement. This Agreement (including the
Attachments hereto), the stock options set forth on Attachment A, the agreements
related to indemnification, the Confidential Disclosure Agreement set forth at
Attachment B and those obligations under Article II.C. of the Assignment
Agreement dated April 18, 1997, set forth the all agreements between Fuisz,
McVey, and Castledermot and may not be modified, altered, changed, or terminated
except upon the express written consent of both a duly authorized representative
of Fuisz, McVey, and Castledermot. A copy of Article Seventh of Fuisz's Fourth
Amended and Restated Certificate of Incorporated, as amended, as currently in
effect is set forth at Attachment C to this Agreement. Should Fuisz request any
services from XxXxx subsequent to the Effective Date, Fuisz agrees to pay all
reasonable expenses and a mutually agreed upon daily or hourly rate to XxXxx for
such services.
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20. Understanding and Authority. The Parties understand and
agree that all terms of this Agreement are contractual and are not a mere
recital, and represent and warrant that they are competent to covenant and agree
as herein provided.
The parties have carefully read this Agreement in its entirety; fully
understand and agree to its terms and provision; and intend to agree that it is
final and binding on all parties.
IN WITNESS WHEREOF, and intending to be legally bound, the Parties have
executed the foregoing on the date shown below.
Dated: ___________________ By:
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Xxxxxxx X. XxXxx
Dated: ___________________ By:
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Name:
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Title:
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Castledermot Limited
Dated: ___________________ By:
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Xxxxxxx X. Xxxxx, M.D.
Chairman
Fuisz Technologies Ltd.
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