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EXHIBIT 10(7)
Severance Agreement of Xxxxxxx X. Xxxxxx
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made by and between HYCOR
BIOMEDICAL INC., Delaware corporation ("Company"), and XXXXXXX X. XXXXXX, PH.D.
("Executive") (together, the "Parties;" each, a "Party").
W I T N E S S E T H:
WHEREAS, the Parties have entered into an Employment Agreement dated as
of June 20, 1997 (the "Employment Agreement") whereby Executive holds the
offices of President and Chief Executive Officer of the Company; and
WHEREAS, the Parties wish to terminate their several relationships;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Parties, intending to be legally bound,
covenant and agree as follows:
1. VOLUNTARY TERMINATION OF EMPLOYMENT. Executive's employment with the
Company terminated voluntarily as of the close of business on July 17,
1998 (the "Termination Date"), at which time Executive resigned as an
employee and officer of the Company. Executive will no longer serve in
the capacities of President or Chief Executive Officer of the Company.
Concurrently with his resignation of employment, Executive resigned
from all directorships held with the Company and its subsidiaries.
Should any employer or prospective employer inquire of the Company
Executive's reason for leaving the employment of the Company "voluntary
resignation" will be given as the reason.
2. BENEFITS TO EXECUTIVE. In exchange for his resignation of his positions
as an employee, officer, and director of the Company, and
notwithstanding any provisions to the contrary in the Employment
Agreement, the Company will provide Executive with the following
benefits:
a. Notwithstanding his voluntary resignation from the Company,
Executive shall be provided with an amount equal to the salary
payments specified in Section 4(D) of the Employment
Agreement, namely twenty (20) months' salary at the rate of
$250,000 per annum, totaling $416,667, paid on the Company's
normal payroll dates, subject to applicable withholding;
provided that, on or after January 1, 1999, the Company at its
sole discretion shall have the option of paying any and all
remaining amounts due to him under this subparagraph a. in one
lump sum payment rather that in installments.
b. Executive shall be entitled to reimbursements for all
reasonable business expenses incurred prior to the Termination
Date.
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c. Executive shall be entitled to convert the Company's
membership in the Center Club to an individual membership in
his name, and shall be solely responsible for any and all fees
and costs imposed by the Center Club for such transfer.
d. Executive shall be allowed to retain the concert ticket series
at the Orange County Performing Arts Center that were
purchased in his name by the Company.
e. Pursuant to Paragraphs 4, 5, and 6 below, the Executive will
be allowed to repay his debt obligations to the Company by the
use of the insurance premiums for life and disability
insurance that otherwise would have been paid on his behalf
under the terms of Section 4(D) of the Employment Agreement.
3. MEDICAL BENEFITS. The Company will continue to provide health benefits
to Executive for an additional twenty (20) months following the
Termination Date, and will continue to pay for Executive's COBRA
premiums during that time.
4. LIFE INSURANCE. As of the Termination Date, the Company will transfer
to Executive ownership of all life insurance policies held in
Executive's name. Benefits under such policies may be continued at
Executive's expense.
5. DISABILITY SUPPLEMENT. As of the Termination Date, the Company will
transfer to Executive ownership of all disability insurance policies
held in Executive's name. Benefits under such policies may be continued
at Executive's expense.
6. DEBT SETTLEMENT. Executive releases the Company from its obligation to
pay $23,968.90, the cost of the premiums for the policies described in
Paragraphs 4 and 5, which company was otherwise obliged to pay, in
return for the cancellation of an equal principal amount of executive's
debt to the Company. The balance of this debt, $26,031.08, will be
deducted from the severance payments due pursuant to Paragraph 2, in
installments of $591.62 each payroll period.
7. ENTIRE OBLIGATION. The amounts paid to Executive by the Company
pursuant to Paragraphs 2 and 3 above represent the entire obligation of
the Company to Executive under this Agreement and the Employment
Agreement, and any amendments or supplements thereto, and Executive has
no entitlement under this Agreement and the Employment Agreement, or
any amendments or supplements thereto, to additional compensation from
the Company.
8. VOLUNTARINESS OF AGREEMENT. Executive acknowledge and agrees that he is
entering into this Agreement voluntarily, and with a full understanding
of its terms, for the purpose of being allowed voluntarily to resign
his positions as director, officer, and employee of the Company and in
consideration for the other benefits provided to him under Paragraph 2
above. Executive further acknowledges that such benefits are adequate
and sufficient consideration for the promises and representations made
by him in this Agreement.
9. WAIVER OF RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT.
Executive represents and agrees that this Agreement includes a waiver
of any and all rights executive has or may have under the Age
Discrimination in Employment Act. Executive is hereby advised (a) to
consult with an attorney prior to signing this Agreement and (b) that
he has 21 days
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in which to consider and accept this Agreement by signing and returning
this Agreement to the Company c/o Xxxxxxxx X. Xxxxx. In addition,
Executive has a period of seven (7) days following his execution of
this Agreement in which he may revoke this Agreement. If Executive does
not advise the Company (by a writing received by Xxxxxxxx X. Xxxxx
within such seven (7) day period) of his intent to revoke the
Agreement, the Agreement will become effective and enforceable. If
Executive revokes the Agreement, then no amounts will be paid to him
under Paragraph 2 above, or otherwise.
10. MUTUAL RELEASE. The Parties acknowledge and agree that, as a condition
of this settlement, each of the Parties expressly releases all rights
and claims that such parties know about as well as those such parties
may not know about. Each of the Parties expressly waives all rights
under Section 1542 of the Civil Code of the State of California, 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."
Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of each and all
of the Releasees, each of the Parties expressly acknowledges that this
Agreement is intended to include and does include in its effect,
without limitation, all Claims which such parties do not know or
suspect to exist in such party's favor at the time of execution of this
Agreement and that this settlement expressly contemplates the
extinguishment of all such Claims.
In connection with the above waiver, each Party represents and warrants
that such Party has not assigned or transferred, and will not assign or
transfer, any Claim or any interest in any Claim which such Party may
have against the other Party to this Agreement or any of its
representatives.
Nothing in this Agreement shall waive Executive's rights, if any, to
indemnification from the Company under the California Corporations
and/or Labor Codes in the event that any legal proceedings are brought
against Executive arising out of his employment with or service as a
director of the Company.
11. ARBITRATION. The Parties hereto agree that any dispute between the
Parties regarding the formation, interpretation, effect, enforceability
or alleged breach of this Agreement, or regarding any other dispute
arising out Executive's employment with the Company, shall be submitted
to final and binding arbitration in lieu of litigation. Notwithstanding
the foregoing, the Parties specifically agree that either of them may
seek injunctive relief in order to enforce the confidentiality,
nonsolicitation, and other obligations set forth in the Employment
Agreement, provided, however, that the underlying claims or disputes
shall be resolved through arbitration. Either Party may initiate
arbitration proceedings by written notice to the other Party. Any such
arbitration proceedings shall be subject to the employment disputes
arbitration rules of the American Arbitration and shall be held in
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Orange County before a single arbitrator selected by the Parties from
the American Arbitration Association employment disputes panel, unless
the Parties agree otherwise in writing. The arbitrator shall apply the
substantive laws of the State of California (excluding choice-of-law
principles that might call for the application of some other state's
law). The arbitrator will not have the power to add to or ignore any of
the terms and conditions of this Agreement or the Employment Agreement,
and his or her decision shall not go beyond what is necessary for the
interpretation and application of this Agreement and obligations of the
Parties under this Agreement. If any claim or dispute is submitted to
arbitration in accordance with this Section, the Parties agree that the
arbitrator's decision shall be final and legally binding on both
Parties. The prevailing party, as determined by the arbitrator, shall
be entitled to its reasonable attorneys' fees and costs. The
arbitration provisions of this Section shall be governed by the
provisions of the Federal Arbitration Act.
12. CHOICE OF LAW. This Agreement will be interpreted in accordance with
the laws of the State of California.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the Parties with respect to the termination of Executive's employment
with the Company, and supersedes any earlier written, oral or implied
understandings or agreements between the Parties. Except as modified by
this Agreement, the Employment Agreement remains in effect.
14. AMENDMENT. This Agreement shall not be released, discharged or modified
in any manner whatsoever, except by an instrument signed by the parties
hereto.
15. SEVERABILITY. The provisions of this Agreement are severable, and if
any provision is ever found to be unenforceable, all other provisions
shall remain fully valid and enforceable.
16. NOTICE. All notices or other communications required or permitted
hereunder shall be given in writing and shall be delivered or sent as
follows by registered or certified mail, postage prepaid or by
facsimile with confirmation of successful transmission:
If to Executive: Xxxxxxx X. Xxxxxx, Ph.D.
00000 Xxxxxx
Xxxxxxx Xxxxx, XX 00000
with a copy to: Xxxxxx Xxxxxx, Esq.
Pillsbury Madison & Sutro LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000-0000
If to Company: Hycor Biomedical Inc.
Attention: Xxxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
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With a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Attention: Xxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000-0000
Any party may change its address for purposes of notice by giving
notice in accordance with the provisions of this Section 16. Any such
notice will be deemed to be given when received, if personally
delivered or sent by telecopy, and, if mailed, five days after deposit
in the United States mail, properly addressed, with proper postage
affixed or by facsimile with confirmation of successful transmission.
17. COUNTERPARTS; WAIVER. This Agreement may be executed in counterparts,
all of which taken together will constitute one instrument. The failure
of any party to insist upon strict performance of any of the terms or
conditions of this Agreement will not constitute a waiver of any of its
rights hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
"Company"
HYCOR BIOMEDICAL INC.,
a Delaware corporation
By: /s/ Xxx Xxxxx 10/20/98
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Its: Senior Vice President
"Executive"
/s/ Xxxxxxx X Xxxxxx 10/19/98
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Xxxxxxx X. Xxxxxx, Ph.D
