Exhibit 10.22
CONSULTING AND SEVERANCE AGREEMENT
This Consulting and Severance Agreement is entered into this ___ day of
November, 1998 by and between Xxxxxxx Xxxx Xxxxxx ("Xx. Xxxxxx") and Medical
Science Systems, Inc. ("MSS").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xx. Xxxxxx is presently employed as the Executive Vice
President of MSS pursuant to the Employment Agreement dated January 1, 1996, as
amended, between MSS and Xx. Xxxxxx (the "Employment Agreement").
WHEREAS, the Company and Xx. Xxxxxx wish to discontinue their
employment relationship and, in lieu thereof, enter into this Consulting and
Severance Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the premises, the agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Xx. Xxxxxx agree
as follows:
1. This Agreement embodies the full and final settlement of all rights
and obligations of the Company and Xx. Xxxxxx under the Employment Agreement and
the Employment Agreement shall be terminated in all respects except for the
terms thereof that specifically survive as set forth in this Agreement. Each
party hereto acknowledges that the Employment Agreement is being terminated
without cause by mutual agreement of the parties hereto pursuant to Section
12.1.1 of the Employment Agreement. MSS and Xx. Xxxxxx acknowledge and agree
that Xx. Xxxxxx is not owed any amounts under the Employment Agreement resulting
from this mutual agreement to terminate, and that no compensation or payment of
monies how so ever characterized is due to Xx. Xxxxxx upon or subsequent to such
termination of the Employment Agreement or termination of his employment.
2. Xx. Xxxxxx acknowledges that, effective as of October 27, 1998, in
lieu of being employed by the Company and holding the position of Executive Vice
President of MSS, Xx. Xxxxxx will provide consulting services to MSS on an "as
available" and "as needed" basis and without additional compensation through
November 30, 1999, except as provided in paragraphs 3 and 4 below. MSS hereby
acknowledges and agrees that Xx. Xxxxxx shall be entitled to retain the
computer, facsimile machine, photocopier, desktop computer and printer that Xx.
Xxxxxx currently has in his possession. Xx. Xxxxxx also agrees that he will
return his corporate American Express card on December 1, 1998, and MSS will
continue to pay for the telephone line to his home office until February 1,
1999.
3. In consideration for the release contained herein and for such
consulting services and accrued but untaken vacation pay, MSS agrees to pay Xx.
Xxxxxx, by MSS check on the eighth day following Xx. Xxxxxx'x execution of this
Agreement and provided Xx. Xxxxxx has not revoked this Agreement in the
-1-
seven-day period following his execution of this Agreement, a lump sum payment
equal to $200,900 (less standard legal deductions). Xx. Xxxxxx releases the
Company from all liabilities under, and all obligations to perform or observe
any term or provision of, the Employment Agreement.
4. MSS shall pay Xx. Xxxxxx his full salary through October 31, 1998
and no other compensation or benefits shall be paid to Xx. Xxxxxx under the
Employment Agreement or otherwise. Effective November 30, 1998, Xx. Xxxxxx shall
not be entitled to any benefits (including medical and other insurance) from MSS
and shall not be a participant in MSS's 401(k) Plan or the MSS Profit Sharing
Plan; provided, however, nothing herein shall effect Xx. Xxxxxx'x eligibility to
elect the continuation of health care coverage pursuant to Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), or
Xx. Xxxxxx'x vested rights under the MSS Profit Sharing Plan.
5. Each of Xx. Xxxxxx and the Company releases, remises, acquits and
discharges the other party and their predecessors and affiliates, and their
divisions, officers, directors, agents, employees, consultants, independent
contractors, attorneys, advisers, successors and assigns, jointly and severally,
from any and all claims, known or unknown, which releasing party, their heirs,
successors or assigns have or may have against any of such parties and any and
all liability that any of such parties may have to the released party whether
denominated claims, demands, causes of action, obligations, damages or
liabilities arising from any and all bases, however denominated, including but
not limited to claims of discrimination under the Age Discrimination in
Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, the Americans with Disabilities Act, the
Employee Retirement Income Security Act of 1974, 42 U.S.C. ss. 1981, the Texas
Commission on Human Rights Act, or any other U.S. federal, state or local law or
any other law, rule or regulation or workers' compensation or disability claims
under any such laws. This release relates to claims arising from and during Xx.
Xxxxxx'x relationship with MSS and its predecessors and affiliates or as a
result of the termination of such relationship. This release is for any relief,
no matter how denominated, including but not limited to wages, back pay, front
pay, compensatory damages or punitive damages. Each party further agrees that
they will not file or permit to be filed on their behalf any such claim. This
release shall not apply to (i) the obligations set forth in this Agreement or
those under the Confidentiality Agreement (as defined hereafter), or (ii) any
other claims based on acts or omissions of any released party first occurring
after the date on which he signs this Agreement.
6. This Agreement does not affect Xx. Xxxxxx'x obligations or MSS's
rights under the Confidentiality and Invention Assignment Agreement
("Confidentiality Agreement") dated as of January 1, 1996, by and between MSS
and Xx. Xxxxxx; or any other confidentiality, secrecy or proprietary information
or intellectual property agreement; or any laws governing such matters. In
addition, this Agreement shall not affect Xx. Xxxxxx'x status as a current
member of the Board of Directors of MSS.
7. Xx. Xxxxxx acknowledges he received a copy of this Agreement on
October 28, 1998. Xx. Xxxxxx shall have until and including November 19, 1998,
to accept and consider this Agreement, a period Xx. Xxxxxx acknowledges to be
twenty-one (21) days following receipt of this Agreement.
-2-
This Agreement shall not become effective and enforceable until seven (7) days
following its execution. Xx. Xxxxxx may revoke this Agreement in a writing
delivered to and received by U. Xxxxxxx Xxxxx, CFO, Medical Science Systems,
Inc., 000 X.X. Xxxx 000, #000, Xxx Xxxxxxx, Xxxxx 00000, within said seven (7)
days.
8. This Agreement is personal to Xx. Xxxxxx and, without the prior
written consent of the Board of Directors of MSS, shall not be assignable by Xx.
Xxxxxx otherwise than by will or the laws of descent and distribution. The terms
of this Agreement shall be binding and inure to the benefit of the parties
hereto and their affiliates and their respective successors and assigns. The
terms of this Agreement may be changed, modified or discharged only by an
instrument in writing signed by the parties hereto. This Agreement shall be
construed, enforced and interpreted in accordance with applicable federal law
and the laws of the State of Texas without reference to its principles of
conflicts of law, and venue for any action arising in connection herewith shall
be proper in Bexar County, Texas. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be original.
9. The parties each agree that Xx. Xxxxxx is engaged as an independent
contractor of MSS. Xx. Xxxxxx shall take no unilateral action or incur any
expense, and has no express or implied authority to do either, on behalf of MSS,
as an independent contractor, a consultant or otherwise, unless he has received
written instructions from MSS' President to so proceed. Xx. Xxxxxx further
represents that he maintains a separate place of business, serves customers
other than MSS, has all necessary permits and licenses to conduct the services
under this Agreement, withholds and pays all state and federal income, social
security, disability and insurance taxes and maintains adequate insurance. The
parties further agree that nothing contained in this Agreement shall be
construed to place them in the relationship of partners, principal and agent,
employer/employee or joint venturers.
10. The failure of either party at any time to enforce any of the
provisions of this Agreement or to require performance by the other party of any
provision hereof shall not be construed to be a waiver of such provisions or to
affect the validity of this Agreement, or of any part hereof, or of the right of
either party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
11. Written notices required or furnished under this Agreement shall be
sent to the following addresses:
to MSS: U. Xxxxxxx Xxxxx
Medical Science Systems, Inc.
000 X.X. Xxxx 000, #000
Xxx Xxxxxxx, Xxxxx 00000
-3-
to Xx. Xxxxxx: Xxxxxxx Xxxx Xxxxxx
00000 Xxxxx xx Xxxxx
Xxxxxxx Xxxxxxxxx, XX 00000
Notices shall be effective on the first business day following receipt thereof.
Notices sent by mail shall be deemed received on the date of delivery shown on
the return receipt.
12. This Agreement represents and contains the entire agreement between
the parties hereto with respect to the subject matter hereof, and the terms of
this Agreement are contractual and not a mere recital. Further, this Agreement
supersedes any and all prior oral and written agreements and understandings, and
no representation, warranty, condition, understanding, or agreement of any kind
with respect to the subject matter hereof shall be relied upon by the
undersigned unless incorporated herein.
13. Except for the provisions of Paragraph 6 regarding the
Confidentiality Agreement, with respect to which the Company expressly reserves
the right to petition a court directly for injunctive and other relief, any
claim, dispute or controversy of any nature whatsoever, including but not
limited to tort claims or contract disputes, between the parties to this
Agreement or their respective heirs, executors, administrators, legal
representatives, successors and assigns, as applicable, arising out of or
relating to the terms or conditions of this Agreement or the Employment
Agreement hereby terminated, including the implementation, applicability and
interpretation thereof, shall be resolved exclusively as follows: Upon the
written request of one party served upon the other, any such claim, dispute or
controversy shall be submitted to and settled by arbitration in accordance with
the provisions of the Federal Arbitration Act, 9 U.S.C. xx.xx. 1-14, as amended.
If arbitration is requested, each of the parties to this Agreement shall appoint
one person as an arbitrator to hear and determine any such disputes. The two
arbitrators shall then choose a third arbitrator from a panel made up of
experienced arbitrators selected pursuant to the procedures of the American
Arbitration Association (the "AAA"). The majority decision of the three
arbitrators shall be final, binding and conclusive upon the parties to this
Agreement. Each party shall be responsible for the fees and expenses of its
arbitrator and the fees and expenses of the third arbitrator shall be shared
equally by the parties; provided, however, to the extent possible, the
arbitrators shall, as part of their decision, provide that the non-prevailing
party shall pay all costs incurred by the prevailing party (including fees and
costs of the arbitrators and the prevailing party's legal counsel). The terms of
the commercial arbitration rules of AAA shall apply except to the extent they
conflict with the provisions of this paragraph. Arbitration shall take place in
Los Angeles, California. It is further agreed that any of the parties hereto may
petition the United States District Court for the Central District of California
for a judgment to be entered upon any award entered through such arbitration
proceedings.
14. (a) The parties hereto acknowledge that their legal counsel has
advised them, and that they are familiar with, the provision of Section 1542 of
the California Civil Code, which provides as follows:
-4-
"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."
(b) Being aware of said Civil Code Section 1542, the parties
hereto expressly waive and relinquish any rights or benefits they may have
thereunder, as well as under any other state or federal statutes or common law
principles of similar effect.
IN WITNESS WHEREOF, MSS has caused this Agreement to be executed by its
duly authorized officer, and Xx. Xxxxxx has executed this Agreement, in each
case as of the date first above written.
MEDICAL SCIENCE SYSTEMS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Xx. Xxxxxx acknowledges that he has read the foregoing Agreement and knows its
contents and fully understands it. Xx. Xxxxxx acknowledges that he has been
advised to consult with an attorney prior to executing this Agreement, has had
such opportunity, and he is executing the Agreement voluntarily, fully
understanding the significance and consequences of this Agreement.
XX. XXXXXX
---------------------------------------
Xxxxxxx Xxxx Xxxxxx
-5-
