EXHIBIT 10.1
PRIVATE AND CONFIDENTIAL
SEVERANCE AND RELEASE AGREEMENT
THIS SEVERANCE AND RELEASE AGREEMENT (this "Agreement") is made and
entered into as of October 17, 2005 (the "Effective Date"), by and between and
▇▇▇▇▇▇ Medical Technology, Inc., a Delaware corporation (the "Company"), and R.
▇▇▇▇ ▇▇▇▇▇▇▇ (the "Employee").
DEFINITIONS:
A. As used herein, the term "Employee" shall mean R. ▇▇▇▇ ▇▇▇▇▇▇▇ and his
heirs, personal representatives, and assigns.
B. As used herein, the term "Company" shall mean ▇▇▇▇▇▇ Medical
Technology, Inc., its parent, subsidiaries, affiliates and divisions (including,
but not limited to, ▇▇▇▇▇▇ Medical Group, Inc.), its and their respective
successors and assigns, and all of the past and present officers, directors,
employees and agents of such entities, in their individual and representative
capacities.
WHEREAS, the Employee and the Company desire to settle and resolve all
matters pertaining to Employee's employment with ▇▇▇▇▇▇ Medical Technology, Inc.
and the termination of that employment;
NOW THEREFORE in consideration of the promises, agreements, releases and
obligations as hereinafter set forth, it is agreed by the Employee and the
Company as follows:
1. The Employee unconditionally releases the Company from any and all
causes of action and liability related to the Employee's hire, employment, and
termination of employment at the Company occurring prior to and up to the
effective date of this Agreement, including, but not limited to, any and all
breach of contract claims, common law tort claims, claims of discrimination,
claims for compensation and benefits (including claims under the Employee
Retirement Income Security Act of 1974, as amended), as well as any and all
claims which the Employee may have under or in connection with any and all
local, state or federal ordinances, statutes, or common law. The only exclusion
from this release is a claim that some term of this Agreement has been violated.
The Company represents to the Employee that as of the date of this Agreement, it
does not have or know of any claims or causes of actions which it may have
against the Employee. The Employee shall be entitled to indemnification by the
Company for acts arising in the course of the Employee's employment in
accordance with and subject to the indemnification provisions contained in the
Certificate of Incorporation and/or Bylaws of the Company as in effect from time
to time.
Severance and Release Agreement PRIVATE AND CONFIDENTIAL
October 17, 2005
Page 2
2. The Employee's employment with the Company will be terminated at the
close of business on the Effective Date.
3. The Employee certifies that (a) this Agreement is fully understood by
the Employee and is entirely satisfactory to the Employee, (b) the Employee's
signing of this Agreement is the Employee's own free and informed act and deed,
and (c) the Employee has been given the opportunity to discuss it with counsel
of the Employee's choosing.
4. The Employee acknowledges that he is currently able to work in his
current position without limitations, either physical or mental, and without any
accommodation for any physical or mental ailment.
5. To the extent permitted by law, the Employee and the Company agree that
each will maintain the strictest secrecy and will not disclose the terms of this
Agreement to any person or entity, except (a) where such disclosure is required
by law or compelled pursuant to legal process, (b) for reporting purposes to
federal, state, or local governmental authorities, or (c) in discussions with
legal and financial advisors and the Employee's immediate family members. The
Employee further agrees not to disclose to any person any matters relating to
the confidential business affairs of the Company or the confidential business
affairs or the personal affairs of any officer, director or employee of the
Company, or to take any action or make any written or oral statement at any time
which could tend, in the sole discretion of the Company, to disparage, demean or
embarrass the Company, or its subsidiaries, divisions, officers, directors or
employees.
6. With respect to the Employment Agreement dated as of April 1, 2005
between the Company and the Employee (collectively, the "Employment Agreement"),
the Employee agrees (a) that the Employee is not entitled to any compensation or
benefits under the Employment Agreement other than as provided in paragraphs
4,5, and 6 thereof through the Effective Date; (b) to comply with the covenants
and to perform his obligations in full under the provisions of paragraphs 9,10
and 11 of the Employment Agreement; and (c) that in the event of any breach or
threatened breach by the Employee of any provision of paragraphs 9,10 and 11 of
the Employment Agreement, the Company shall be entitled to any and all rights
and remedies available to the Company under paragraphs 11(c) and 12 of the
Employment Agreement or otherwise.
Severance and Release Agreement PRIVATE AND CONFIDENTIAL
October 17, 2005
Page 3
7. The Employee hereby delivers to the Company an executed original of the
ADEA Release and Agreement attached hereto as Exhibit A, which releases the
Company from any and all liabilities under the Age Discrimination in Employment
Act of 1967, as amended.
8. Upon request by the Company, the Employee agrees to cooperate with the
Company during and after the Severance Period (as defined herein), without
further compensation by the Company, by meeting with and providing information
to the Company's representatives and others relating to the Employee's duties
performed heretofore or any governmental or other investigation or litigation
involving or affecting the Company. The person through whom this information
shall be requested by the Company will be the Employee's direct report as the
date of this Agreement or such person's designee.
9. This Agreement and any dispute arising in connection with its operation
or execution shall be construed in accordance with and governed by the statutes
and common law of the State of Tennessee and shall be resolved by binding
arbitration in Memphis, Tennessee. Each party to this Agreement will select one
arbiter. The two arbiters so selected shall then select a third arbiter.
Decisions of the arbitration panel shall be binding upon the parties hereto. The
prevailing party shall be entitled to have all expenses, including, but not
limited to, attorney fees and any fees submitted by the arbitrators to be paid
by the non-prevailing party.
10. This Agreement, together with paragraphs 9,10,11 and 12 of the
Employment Agreement, reflect the entire agreement of the parties relating to
the subject matter hereof and supersede all prior or contemporaneous oral or
written understandings, statements, representations, promises, arrangements or
agreements between the parties. The Confidentiality and Inventions Agreement
between the parties remains in full force and effect.
11. The parties agree that each provision of this Agreement is severable
and further agree that if any term or provision is held to be invalid, void, or
unenforceable by a court of competent jurisdiction or an administrative agency
for any reason whatsoever, such ruling shall not affect the validity of the
remainder of this Agreement.
12. In consideration and exchange for this Agreement and the ADEA Release
and Agreement, the Company shall provide to the Employee the following:
Severance and Release Agreement PRIVATE AND CONFIDENTIAL
October 17, 2005
Page 4
(a) an amount in cash equal to the Base Salary (as defined in the
Employment Agreement) of the Employee with respect to a period of thirteen (13)
months after the Effective Date (the "Severance Period"), which amount (after
deduction of applicable payroll taxes) shall be paid to the Employee in
accordance with the Company's customary payroll practices in effect from time to
time and with a final payment of the remaining balance on March 10, 2006;
(b) an amount in cash equal to the Base Salary equivalent of the
Employee's earned and unused vacation for 2005, if any, which amount (after
deduction of applicable payroll taxes) shall be paid to the Employee within
thirty (30) days after the Effective Date;
(c) an amount in cash equal to the total premiums payable by the
Employee for continued group medical, dental and vision plan coverage under
COBRA at the current COBRA rate during the twelve (12) month period immediately
following the Effective Date, which amount (after deduction of applicable
payroll taxes) shall be paid to the Employee within thirty (30) days after the
Effective Date; and
(d) the attorney's fee for review of this Agreement and the ADEA
Release and Agreement of up to $200, which amount shall be paid to the Employee
within thirty (30) days after the Effective Date.
Any stock options that the Employee has are governed by the specific
stock option agreement and the applicable stock option plan, and this Agreement
does not supersede those stock option agreements and plans. The Employee is
urged to review such stock option agreements and plans for the specific terms
that apply to his stock options.
Severance and Release Agreement PRIVATE AND CONFIDENTIAL
October 17, 2005
Page 5
THE EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS SEVERANCE AND RELEASE
AGREEMENT, HE UNDERSTANDS ALL OF ITS TERMS, AND HE EXECUTES IT VOLUNTARILY AND
WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES THEREOF.
AGREED AND ACCEPTED as of the Effective Date.
EMPLOYEE:
▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC.
/s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ F. ▇▇▇▇▇ ▇▇▇▇
------------------------------- ----------------------------
R. ▇▇▇▇ ▇▇▇▇▇▇▇ Title: President and CEO
PRIVATE AND CONFIDENTIAL
EXHIBIT A
ADEA RELEASE AND AGREEMENT
As a material inducement to ▇▇▇▇▇▇ Medical Technology, Inc. (hereinafter
referred to as "▇▇▇▇▇▇" or "Employer") to enter into this ADEA Release and
Agreement (the "Release or "Agreement") with R. ▇▇▇▇ ▇▇▇▇▇▇▇ (hereinafter
referred to as "Employee") (for Employee, Employee's heirs, executors,
administrators and assigns), Employee hereby unconditionally releases and
forever discharges ▇▇▇▇▇▇ and each of the ▇▇▇▇▇▇'▇ stockholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives,
attorneys, divisions, subsidiaries, affiliates and all persons acting by,
through, under, or in concert with any of them from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorney's fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected,
including, but not limited to, rights, under the Age Discrimination in
Employment Act of 1967, as amended from time to time, and other federal, state,
or local laws prohibiting discrimination, any claims the employee may have with
regard to Employee's hiring, employment, or electing the re-employment program
and termination of employment claims growing out of any legal restrictions on
▇▇▇▇▇▇'▇ right to terminate its employees ("Claim" or Claims"), which the
Employee now has, owns or holds, or claims to have owned or held, or which the
Employee at any time hereinafter may have owned or held or claimed to have owned
or held against ▇▇▇▇▇▇.
To comply with the Older Workers Benefit Protection Act of 1990, as
amended from time to time, the Release and Agreement has advised Employee of the
legal requirements of this Act and fully incorporates the legal requirements by
reference into this Agreement as follows:
a. This Agreement is written in ▇▇▇▇▇▇'▇ terms, and the Employee
understands and comprehends its terms;
b. Employee has been advised of Employee's rights to consult an
attorney to review the Agreement;
c. Employee does not waive any rights or claims that may arise after
the date the Release is executed;
d. Employee is receiving consideration beyond anything of value to
which he already is entitled;
e. Employee has been given a reasonable period of time to consider this
Agreement.
As consideration for this Release, ▇▇▇▇▇▇ agrees to provide the items
listed previously in paragraph 12 of the Severance and Release Agreement dated
as of October 17, 2005. The Employee enters into this Release with full
knowledge of its contents and enters into this Agreement voluntarily.
ADEA Release and Agreement PRIVATE AND CONFIDENTIAL
October 17, 2005
Page 2
AGREED AND ACCEPTED
EMPLOYEE: ▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC.
I acknowledge that I fully understand and agree that this Agreement may be
pleaded by ▇▇▇▇▇▇ Medical Technology, Inc. as a complete defense to any claim
which hereafter may be asserted by me or a claim against ▇▇▇▇▇▇ Medical
Technology, Inc. for or on account of any matter or thing whatsoever arising out
of the employment relationship or my termination from active employment.
/s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇
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R. ▇▇▇▇ ▇▇▇▇▇▇▇
SWORN TO AND SUBSCRIBED, before me, a Notary Public, in my presence this 17th
day of October, 2005.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Notary Public
County of Shelby
State of Tennessee
My Commission Expires: 1/15/08
By: /s/ F. ▇▇▇▇▇ ▇▇▇▇
----------------------------
Title: President and CEO
SWORN TO AND SUBSCRIBED, before me, a Notary Public, in my presence this 17th
day of October, 2005
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Notary Public
Shelby County
Tennessee
My Commission Expires: 1/15/08
NOTE: THE EMPLOYEE IS HEREBY ADVISED OF HIS RIGHT TO RESCIND AND NULLIFY THIS
AGREEMENT, WHICH RIGHT MUST BE EXERCISED, IF AT ALL, WITHIN SEVEN (7) DAYS OF
THE DATE OF THE EMPLOYEE'S SIGNATURE. THE EMPLOYEE MUST REVOKE THE RELEASE BY
LETTER TO ▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC., ATTENTION: GENERAL COUNSEL, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, WITHIN SEVEN (7) DAYS. NO CONSIDERATION SHALL
BE CONVEYED UNTIL SUCH TIME PERIOD HAS EXPIRED.
