Exhibit 10.47
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made effective as of
_________, 2000 between MEDTOX Scientific, Inc., a Delaware corporation (the
"Company") and ______________ (the "Employee").
RECITALS
WHEREAS, the Company desires to foster the continuous employment of
certain key management personnel and to induce Employee to remain in the employ
of the Company, and in consideration of the agreement of Employee in Section 3
below, the Company and Employee agree as follows:
1. Definitions. The following defined terms have the respective
meanings described below:
1.1 Cause. Termination by the Company of the Employee's
employment for "Cause" shall mean termination upon:
(a) the willful and continued failure by the
Employee to substantially perform Employee's
duties with the Company (other than any such
failure resulting from Employee's incapacity
due to physical or mental illness) after a
written demand for substantial performance
is delivered to the Employee by the
Company's Chief Executive Officer, which
demand specifically identifies the manner in
which the Company believes that Employee has
not substantially performed Employee's
duties; or
(b) the willful engaging by the Employee in
conduct which is demonstrably and
materially injurious to the Company,
monetarily or otherwise.
For purposes of this Section 1.1 no act, or failure to act, on the
Employee's part shall be deemed "willful" unless done, or omitted to be
done, by the Employee not in good faith and without reasonable belief
that the Employee's action or omission was in the best interest of the
Company.
1.2 Company. The term "Company" means MEDTOX Scientific,
Inc. and any successors and assigns of the Company.
2. Term of Agreement. This Agreement shall commence on the above
effective date and continue in effect through January 2, 2001 (the "Term").
Commencing on January 3, 2000 and each January 3 thereafter, the Term of this
Agreement shall automatically be extended for one additional year unless, not
later than July 1 of the preceding year, the Company gives Employee written
notice that it does not desire to extend this Agreement. The Term of this
Agreement shall be subject to earlier termination as described in Section 4
below.
3. Notice and Date of Termination. If the Company elects to terminate
the employment of Employee, the Company will provide Employee a "Notice of
Termination" which shall state Employee's final day of employment (the "Date of
Termination") and whether or not such termination is for Cause.
4. Severance Payment for Termination by Company Other Than For Cause.
If during the Term of this Agreement the Company terminates the employment of
Employee other than for Cause, Employee shall be entitled to the following
benefits subject to the provisions of Section 6 of this Agreement:
(a) the Company will pay to Employee the Employee's then
current base salary during the twelve (12) month
period following the Date of Termination subject to
applicable withholdings and in accordance with the
regular payroll practices of the Company.
(b) continuous coverage, at the Company's expense, under
any group health plan maintained by or on behalf of
the Company, in which Employee participated as of the
Date of Termination, during the twelve (12) month
period following the Date of Termination.
Employee's right to continued coverage under this section shall in no
way reduce or limit any continuation coverage under such group health plan to
which Employee or any of Employee's qualified beneficiaries are entitled under
the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") or Minnesota Statutes ss.ss. 61A.092 and 62A.17 et seq. This extension
of coverage, however, shall be coordinated with, and shall be provided
concurrently with, any benefits or continuation rights otherwise available to
Employee and Employee's eligible dependents under state or federal continuation
of coverage statutes, including but not limited to, Minnesota Statutes ss.ss.
61A.092 and 62A.17 et seq. and the federal Consolidated Omnibus Budget
Reconciliation Act ("COBRA"). Accordingly, within ten (10) days after the Date
of Termination, Employee and Employee's dependents who are eligible for such
statutory continuation rights shall complete all forms and papers necessary and
customary to elect such continuation coverage. The Parties expressly agree that
the extension of benefits provided for by this Agreement is not intended to
create a retiree health plan covering any other employees. In all other
respects, the payment of benefits, including the amounts and timing thereof, to
Employee and Employee's eligible dependents will be governed by the terms of
applicable employee benefit plans for which Employee and Employee's dependents
are eligible. Employer will answer any reasonable questions that Employee may
have from time to time and will offer him the same assistance given other
participants in employee benefit plans so long as Employee is entitled to
benefits as provided herein or under the terms of those plans.
Nothing in this Agreement, including the Severance Payments described
in this Section 4, shall in any way be construed to extend the period of
Employee's employment with the Company, and the Date of Termination shall not be
extended beyond the date as specified by the Company pursuant to Section 4 of
this Agreement.
5. Sole Remedy. The payments under Section 4 shall be the sole remedy of
Employee in connection with the termination of Employee's employment by the
Company under the circumstances described in Section 4 of this Agreement.
6. Conditions of Receiving Severance Payments. As a condition of receiving
the benefits described in Section of this Agreement, and in consideration of
receiving the Severance Payment described therein, Employee agrees as follows:
6.1 Release of Claims. Employee agrees to execute a general
release in favor of the Company in the form attached hereto as Exhibit
A within ten (10) days of the Date of Termination. Severance benefits
as described in Section 4 shall be provisionally made to Employee
during this ten (10) day period, and during the "Consideration Period
and Rescission of Release" period described in Exhibit A, Section 3,
provided that Employee shall immediately reimburse the Company for any
such payments upon Employee's failure to sign Exhibit A within the ten
(10) day period, or upon Employee's rescission of the general release
contained in Exhibit A as provided therein. If Employee fails to sign
the general release contained in Exhibit A within ten (10) days of the
Date of Termination, or subsequently rescinds the release as provided
in Exhibit A, Section 3, the Company shall have no obligation to
provide benefits to Employee as provided in Section 4 of this
Agreement.
6.2 Covenant Not to Compete. Employee agrees that during the
twelve (12) month period following the Date of Termination during which
Employee receives Severance Payments as described in Section 4,
Employee will not directly or indirectly own, manage, operate, control,
be employed by, participate in or be connected in any manner with the
ownership, management, operation or control of any business providing
or delivering products or services which compete with the business,
products or services of the Company or its affiliates, in the
geographic markets in which the Company operates.
The parties believe that this Covenant Not to Compete is
reasonable and fully enforceable. Nevertheless, if a court of competent
jurisdiction or arbitrator with authority to interpret and enforce this
Agreement finds any portion of this Covenant Not to Compete
unreasonable in geographic scope or duration, such court or arbitrator
shall have the power to modify this Covenant Not to Compete so as to
render it reasonable and enforceable, while still protecting the
Company's legitimate employer interests.
6.3 Covenant Not to Solicit. Employee agrees that during the
twelve (12) month period following the Date of Termination during which
Employee receives Severance Payments as described in Section 4,
Employee will not, either personally, or through an employer, firm,
agent, servant, employee, partner, shareholder, representative,
affiliate, or any other entity:
(a) Solicit any customer which is or was a
customer of the Company or its affiliates as
of the date of the Date of Termination or
the twelve (12) month period immediately
preceding the Date of Termination, for the
purposes of providing or delivering products
or services which compete with the business,
products or services of the Company or its
affiliates, without the prior written
consent of the Company's Chief Executive
Officer.
(b) Employ or offer to employ any individual
employed by the Company within the twelve
(12) month period immediately preceding the
Date of Termination, or request, advise or
entice any such individual to leave the
employment of the Company, without the prior
written consent of the Company.
6.4 Assignment of Intellectual Property. Employee agrees to
acknowledge that all documents and other tangible property relating in
any way to the business of the Company which were conceived or
generated by Employee or came into Employee's possession during the
period of Employee's employment by the Company are the exclusive
property of the Company. By accepting payments pursuant to Section 4 of
this Agreement, Employee thereby assigns, transfers, and sells to the
Company any rights Employee may have in all improvements, inventions,
designs, ideas, works of authorship, copyrightable works, discoveries,
trademarks, copyrights, trade secrets, formulae, processes, techniques,
know-how, and data, whether or not patentable, made or conceived or
reduced to practice or learned by Employee, either alone or jointly
with others, during the period of Employee's employment by the Company
(whether or not during normal working hours), or that resulted from
tasks assigned to Employee by the Company or resulted from use of
premises, equipment, or resources owned, leased, or contracted for by
the Company (collectively referred to as "Inventions"). Employee agrees
to provide all reasonable assistance to the Company in perfecting and
maintaining its rights to the Inventions, including the execution of
documents and things memorializing the assignment of ownership of such
Inventions to the Company as provided herein.
6.5 Nondisclosure. Employee agrees not to use or disclose any
information owned by, developed by, for, or about the Company, or in
any respect concerning or relating to the Company's business, or the
business of any of its clients or customers, that Employee has acquired
during Employee's employment by the Company ("Confidential
Information"). Such Confidential Information shall include, but not be
limited to, all computer programs, product designs, product
specifications, pricing, discounting, marketing, research, development,
business affairs, future plans, technical data, customer lists,
Inventions (as defined in Paragraph 6.4 of this Agreement), or any
other information which Employee has received as a result of Employee's
employment by the Company, whether or not acquired or developed by the
Company. Employee acknowledges the Company's right to prohibit
Employee's disclosure of Confidential Information and that the rights
created by this Agreement are in addition to all other rights which the
Company has to prevent the disclosure of trade secret information.
Employee agrees not to use such Confidential Information himself or
disclose such information to any other party, directly or indirectly
without the prior written consent of the Company. To the extent not
inconsistent with this Section 6.5, nothing herein shall in any way
prevent Employee from utilizing Employee's general business,
management, and financial skills, techniques, and abilities. By
accepting payments pursuant to Section 4 of this Agreement, Employee
thereby agrees to the terms provided in this Section 6.5.
6.6 Return of Records, Documents and Property. Employee will
return to the Company all its records, equipment, machinery, keys,
correspondence, documents, Inventions (as defined in Paragraph 6.4 of
this Agreement), and Confidential Information (as defined in Paragraph
6.5 of this Agreement) in Employee's possession within three (3) days
of the Date of Termination. By accepting payments pursuant to Section 4
of this Agreement, Employee thereby agrees to the terms provided in
this Section 6.6.
6.7 Remedy for Breach. Employee agrees that in the event
Employee breaches any of the covenants contained in Sections 6.1, 6.2,
6.3, 6.4, 6.5, and/or 6.6 of this Agreement, irreparable injury will
result to the Company, the Company's remedy at law will be inadequate,
and the Company will be entitled to an injunction to restrain the
continuing breach of this Agreement by Employee, or Employee's
partners, agents, servants, employees, or representatives, or any other
persons or entities acting for or with Employee, in addition to any
other rights or remedies which the Company may have at law or in
equity. In the event of any violation by Employee of this Section 6,
Employee agrees to pay the reasonable costs and attorneys' fees which
the Company incurs in pursuing any of its rights with respect to this
Section 6, in addition to the damages sustained by the Company.
7. Termination of Agreement. If (a) the Company terminates the
employment of Employee for Cause, (b) Employee voluntarily resigns from full
time employment with the Company, (c) Employee retires from full time employment
with the Company, (d) Employee dies or (e) Employee is no longer actively
employed by the Company due to disability (as such term is defined under the
Company's employee benefit programs); then (1) the Term of this Agreement shall
automatically terminate and (2) Employee shall have no right to any severance
payments or other benefits from the Company (except for applicable COBRA
requirements or applicable benefits under the Company's stock option plans) or
any other right or remedy under this Agreement.
8. Confidentiality. The existence of this Agreement, and each of the
terms and provisions of this Agreement, are confidential and shall not be
disclosed by Employee in any manner (other than to Employee's counsel who agrees
to comply with this provision of confidentiality) without the prior written
consent of the Company's Chief Executive Officer.
9. Arbitration. Except as provided in Section 6.7 of this Agreement,
any dispute or claim under this Agreement, not resolved by the parties, shall be
resolved by final and binding arbitration. Unless the parties agree otherwise,
the arbitration shall be conducted in accordance with the rules of the American
Arbitration Association. There shall be a single arbitrator, whose award shall
become final ten (10) days after it is delivered in writing to the parties for
their final comment. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. ss. 1 et seq. Judgment upon the arbitrator's award may
be entered by any court having jurisdiction thereof. The prevailing party shall
also be entitled to recovery of reasonable attorneys' fees. The arbitration
shall be conducted in Minneapolis, Minnesota and any awards shall be subject to
the limitations of liability expressed in this Agreement.
10. No Employment Contract. Nothing in this Agreement shall be construed to
require the Company to continue the employment of Employee.
11. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. Employee may not assign Employee's
rights under this Agreement.
12. Notice. Any notice given under this Agreement must be in writing and
delivered to the last known address of the party receiving said notice.
13. Governing Law. This Agreement and any disputes arising under or in
connection with it, shall be governed by the laws of the State of Minnesota.
14. Entire Agreement and Amendment. This Agreement contains the entire
agreement between the parties pertaining to the subject matter hereof. This
Agreement may only be amended in writing signed by Employee and by the Chief
Executive Officer acting on behalf of the Company. IN WITNESS WHEREOF, the
Company and Employee have executed this Agreement effective as of the day and
year first above written.
MEDTOX SCIENTIFIC, INC. Employee Name
By ------------------------------ -----------------------------------
Its: ------------------------------ (Employee's signature)
Date Date
------------------------------- ------------------------------
EXHIBIT A
GENERAL RELEASE
1. Definitions. I intend all words used in this Release to have their plain
meanings in ordinary English. Technical legal words are not needed to describe
what I mean. Specific terms I use in this Release have the following meanings:
a. "I" "me" and "my", as used herein, shall at all times mean Employee and
anyone who has or obtains any legal rights or claims through said named person.
b. "the Company", as used herein, shall at all times mean MEDTOX
Scientific, Inc., its parent corporations, subsidiaries, successors and assigns,
partners, any affiliated and predecessor companies, their affiliated and
predecessor or management companies, their successors and assigns, and the
present and former officers, directors, shareholders, partners, employees,
attorneys, and agents of any of them, whether in their individual or official
capacities, and the current and former trustees or administrators of any
pension, welfare, or other employee benefit plan of the Company, in their
official and individual capacities.
c. "My Claims" mean all of the claims I have now against the Company,
whether or not I know about those claims, including but not limited to, claims
for any action or inaction, loss, expense, or any damages of whatever nature
arising from any occurrence or occurrences from the beginning of time until the
date of this Release, including claims for: breach of contract; payment of
wages, commissions, reimbursements, sick pay, vacation pay, employee benefits,
insurance, pension, or other compensation; fraud or misrepresentation; violation
of any federal, state, and/or local law, regulation or rule, including but not
limited to, the Minnesota Human Rights Act, Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act, the Rehabilitation Act, the Age
Discrimination in Employment Act, the Employee Retirement Income Security Act,
the Consolidated Omnibus Budget Reconciliation Act, the Family and Medical Leave
Act, the Fair Labor Standards Act, the Worker Adjustment and Retraining
Notification Act, and all other federal, state, and/or local civil rights laws
prohibiting discrimination or other unlawful activity on the basis of race,
color, creed, marital status, sex, age, religion, national origin, disability,
pregnancy, sexual orientation, political affiliation, status with respect to
public assistance, membership in local commission, or any other protected class
status; sexual harassment; retaliation; defamation; intentional or negligent
infliction of emotional distress; breach of the covenant of good faith and fair
dealing; promissory estoppel; unjust enrichment; negligence; wrongful
termination of employment; constructive discharge; invasion of privacy;
fraudulent inducement; negligent hiring, retention, training, and/or
supervision; all other claims for unlawful employment practices; all claims for
attorney's fees, costs, disbursements, fees, or other payments; and all other
common law, legal, equitable or statutory claims (whether on a contract, tort,
or other theory), whether they could be brought directly by me on my own behalf
or by any other person, agency, or organization on my behalf.
2. Agreement to Release My Claims. On behalf of myself, my attorneys, heirs,
executors, administrators, successors and assigns, I agree to release,
discharge, and give up all My Claims against the Company in exchange for the
compensation, promises and undertakings as described in the Severance Agreement
between me and the Company. I agree to release and discharge the Company not
only from any and all of My Claims that I could make on my own behalf, but also
from those claims that may or could be brought by any other person or
organization on my behalf. I have not caused or permitted to be served, filed,
or commenced, and I will not cause or permit to be served, filed, or commenced,
any lawsuits, charges, complaints, actions, notices, or other demands against
the Company with any federal, state, or local judicial or administrative agency
or body based on My Claims. In the event any such claim has been or is asserted,
I agree that this Release shall act as a total and complete bar to my
re-employment or to recovery of any relief or sum or amount whatsoever from the
Company, whether labeled award, liability, damages, judgment, backpay, wages,
fine, or penalty, or otherwise resulting directly or indirectly from any
lawsuit, remedy, charge, or complaint, whether brought privately by me or by
anyone else, including any federal, state, or local judicial or administrative
agency or body, whether or not on my behalf or at my request. The payments I am
receiving represent full and fair compensation for the release of all My Claims.
The Company shall not be obligated and does not owe me anything in addition to
that described above. This release shall not affect any claims which could be
made under any employee welfare benefit plan or any pension or retirement plan
through the Company.
3. Non-Admission. Even though the Company is paying me to release My Claims, the
Company does not admit that it is responsible or legally obligated to me. In
fact, the Company denies that it is responsible or legally obligated to me or
that it has engaged in any wrongdoing.
4. Consideration Period and Rescission of Release. I understand that I may take
up to twenty-one (21) calendar days after receiving this General Release to
consider whether I wish to sign this General Release. In addition, I understand
that I may rescind (i.e., revoke and cancel) my release of claims arising under
the federal Age Discrimination in Employment Act, 29 U.S.C.ss. 621 et seq.,
within seven (7) calendar days of signing this General Release. I understand
that I also may rescind (i.e., revoke and cancel) my release of claims arising
under the Minnesota Human Rights Act within fifteen (15) calendar days of
signing this General Release. I understand that to be effective, the
rescission/revocation must be in writing and delivered to the Company, in care
of Richard Braun, Chief Executive Officer, either by hand or by mail within the
respective rescission/revocation periods. If sent by mail, the rescission must
be:
1. Postmarked within the respective rescission/revocation
periods as stated above;
2. Properly addressed, as stated above; and
3. Sent by certified mail, return receipt requested.
5. Knowing and Voluntary. I have read this General Release carefully and
understand and agree to all of its terms. I have been advised to discuss this
Release with my own attorney. In agreeing to sign this and Release, I have not
relied on any statements or explanations made by the Company or its attorneys.
-----------------------------------
Employee
SUBSCRIBED AND SWORN to before me
this ____ day of ________________, 2000
- ------------------------------------
Notary Public