SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT dated as of October 1, 1998 is between
ISOLYSER COMPANY, INC., a Georgia corporation (the "Company"), and TERENCE N.
FURNESS, a Georgia resident ("Employee").
RECITALS:
R-1. The Company and Employee entered into that certain Employment
Agreement (the "Employment Agreement") bearing an effective date of January 1,
1998, in accordance with which the Company employed Employee.
R-2 Employee desires to resign and Company desires to accept the
resignation of Employee upon and subject to the terms and conditions of this
Severance Agreement.
NOW, THEREFORE, for good and valuable consideration and intending to be
legally bound, the parties agree as follows:
1. Resignation. Employee hereby resigns as an employee of the Company
effective on the date hereof and the Company hereby accepts such resignation.
Such resignation is by mutual agreement and not for "Cause" or "Good Reason" as
defined in the Employment Agreement.
2. Severance. Provided Employee is not in breach of Section 9 of the
Employment Agreement, the Company shall pay to Employee the following as
severance:
(a) The sum of $300,000 payable over one year in accordance with
the customary practice of the Company for payment of its
employees but in any event in installments not less frequently
than monthly.
(b) The Company shall pay the cost of medical and dental COBRA
coverages (except for any regular contributions of the
Employee required of the Employee in the same manner as
required by all other managerial employees of the Company) for
the continued benefit of the Employee and his dependents for a
period terminating on the earlier of (x) 12 months after the
date of this Agreement or (y) the commencement date of
equivalent benefits from a new employer, provided that
Employee's continued participation is possible under the
general terms and provisions of such plan.
Except as set forth in this Severance Agreement, Employee acknowledges that he
shall be entitled to no further benefits or compensation from the Company.
Without limiting the foregoing, Employee acknowledges that no further bonuses
shall accrue or become payable from and after the date of this Severance
Agreement. Employee shall not be entitled to any consulting fees set forth in
Section 12 of the Employment Agreement until following the latter to occur of
the date that the Employee is no longer a director of the Company or October 1,
1999.
3. Stock Options. That certain (a) Incentive Stock Option Agreement
granted by the Company to Employee on January 1, 1998 for the purchase of up to
42,666 shares (all of which shares are vested) and (b) Option for Purchase of
Stock of Isolyser Company, Inc. (the "NQSO") granted by the Company to Employee
on January 1, 1998 for the purchase of up to 157,334 shares (of which 7,334
shares are vested) shall remain in full force and effect subject to and in
accordance with their respective terms allowing for exercising of vested
portions only prior to their respective expirations on January 1, 1999. Employee
acknowledges that the shares covered by the NQSO have not been registered as
provided in Section 17 of the NQSO and such section is modified to provide that
such a registration statement shall be filed as soon as reasonably practicable
following the date of this Agreement. Employee acknowledges that certain Option
for Purchase of Stock of Isolyser Company, Inc. granted by the Company to
Employee on January 1, 1998 for the purchase of up to 400,000 shares of the
Company's stock is terminated and shall not be exercisable due to the Employee's
resignation.
4. Ratification. Except as affected hereby, the terms and provisions of
the Employment Agreement are hereby ratified and confirmed by the Company and
Employee, including, without limitation, the protective covenants set forth in
Section 9 of the Employment Agreement, which shall remain in full force and
effect.
5. Miscellaneous. This Severance Agreement may be executed in multiple
counterparts, each of which shall be deemed an original. All payments made and
benefits provided to Employee under this Severance Agreement shall be net of any
tax required to be withheld by the Company under applicable law. This Severance
Agreement shall be governed in accordance with the laws of the State of Georgia.
This Severance Agreement and all of the terms, provisions and conditions hereof
shall be binding upon and/or inure to the benefit of and be enforceable by the
successors, heirs and personal representatives of Employee and the Company;
provided, that the severance payments shall no longer be payable after
Employee's death. Nothing contained herein shall restrict, alter or amend that
certain Indemnity Agreement effective as of January 1, 1998, between the Company
and Employee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
ISOLYSER COMPANY, INC.
By:___________________________________
Its:__________________________________
/s/ Terence N. Furness
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Terence N. Furness
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