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EXHIBIT 10.3
Date: January 7, 1998
To: Linda Paradiso, DVM
From: John Longenecker
Subject: Confidential Separation Agreement
Dear Linda:
Consistent with our discussions concerning your voluntary termination of
employment and separation from DepoTech (the "Company") this letter will
constitute the Confidential Separation Agreement (the "Agreement") setting forth
the terms of your employment and separation of employment from the Company. By
signing this Agreement, you will be agreeing to these terms. It is important
that you understand clearly both what your benefits are and what is expected of
you by the Company.
1. Transition Period: Commencing on January 7, 1998 and continuing until
January 30, 1998 (hereinafter referred to as the "transition period"), you
and the Company will be on notice of the discontinuance of your employment
with the Company. During this transition period, you shall remain a regular
full-time employee of the Company. The parties may mutually agree in
writing to extend this transition period, but neither is under any
obligation to do so (hereinafter referred to as the "extended transition
period"). Any written extension of the transition period will effectively
change the date on which employment with the company will terminate.
2. Duties: You will make yourself available to the Company for the purpose of
transitioning your work to other employees and to answer any questions
regarding matters assigned to you before the effective date of Separation,
as defined below.
3. Salary: During the transition period the Company agrees to pay you your
full monthly base salary of $14,583.33 less applicable deductions for taxes
and health and other benefits. All salary payments during this transition
period shall be made on or about the time of the Company's normal
bi-monthly pay cycle.
4. Benefits: During the transition period the Company will continue your
current health benefits, Long Term Disability, Life Insurance, and
participation in the Company's 401(k) and ESPP plans.
5. Expiration of Transition Period/Separation of Employment: Your employment
with the Company will terminate on January 30, 1998, unless sooner
terminated pursuant to paragraph 6, the "Termination", or extended pursuant
to paragraph 1, the "Transition Period". As part of your Separation, the
Company agrees to provide you with the following additional compensation
and benefits package:
a. Severance Payment: The Company agrees to provide a lump sum
severance payment equal to six (6) months base salary ($87,500),
less applicable taxes, on the date the transition period ends, as
defined in paragraph 5, above.
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b. Accelerated Stock Option Grant Vesting: The Company agrees to
accelerate the vesting of all remaining unvested Stock Option
Grants awarded in these quantities and on the following dates:
ISO GRANT 2,050 SHARES GRANTED 02-26-97
ISO GRANT 8,000 SHARES GRANTED 04-28-97
The exercise period for all vested shares will be 90 days
following the date the transition period ends.
c. Management Incentive Bonus: You will be eligible for 1997
Management Incentive Bonus consideration to be paid out in 1998,
based on the combination of your performance and that of the
Company during the 1997 fiscal year. The Management Incentive
Bonus target for 1997 is twenty percent (20%) of base salary,
however it can be as little as 0% or as high as 33% of base
salary depending on overall company and individual performance.
This bonus shall be no less than the average bonus granted to all
other Vice Presidents.
d. Outplacement: The Company further agrees to provide you with up
to one hundred eighty (180) days job search
preparation/assistance with the firm of Lee Hecht Harrison
following the date the transition period ends.
e. Extended Benefits: You and your eligible dependents will be
entitled to continue your medical coverage, pursuant to COBRA,
for an additional 18 months from the date the transition period
ends, at your own expense. It is understood that the Company
reserves the right to change health plans at any time. All other
employee benefits, including Long Term Disability, Life
Insurance, 401(k) and ESPP plan participation will expire on the
date the transition period ends.
f. FTO Balance: The Company further agrees to pay you all earned but
unused FTO pay as of the date the transition period ends.
6. Termination: Either party may terminate your employment during the
transition period or any extended transition period, under the following
terms and conditions:
a. You may terminate your employment with the Company during the
transition period, for any reason, upon five (5) days written
notice to the Company. Upon such a termination, your employment
will be terminated and all compensation and benefits pursuant to
paragraphs 3 and 4 will end. In addition, you will not be
entitled to any compensation or benefits described in paragraph 5
subsections (a-d).
b. The Company reserves the right to terminate your employment
during the transition period or any extended transition period
for cause. Cause for termination includes: (a) a material breach
of the terms of this Agreement; (b ) major infractions of the
Company's standards of conduct as set forth in Company policies;
or (c) your acceptance of employment with another entity or
person such that you can no longer devote your full energies to
employment with the Company. Upon termination for cause, all
compensation and benefits pursuant to paragraphs 3 and 4 will
end.
In addition, you will not be entitled to any compensation or
benefits described in paragraph 5 subsections (a -d).
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7. Confidentiality: You agree that as a specific condition to the performance
of this Agreement by the Company, you will not disclose for any purpose,
the existence of this Agreement, the terms of this Agreement or the
negotiations leading up to this Agreement to any person, except to your
immediate family or as may be necessary for purposes of securing legal or
tax advice or as otherwise may be required by law.
8. Inventions/Confidential Information: You agree that the Employee
Proprietary Information and Inventions Agreement signed by you shall remain
in full force and effect following the date of separation. In addition, we
wish to remind you of your obligations regarding the confidentiality of the
Company's commercial and technical proprietary information. You understand
and agree that all confidential and proprietary information that you may
have received during your employment or may receive during the transition
period with the Company shall remain strictly confidential and held by you
in confidence.
9. Goodwill and Compliance with Company Policies: You agree that you shall not
make, encourage or otherwise cause to be made any negative or disparaging
comments or statements (whether verbal or written) about the Company or
take any action which will place the Company in a bad light or false light.
You further agree that during the transition period you will abide by and
comply with the policies and procedures of the Company. The Company further
agrees that it will not hinder Linda J. Paradiso in her efforts to obtain
alternative employment by encouraging or otherwise causing to be made any
negative or disparaging comments or statements (whether verbal or written)
regarding her employment with the Company. Nor will the Company place Linda
J. Paradiso in a bad light or false light during or after the transition
period.
10. No Admission: This severance package or Agreement shall not be construed or
used as an admission of liability or wrongdoing by either you or the
Company.
11. General Release: In consideration of the above promises and payments to be
made to you, you fully and forever release and discharge the Company and
each of its current, former and future parents, subsidiaries, related
entities, employee benefit plans and their fiduciaries, predecessors,
successors, officers, directors, shareholders, agents, employees and
assigns (collectively, "Releasees"), with respect to any and all claims,
liabilities and causes of action, of every nature, kind and description, in
law, equity or otherwise, which have arisen, occurred or existed at any
time prior to the signing of this Agreement, including, without limitation,
any and all claims, liabilities and causes of action arising out of or
relating to your employment with the Company or the cessation of that
employment.
12. Knowing Waiver of Employment - Related Claims: You acknowledge that you
understand and agree that you are waiving any and all rights you may have
had or now have, to pursue against any of the Releasees any and all
remedies available to you under any employment - related causes of action,
including without limitation, claims of wrongful discharge, breach of
contract, breach of the covenant of good faith and fair dealing, fraud,
violation of public policy, defamation, discrimination, personal injury,
physical injury, emotional distress, claims under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in employment Act,
the Americans With Disabilities Act, the Federal Rehabilitation Act, the
Family and Medical Leave Act, the California Fair Employment and Housing
Act, the California Family Rights Act, the Equal Pay Act of 1963, the
provisions of the California Labor Code and any other federal, state or
local laws and regulations relating to employment, conditions of employment
(including wage and hour lows) and/or employment discrimination. You
specifically acknowledge and agree that you waive any claim against the
Company arising out of the termination of your employment with the Company
which the parties have agreed will become effective on or before January
30, 1998.
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13. Waiver of Civil Code Section 1542: You expressly waive any and all rights
and benefits conferred upon you by Section 1542 of the Civil Code of the
State of California, which states 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."
You expressly agree and understand that the Release given by you pursuant
to this Agreement applies to all unknown, unsuspected and unanticipated
claims, liabilities and causes of action which you may have against the
Company or any of the other Releasees, as of the date this agreement is
executed.
14. Severability of Release Provisions: You agree that if any provision of the
release given by you under this Agreement is found to be unenforceable, it
will not affect the enforceability of the remaining provisions and the
courts may enforce all remaining provisions to the extent permitted by law.
15. Promise to Refrain from Suit or Administrative Action: You promise and
agree that you will never sue the Company or any of the other Releasees, or
otherwise institute or participate in any legal or administrative
proceedings against the Company or any of the other Releasees, with respect
to any claim covered by the release provisions of this Agreement, including
but not limited to claims arising out of your employment with Company or
the cessation of that employment, unless you are compelled by legal process
to do so.
16. Indemnification: Not withstanding Linda Paradiso's departure from the
Company, in the event that a claim is made against Linda Paradiso in
connection with her performance of her job duties while employed by
DepoTech Corporation, the Company will indemnify Linda Paradiso under the
conditions and to the extent required by California Labor Code Section
2802. Nothing in this Agreement shall constitute a waiver of any objections
or defenses available to the Company, which are expressly reserved.
17. Entire Understanding: This Agreement contains the entire understanding
between you and the Company relating to your Separation and severance
package, superseding all prior understandings and agreements between the
parties, if any.
18. Arbitration: In the event of a dispute over the performance, interpretation
or validity of this Agreement, the parties agree to submit any and all
disputes relating to this Agreement to binding arbitration before
JAMS/Endispute, Southern California. Any arbitration award shall be final
and binding on the parties and may be entered in any court having
jurisdiction.
19. Applicable Law: This Agreement will be governed by California Law.
Linda, you are entitled by law to review this Agreement for a period of 21 days.
The Company encourages you to use this opportunity to review the Agreement with
an attorney. Should you decide not to use the full 21 days, then you knowingly
and voluntarily waive any claims that you were not in fact given 21 days to
consult an attorney and/or review the Agreement.
In addition, for a period of seven (7) days following your execution of this
Separation Agreement, you may revoke this Separation Agreement, and the
Separation Agreement shall not become effective or enforceable until the
revocation period has expired. Any revocation within the seven days must be in
writing, addressed to Thomas Swedberg, SPHR at DepoTech Corporation's address.
If you revoke this Separation Agreement, it shall not be affective or
enforceable and you will not receive the benefits described in paragraphs 3, 4
and 5 (a-d).
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If you agree with the foregoing package and release, please sign below. You
agree that you have read and understand this Separation Agreement, and that you
have signed it freely and voluntarily.
Sincerely,
/s/ John P. Longenecker
John P. Longenecker
Senior Vice President and COO
Agreed:
/s/ Linda Paradiso 1/12/98
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Linda Paradiso, DVM Date