Ex 10.3
GENERAL RELEASE AND SEPARATION AGREEMENT
This is a General Release and Separation Agreement is entered into this
21st day of September, 2001 (this "AGREEMENT") by and between S. ▇▇▇▇▇ ▇▇▇▇▇
(the "EMPLOYEE") and Imatron Inc. (the "COMPANY").
WHEREAS, General Electric Company, a New York corporation (the
"PARENT"), Ruby Merger Corp. and the Company have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "MERGER AGREEMENT"), pursuant
to which Ruby Merger Corp. will merge with and into the Company (the "MERGER");
WHEREAS, the Employee is a key employee of the Company, and the Company
desires to provide an incentive to the Employee to continue to serve the Company
as Chief Executive Officer of the Company pending the Merger;
WHEREAS, the Company and the Employee intend that the terms and
conditions of this Agreement shall govern all issues related to the termination
of Employee's employment by the Company;
WHEREAS, the Company advised the Employee in writing to consult with a
lawyer before signing this Agreement;
WHEREAS, the Employee acknowledges that the consideration to be
provided to the Employee hereunder is sufficient to support this Agreement;
WHEREAS, the Employee represents that the Employee has not filed any
charges, claims or lawsuits against the Company or the Parent involving any
aspect of the Employee's employment which have not been terminated as of the
date of this Agreement; and
WHEREAS, the Employee understands that the Company regards the
representations by the Employee as material and that the Company is relying on
these representations in paying amounts to the Employee pursuant to this
Agreement.
THEREFORE, the parties agree as follows:
1. TERMINATION. The Employee's employment with the Company shall
terminate (the "EMPLOYMENT TERMINATION") at the Effective Time as defined in the
Merger Agreement (the "TERMINATION DATE"). Upon Employment Termination, the
Employee shall receive the termination payments set forth in Section 2 of this
Agreement and the additional benefits set forth in Section 3 of this Agreement.
2. TERMINATION PAYMENT. Upon the occurrence of the Employment
Termination, the Company shall pay the Employee the Termination Payment set
forth on Schedule I to this agreement (the "TERMINATION PAYMENT") in a lump sum
in immediately available funds as follows: (a) one-half is payable in a lump sum
in immediately available funds within 5 business
days after the Termination Date, but in no event earlier than January 3, 2002,
and (b) the remainder is payable in a lump sum in immediately available funds on
the first anniversary of the date the payment in subsection (a) hereof is made.
3. ADDITIONAL BENEFITS.
3.1. FORGIVENESS OF DEBT. Upon the occurrence of the
Employment Termination, any indebtedness, including both principal and interest,
outstanding under the Promissory Note issued by Employee in favor of the Company
dated June 5, 1998 shall be forgiven to the extent such indebtedness does not
exceed $112,500.
3.2. STOCK OPTIONS. Employee's vested and unvested options
will be treated under the Merger Agreement in the same manner as all other
options outstanding under the Company's 1993 Stock Option Plan and 2001 Stock
Option Plan are required to be treated under the terms of the Merger Agreement,
provided, however, that Employee shall not receive any Parent Stock Options (as
such term is defined in the Merger Agreement) under Section 5.7(c) of the Merger
Agreement.
3.3. 2001 BONUS. The Company acknowledges that Employee is
scheduled to receive a bonus payment in the amount set forth on Schedule II (the
"BONUS PAYMENT") for services rendered during the fiscal year 2001. The Company
will pay the Bonus Payment to Employee on the Employment Termination. Such
payment shall be made without regard to the Employee's employment status.
Employee is not entitled to the payment of any bonuses other than the Bonus
Payment.
4. LIMITATION ON PAYMENTS TO EMPLOYEE. The parties hereby agree that
any payments and/or benefits received or deemed received by Executive pursuant
to this Agreement shall not be treated as an "excess parachute payment" within
the meaning of Sections 4999(b) and 280G(b) of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision or comparable federal,
state, or local tax provision). The parties further agree that, in the event
that any such payments and/or benefits result in the imposition of excise tax
under Section 4999 of the Code (or any successor provision or comparable
federal, state, or local tax provision), Executive will indemnify the Company
for any liabilities imposed on the Company as a result of the Company's failure
to withhold such excise taxes from the payments and/or benefits received or
deemed received by Executive pursuant to this Agreement.
5. RESTRICTIVE COVENANTS
5.1. CONFIDENTIALITY. The Employee understands and
acknowledges that during the Employee's employment with the Company, the
Employee has had and will have access to and has learned and will learn (i)
information proprietary to the Company and its subsidiaries and affiliates
("AFFILIATES") that concerns the operation and methodology of the businesses
conducted by the Company and its Affiliates and as the same are hereafter
conducted by the Company and its Affiliates (the " BUSINESS") or (ii) other
information proprietary to the Company and its Affiliates, including, without
limitation, trade secrets, processes, patent and trademark applications, product
development, price, customer and supply lists, pricing and marketing plans,
policies and strategies, details of client and consultant contracts, operations
methods, product
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development techniques, business acquisition plans, new personnel acquisition
plans and all other confidential information with respect to the Business
(collectively, "PROPRIETARY INFORMATION"). The Employee agrees that, from and
after the Effective Time, the Employee will keep confidential and will not
disclose directly or indirectly any such Proprietary Information to any third
party, except as required to fulfill the Employee's duties as an employee of the
Company, and will not misuse, misappropriate or exploit such Proprietary
Information in any way. The restrictions contained herein shall not apply to any
information which (a) was already available to the public at the time of
disclosure, or subsequently becomes available to the public otherwise than by
breach of this Agreement, or (b) was disclosed due to a requirement of law,
provided that the Employee shall have given prompt notice of such requirement to
the Company to enable the Company to seek an appropriate protective order with
respect to such disclosure. Upon any termination of the employment of the
Employee, the Employee shall promptly return to the Company and its Affiliates
all documents, computer disks, records, notebooks and similar repositories of
any Proprietary Information in the Employee's possession, including copies
thereof.
5.2 AGREEMENT NOT TO COMPETE.
(a) During the period set forth on Schedule III to
this Agreement (the "NON-COMPETE PERIOD"), Employee shall not, directly or
indirectly (whether as a principal, agent, independent contractor, employee,
partner, member, owner or in any other similar capacity), own, manage, operate,
control, participate in, perform services for, or otherwise carry on, a business
similar to or competitive with the Company Business anywhere in or outside the
United States. Notwithstanding the foregoing, Employee shall not be prohibited
from owning not more than 1% of the voting stock of any publicly traded entity.
For purposes of this Section 5.2, "Company Business" shall mean the design,
development, manufacture, sale or distribution of products or technology for any
medical imaging devices in the cardiology field in any imaging modality. By way
of description, but not of limitation, companies engaged in the Company Business
shall include ▇▇▇▇▇▇▇▇, Siemens, Toshiba and Hitachi, or any business engaged in
computed tomogrophy or electron beam computed tomography imaging.
Notwithstanding the foregoing, Employee shall be permitted to perform consulting
services, and to own up to a five percent equity interest in, Positron
Corporation.
(b) During the Non-Compete Period, Employee shall
not, directly or indirectly, solicit, hire or attempt to hire any employee of
the Company for so long as such employee remains employed with the Company.
(c) Except as permitted by Parent or as is otherwise
necessary to carry out Employee's duties, during the Non-Compete Period,
Employee shall not, directly or indirectly, call on or solicit any person, firm,
corporation, business or other entity who or which is, or within two years prior
to the Effective Date had been, a customer or potential customer, of Company
with respect to the business conducted by the Company similar to or competitive
with the business of the Company as of the Effective Time.
6. RELEASE. The Employee, on behalf of the Employee and anyone claiming
through the Employee, including the Employee's heirs, assigns and agents,
releases and discharges the Company, the Parent and their respective directors,
officers, employees, subsidiaries, affiliates
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and agents, and the predecessors, successors and assigns of any of them (the
"RELEASED PARTIES"), from each and every claim, action or right of any sort, in
law or in equity, known or unknown, asserted or unasserted, foreseen or
unforeseen, arising on or before the Termination Date. The foregoing
notwithstanding, Employee is not releasing and this Agreement is not intended to
release any of the following: (i) any vested benefit entitlements to Employee
under the Company's 401(k) plan; (ii) subject to the terms of Section 5.11 of
the Merger Agreement, any and all rights of Employee to indemnification arising
pursuant to contract, the Company's articles of incorporation or bylaws, or by
operation of law, as a result of his having served as an employee, officer or
director of the Company; or (iii) any rights pursuant to Sections 2 or 3 of this
Agreement.
(a) This release includes, but is not limited to: any
claim of discrimination on the basis of race, sex, religion, marital status,
sexual orientation, national origin, handicap or disability, age, veteran
status, special disabled veteran status or citizenship status; any other claim
based on a statutory prohibition or common law doctrine; any claim arising out
of or related to the Employee's employment with the Company, the terms and
conditions thereof or the termination or cessation thereof; any express or
implied employment contract, any other express or implied contract affecting
terms and conditions of the employee's employment or the termination or
cessation thereof, or a covenant of good faith and fair dealing; any tort claims
and any personal gain with respect to any claim arising under the qui tam
provisions of the False Claims Act, 31 U.S.C. 3730.
(b) The Employee represents that the Employee
understands this Agreement, that rights and claims under the Age Discrimination
in Employment Act of 1967, as amended, the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Older Workers'
Benefit Protection Act, the Family and Medical Leave Act, the Americans with
Disabilities Act, and the Employee Retirement Income Security Act of 1974 are
among the rights and claims against the Released Parties the Employee is
releasing, and that the Employee understands that the Employee is not releasing
any rights or claims arising after the Effective Date.
(c) The Employee further agrees never to ▇▇▇ the
Released Parties or cause the Released Parties to be sued regarding any matter
within the scope of Section 6 of this Agreement. If the Employee violates this
Agreement by suing any of the Released Parties or causing any of the Released
Parties to be sued, the Employee agrees to pay all costs and expenses of
defending against the suit incurred by the Released Parties, including
reasonable attorneys' fees.
(d) The Employee expressly represents and warrants
that the Employee is the sole owner of the actual or alleged claims, demands,
rights, causes of action and other matters that are released herein, that the
same have not been transferred or assigned or caused to be transferred or
assigned to any other person, firm, corporation or other entity, and that the
Employee has the full right and power to grant, execute and deliver this
Agreement.
7. The Employee understands that any and all Company covenants which
relate to Company obligations to the Employee after the Termination Date,
including but not limited to
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the payments set forth in Sections 2 and 3 of this Agreement, are contingent on
the Employee's satisfaction of the Employee's obligations under this Agreement.
8. The Employee agrees, subject to any obligations the Employee may
have under applicable law, that the Employee will not make or cause to be made
any statements that disparage, are inimical to, or damage the reputation of the
Company, the Parent or any of their affiliates, subsidiaries, agents, officers,
directors or employees. In the event such a communication is made to anyone,
including but not limited to the media, public interest groups and publishing
companies, it will be considered a material breach of the terms of this
Agreement and the Employee will be required to reimburse the Company for any and
all payments made under the terms of this Agreement and all commitments to make
additional payments to the Employee will be null and void.
9. The Company is not obligated to offer employment to the Employee (or
to accept services or the performance of work from the Employee directly or
indirectly) now or in the future.
10. The Employee may revoke this Agreement in writing within seven days
of signing it. This Agreement will not take effect until the Effective Time (as
set forth in Section 10 of this Agreement). If the Employee revokes this
Agreement, all of its provisions shall be void and unenforceable.
11. This Agreement shall be effective as of the Effective Time (as that
term is defined in the Merger Agreement). In the event the Merger is not
consummated, this Agreement shall be null and void.
12. The Employee shall keep strictly confidential all the terms and
conditions, including amounts, in this Agreement and shall not disclose them to
any person other than the Employee's spouse, the Employee's legal or financial
advisor or United States governmental officials who seek such information in the
course of their official duties, unless compelled by law to do so. If a person
not a party to this Agreement requests or demands, by subpoena or otherwise,
that the Employee disclose or produce this Agreement or any terms or conditions
thereof, the Employee shall immediately notify the Company and shall give the
Company an opportunity to respond to such notice before taking any action or
making any decision in connection with such request or subpoena.
13. This Agreement constitutes the entire understanding between the
parties relating to the services of Employee. The Employee has not relied on any
oral statements that are not confirmed in this Agreement. Upon its
effectiveness, this Agreement will supercede all prior employment agreements or
arrangements between the parties, including, but not limited to the Executive
Employment Agreement dated as of June 11, 1993.
14. In the event that any provision of this Agreement is determined to
be legally invalid or unenforceable by any court of competent jurisdiction, and
cannot be modified to be enforceable, the affected provision shall be stricken
from the Agreement, and the remaining terms of the Agreement and its
enforceability shall remain unaffected.
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15. This Agreement shall be construed, interpreted and applied in
accordance with the law of the State of New York (other than conflict of laws
principles).
16. The Employee expressly waives any and all rights under Section 1542
of the Civil Code of the State of California and under any statue, rule or
principle of common law or equity, of any jurisdiction, that is similar to
Section 1542 ("SIMILAR PROVISION"). Thus, the Employee acknowledges that he may
not invoke the benefits of Section 1542 or any Similar Provision in order to
prosecute or assert in any manner any claims released in the Agreement. The
Employee is aware that Section 1542 provides 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."
17. This Agreement or any part hereof, may not be assigned by Employee.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and any successor or assign of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
IMATRON INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
EMPLOYEE
/s/ S. ▇▇▇▇▇ ▇▇▇▇▇
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Date: September 21, 2001
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SCHEDULE I - TERMINATION PAYMENT
"TERMINATION PAYMENT" means $464,450
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SCHEDULE II - BONUS PAYMENT
"BONUS PAYMENT" means $50,000
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SCHEDULE III - NON-COMPETE PERIOD
"NON-COMPETE PERIOD" means the term of Employee's employment with the Company or
an Affiliate of the Company and a period of one year following termination of
such employment.
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