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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q/A
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
METRA BIOSYSTEMS, INC.
-----------------------------------------------------
(Exact Name of Registrant as specified in its charter)
0-26234
----------------------
Commission File Number
CALIFORNIA 33-0408436
- --------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
265 NORTH WHISMAN ROAD, MOUNTAIN VIEW, CA 94043-3911
----------------------------------------------------
(Address of Registrant's principal executive offices)
(415) 903-9100
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
[ X ]Yes [ ] No.
The number of shares of the Registrant's common stock outstanding as of
October 31, 1996 was 12,600,171.
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METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION 3
ITEM 1. FINANCIAL STATEMENTS 3
Consolidated Condensed Balance Sheets
September 30, 1996 and June 30, 1996 3
Consolidated Condensed Statements of Operations
Three Months ended September 30, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows
Three Months ended September 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION, RESULTS OF OPERATIONS
AND FACTORS THAT MAY AFFECT FUTURE RESULTS 8-10
PART II. OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
HOLDERS 11
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURE 11
2
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PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1996 1996
------------- ---------
(Unaudited)
<S> <C> <C>
Current assets:
Cash, cash equivalents $18,480 $19,217
Securities available-for-sale, at market 23,561 26,283
Accounts receivable, net 1,179 1,266
Interest receivable 453 578
Inventories 926 1,040
Prepaid expenses and other current assets 399 249
------------- ---------
Total current assets 44,998 48,633
Property and equipment, net 4,647 4,314
Securities available-for-sale, at market 5,061 6,747
Other assets, net 77 499
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$54,783 $60,193
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------------- ---------
LIABILITIES, AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $ 408 $ 407
Accounts payable 1,547 2,185
Accrued expenses 1,855 1,810
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Total current liabilities 3,810 4,402
Capital lease obligations 1,269 1,367
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Total liabilities 5,079 5,769
Preferred stock - -
Common stock 13 13
Capital in excess of par value of common stock 94,540 94,539
Notes receivable from shareholders (90) (90)
Deferred compensation (69) (79)
Foreign currency translation adjustment 15 13
Unrealized loss on securities available-for-sale (27) (83)
Accumulated deficit (44,678) (39,889)
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Total shareholders' equity 49,704 54,424
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$54,783 $60,193
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</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
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METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
QUARTER ENDED SEPTEMBER 30,
-----------------------------
1996 1995
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Revenues:
Product sales $ 1,167 $ 715
Partner revenues 76 375
--------- --------
Total revenues 1,243 1,090
Operating expenses:
Cost of product sales 972 869
Research and development 1,677 878
Sales and marketing 2,842 942
General and administrative 1,166 537
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Total operating expenses 6,657 3,226
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Loss from operations (5,414) (2,136)
Interest income, net 625 441
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Net loss $ (4,789) $(1,695)
--------- --------
--------- --------
Net loss per share $ (0.38) $ (0.18)
--------- --------
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Weighted average shares used to compute
net loss per share 12,599,700 9,659,436
------------ -----------
------------ -----------
See accompanying notes to consolidated condensed financial statements.
4
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METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
---------------------------
1996 1995
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net cash used in operating activities (4,478) (1,967)
Cash flows from investing activities:
Purchases of investment securities (2,021) (11,798)
Maturities and sales of investment securities 6,485 1,000
Purchases of property and equipment (627) (1,952)
Proceeds from sale of property and equipment - -
--------- ----------
Net cash (used in) provided by investing activities 3,837 (12,750)
Cash flows from financing activities:
Repayment of capital lease obligations (97) (26)
Proceeds from sales of common stock 1 32,027
--------- ----------
Net cash provided by (used in) financing activities (96) 32,001
Net increase (decrease) in cash and cash equivalents (737) 17,279
Cash and cash equivalents at beginning of year 19,217 2,317
--------- ----------
Cash and cash equivalents at end of year $18,480 $19,596
--------- ----------
--------- ----------
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 76 $ 3
Supplemental disclosure of noncash investing and financing
activities - conversion of mandatorily redeemable preferred
stock and common stock warrant to common stock $ - $23,260
Upon completion of the Initial Public Offering, $727 of prepaid
IPO costs were debited to additional paid in capital $ - $ 727
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
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METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Metra Biosystems, Inc. ("Metra" or the "Company") was incorporated on March
21, 1990. Since the commencement of operations the Company has been engaged in
the development and commercialization of diagnostic products for the detection
and management of metabolic bone diseases and disorders.
In December 1993, the Company incorporated a wholly-owned subsidiary, Metra
Biosystems (U.K.) Ltd., that is responsible for the commercialization of Metra's
products in Europe. In October, 1995, a branch office of Metra Biosystems
(U.K.) Ltd. was opened in Milan, Italy.
In January 1996, the Company acquired Osteo Sciences Corporation, a wholly-
owned subsidiary, responsible for research and development of the Company's
ultrasound technology.
2. INVESTMENT SECURITIES
Investment securities which are classified as available-for-sale at
September 30, 1996 and June 30, 1996 include the following:
- ---------------------------------------------------------------------
September 30, June 30,
1996 1996
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Fair Value (in thousands)
U.S. Government securities $ 8,518 $ 8,516
Mortgage-backed securities 9,195 12,132
Corporate bonds 10,672 12,174
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28,385 32,822
Marketable equity securities 237 208
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$28,622 $33,030
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Cost
U.S. Government securities $ 8,516 $ 8,527
Mortgage-backed securities 9,209 12,148
Corporate bonds 10,674 12,188
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28,399 32,863
Marketable equity securities 250 250
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$28,649 $33,113
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- ---------------------------------------------------------------------
6
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The cost and estimated fair value of securities available-for-sale as of
September 30, 1996, by contractual maturity, consisted of the following:
Adjusted Fair
Cost Value
------------ -----------
Due in one year or less $12,898 $12,885
Due in one to four years 6,542 6,542
------------ -----------
19,440 19,427
Mortgage-backed securities 9,209 9,195
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$28,649 $28,622
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------------ -----------
3. INVENTORIES
Inventories consist of the following:
- -----------------------------------------------------------------------
September 30, June 30,
1996 1996
-------------- ------------
(in thousands)
Raw materials $ 263 $ 216
Finished goods 663 824
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$ 926 $1,040
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- ------------------------------------------------------------------------
4. STOCK OPTION REPRICING
In August 1996, the Board of Directors authorized the repricing of options
to purchase 550,485 shares of common stock as of the close of business on August
21, 1996 at fair market value, which was $5.00 per share. The repriced options
begin to vest on August 21, 1996 and may not be exercised for a period of six
months.
5. MANAGEMENT REPRESENTATION
The accompanying unaudited consolidated condensed financial statements
have been prepared by the Company, pursuant to the rules and regulations of
the Securities and Exchange Commission, and reflect all adjustments,
consisting only of normal recurring adjustments, which, in the opinion of
management, are necessary for a fair statement of the results for the interim
periods presented. Operating results for the three months ended
September 30, 1996 are not necessarily indicative of the results to be
expected for the year.
Certain information in footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been condensed or omitted pursuant to such rules and regulations. It is
suggested that these consolidated financial statements be read in conjunction
with the consolidated financial statements and the notes thereto contained in
the Company's Annual Report on Form 10-K, as amended on Form 10 K/A, for the
year ended June 30, 1996, previously filed with the Securities and Exchange
Commission.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
REVENUES - Total revenue for the first quarter ended September 30, 1996
was $1,243,000, an increase of 14 percent from the same period in the prior
fiscal year. Product sales increased 63 percent to $1,167,00 over the
corresponding period of fiscal 1996. Partner revenues decreased to $76,000
from $375,000 in the first quarter of fiscal 1996.
The growth in product sales for the first quarter of fiscal 1997 was
principally due to an increased awareness and market acceptance of the
Company's products in international markets and due to the introduction in
the United States in January 1996 of the Company's bone resorption products
for clinical use. Partner revenues decreased in fiscal 1997 due to
non-recurring licensing fees and milestone payments which were earned in the
first quarter of fiscal 1996.
PRODUCT COSTS AND EXPENSES - Cost of product sales were $972,000 for the
quarter ended September 30, 1996, an increase of 12 percent from the same
period in the prior fiscal year. This increase was primarily related to
product sales growth and, to a lesser extent, the expensing of production
costs incurred in anticipation of sales growth including investments in
scale-up capabilities.
Research and development expenses for the quarter ended September 30,
1996 increased to $1,677,000. This represents a 91 percent increase over the
same period in the prior fiscal year. This increase was related to the
on-going research costs of the Company's Ultrasound program which was
acquired in January 1996 (Osteo Sciences Corporation) as well as increased
internal product development programs and external collaborative efforts.
The Company expects research and development expenditures to increase during
the next several years, as the Company continues to pursue a strong
scientific foundation for its products and programs.
Sales and marketing expenses for the quarter ended September 30, 1996
were $2,842,000, an increase of 202 percent from the first quarter of fiscal
1996. The Company has launched specific programs aimed at increasing
physician awareness and market acceptance of its products in the United
States in fiscal 1997 that were not present in the same period in the prior
fiscal year. Additional increases can be attributed to the presence of a US
sales force and a sales office in Milan, Italy in fiscal 1997, both of which
were not in place in the first quarter of fiscal 1996. Sales and marketing
expenditures are expected to increase in the next several years as additional
marketing programs and sales and marketing staff are added to support the
expansion of the sales operations domestically and internationally.
General and administrative expenses for the quarter ended September 30,
1996 were $1,166,000, an increase of 117 percent over the same period in the
prior fiscal year. This increase is due to increased personnel costs as well
as additional legal and consulting expenses necessary to support the
Company's expanded operations over the same period in the prior fiscal year.
8
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NET INTEREST INCOME - Net interest income for the quarter ended September
30, 1996 was $625,000, a 42 percent increase over the same period in the prior
fiscal year. This incrase was due to increased cash resources resulting from
the Company's follow-on offering in April 1996.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES - The Company had cash and cash
equivalents and investments of $47.1 million at September 30, 1996. The
Company's use of cash in operating activities was $4.5 million for the
quarter ended September 30, 1996 compared to $2.0 million for the period
ending September 30, 1995. The increase in cash usage was primarily due to
the increased net loss for the corresponding periods and, to a lesser extent,
fluctuations in working capital. Net cash used in financing activities for
the quarter ended September 30, 1996 was $96,000. This cash usage was
related to the payment of the Company's capital leases.
Capital expenditures for the first three months of fiscal 1997 were
$627,000, compared to $1,952,000 for the corresponding period in fiscal 1996.
This decrease is primarily due to leasehold improvements to a new facility
incurred in the first quarter of fiscal 1996 in support of the Company's
expanding operations in Mountain View, California.
The Company's future capital requirements depend upon, among other things,
the costs of research and development programs, the funding of clinical and
regulatory related studies, the expansion of marketing and selling activities,
costs involved in filing, prosecuting and enforcing patent claims, and the time
and costs associated with obtaining regulatory approvals for future products.
Funds may also be used for investments in, or acquisitions of, complementary
businesses, products or technologies, in expanding the Company's manufacturing
capacity or in improving its existing facilities. Although the Company believes
that its current cash, cash equivalents and investment securities will be
sufficient to meet the Company's operating expenses and capital requirements
through fiscal 1998, the Company's future liquidity and capital requirements
will depend on numerous factors, including regulatory actions by the FDA and
other international regulatory bodies, market acceptance of its products,
expansion of the Company's marketing and sales activities and the cost of
intellectual property protection. The Company may, however, seek additional
equity or debt financing to fund further expansion of its manufacturing
capacity, or to fund other projects or acquisitions. The timing and amount of
such capital requirements cannot be precisely determined at this time and will
depend on a number of factors, including demand for the Company's products,
product mix changes, industry conditions and competitive factors. There can be
no assurance that if it becomes necessary to raise additional capital, that such
capital will be available on acceptable terms, if at all.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company commenced its marketing efforts in the United States upon receiving
510(k) clearance in December 1995, and does not anticipate significant revenues
from clinical sales of its products in the United States unless and until the
results of its marketing efforts are realized. The Company may continue to
experience increased product sales over the prior fiscal year. However, the
success of achieving increased sales growth depends upon increased awareness and
acceptance of its products among clinicians, adequate levels of third-party
reimbursement for clinical use of its diagnostic tests, ability to successfully
launch new
9
<PAGE>
products, and continued sales growth of the Company's manual test formats.
There can be no assurance that the Company can successfully achieve any of
the above items in a timely manner or at all, and failure to do so could have
a material adverse effect on the Company's business, financial condition and
results of operations.
DISCLOSURE PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MANAGEMENT'S
DISCUSSION AND ANALYSIS SET FORTH ABOVE ARE FORWARD-LOOKING STATEMENTS THAT
ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES. THESE RISKS AND
UNCERTAINTIES INCLUDE SUCH FACTORS, AMONG OTHERS, AS THE UNCERTAINTY OF
MARKET ACCEPTANCE FOR BIOCHEMICAL MARKERS, METRA'S DEPENDENCE UPON
INTERNATIONAL SALES, THE UNCERTAINTY OF INTERNATIONAL REGULATIONS, METRA'S
RELIANCE UPON COLLABORATIVE RELATIONSHIPS, THE UNCERTAINTY OF ULTRASOUND
TECHNOLOGY DEVELOPMENT, COMPETITION AND REGULATION AND THE OTHER RISK FACTORS
LISTED IN THE COMPANY'S PROSPECTUS DATED APRIL 23, 1996 AND ANNUAL REPORT ON
FORM 10-K AND FORM 10-K/A FOR THE YEAR ENDED JUNE 30, 1996. THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE THE INFORMATION, INCLUDING THE
FORWARD-LOOKING STATEMENTS, IN THIS FORM 10-Q.
10
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PART II. - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
None.
ITEM 2. - CHANGES IN SECURITIES
None.
ITEM 3. - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None.
ITEM 5. - OTHER INFORMATION
None.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
10.43 Separation Agreement and Mutual Release, dated September 18, 1996,
between the Company and Colette Z. Andrea.
------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/S/ Kurt E. Amundson February 10, 1997
- -------------------- ---------------------
Kurt E. Amundson.
Vice President and Chief Financial Officer
(duly authorized and principal financial and
principal accounting officer)
11
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SEPARATION AGREEMENT AND MUTUAL RELEASE
This Agreement, dated as of September 18, 1996 ("Effective Date"), is
between Metra Biosystems, Inc., a California corporation ("Metra"), and
Colette Z. Andrea ("Andrea").
RECITALS
Andrea desires to resign her employment with Metra effective as of
September 18, 1996 ("Resignation Date"), and Metra is willing to accept
Andrea's resignation.
Metra desires to retain Andrea's services as a consultant and Andrea is
willing to serve as a consultant under the conditions described herein.
Metra and Andrea desire to resolve all claims as described in this
Agreement and thereby avoid the expense and uncertainty of litigation.
ACCORDINGLY, the parties agree as follows:
1. METRA'S OBLIGATIONS. In consideration for Andrea's voluntary
resignation and the other obligations described below, Metra agrees to
provide Andrea the following severance benefits:
(A) SEVERANCE AND CONSULTING PAYMENTS. For the lesser of (a)
until March 18, 1997, or (b) until Andrea becomes employed at another
employer (defined as the "Initial Severance Period"), Metra agrees to pay
Andrea, semi-monthly and in accordance with the Company's normal payroll
practices Seven Thousand Five Hundred Dollars ($7,500), less applicable
withholdings and any amounts earned by Andrea through consulting activities
she provides to other entities. In the event that Andrea becomes employed
at another employer prior to March 18, 1997, Metra agrees to pay Andrea as
a lump sum, less applicable withholdings, any remaining payments owed Andrea
during the Initial Severance Period (E.G., if Andrea is employed at three
(3) months, the remaining three (3) months of pay in lump sum, which would
be $45,000, less the same withholdings that apply for any employee as
required by law, will be provided to Andrea.)
If Andrea remains unemployed at the conclusion of the Initial
Severance Period, and has made good faith efforts to seek reemployment,
Metra agrees to continue these payments for the lesser of (a) until
September 18, 1997, or (b) until Andrea becomes employed at another employer
(defined as the "Extended Severance Period"). "Good faith" is defined as
the steps necessary for a reasonable person in Andrea's position at Metra
prior to the date of resignation hereunder to secure comparable employment
in Northern California. "Employment" is defined as a full-time,
nonconsulting position, with an annual salary not less than $160,000.00.
1
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Should Andrea become either physically or mentally disabled such that
she cannot be employed, or if Andrea sustains death, the obligations of
Metra will not cease under this Agreement, and the terms and conditions of
the agreement will inure to the benefit of Andrea's family, husband and
children.
(B) BENEFITS CONTINUATION. Metra will provide Andrea and her
dependents with the medical and dental benefits required by the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). In the
provision of these benefits, Metra agrees to pay Andrea's COBRA premiums,
less her current family copayment for coverage as Andrea and all executives
now make, through September 18, 1997, or until Andrea becomes eligible for
coverage under another plan (the "Benefits Continuation Period"). Following
the Benefits Continuation Period, Metra shall continue to provide COBRA
benefits as required by law, with Andrea to pay the COBRA premiums.
(C) CONTINUED STOCK VESTING. Subject to Andrea's continued
eligibility to receive the severance and consulting payments described in
Paragraph 1(a) above, and subject to her continued adherence to the
noncompetition obligations set forth in paragraph 2(e) below, Andrea will
continue to vest in common stock Andrea received under the
December 30, 1994 stock grant. However, Metra agrees that, should Andrea
become reemployed during the Initial Severance Period, she, nonetheless,
will be permitted to continue to vest in the common stock she received
under the December 30, 1994 stock grant until March 18, 1997.
(D) OUTSTANDING AMOUNTS OWED FOR HOUSING LOAN AND RELOCATION
EXPENSES. Any amounts owed by Andrea to Metra arising from Andrea's
housing loan or relocation expenses will be written off by Metra.
(E) INDEMNIFICATION. Metra agrees to indemnify Andrea for any fees,
costs and penalties if Andrea is named as a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by
reason of the fact that Andrea was an officer, employee or agent of Metra
or based upon any action or inaction undertaken by Andrea while exercising
her duties and responsibilities on behalf of Metra. In this regard, Metra
reaffirms its obligations to Andrea under the Metra Biosystems
Indemnification Agreement the parties executed on September 26, 1994.
(F) REFERENCE LETTERS. Metra agrees that Mr. George Dunbar and
Mr. Ronald Steckel will provide Andrea with mutually-acceptable letters of
reference (attached).
(G) PRESS RELEASE. Prior to publishing a press release describing
Andrea's resignation from the Company, Metra will share with Andrea the
contents of any release in which her resignation is described. The
release, to the extent that it shall refer, either directly or indirectly,
to Andrea shall be approved and/or edited by Andrea prior to its
publication.
2
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2. ANDREA'S OBLIGATIONS.
(A) RESIGNATION. Andrea resigns her employment with Metra effective
as of September 18, 1996.
(B) NOTICE OF REEMPLOYMENT. During the Initial and Extended
Severance Periods, Andrea shall provide Metra advance written notice of
(i) the effective date of any subsequent employment, and (ii) the effective
date of her eligibility under any applicable benefit plan with another
employer.
(C) NOTICE OF CONSULTANTSHIP INCOME AND REEMPLOYMENT EFFORTS. Andrea
agrees that throughout the severance continuation period, she will report,
in writing and on a semi-monthly basis, to Debby Dean at Metra, all income
she earns as a consultant or an employee from entities other than Metra
and, further, understands that such income shall be deducted from the
severance payments described in Paragraph 1(a) above.
Andrea also agrees that she will report to Ms. Dean, in writing every
ninety days, the number of all prospective employers and search firms that
Andrea has contacted with respect to her efforts to seek reemployment.
(D) SERVICE AS CONSULTANT TO METRA. During the severance period,
Andrea agrees to serve as a consultant to Metra, and will provide
consulting services, as required by the Company, not to exceed six hours
per month.
(E) NONCOMPETITION. During the period Andrea receives severance
benefits under Paragraph 1(a) above, Andrea agrees that she will not work
for, as either an employee or a consultant, any of the following companies:
(1) DSL; (2) Inc Star; (3) Osteometer; (4) Ostex International; (5) The
Nichols Institute; (6) Lunar; (7) Norland; and (8) Hologic. If Andrea
accepts employment with, or provides consulting services for, the entities
listed above, all severance payments, benefits continuanceand stock vesting
under this Agreement will cease.
(F) COOPERATION. Andrea shall cooperate with Metra in (i) the
orderly transfer of Andrea's responsibilities to other person(s); (ii) the
defense of any action brought by any third party against Metra that relates
in any way to Andrea's acts or omissions while employed by Metra; and
(iii) the prompt return to Metra of all property of Metra, including,
without limitation, her building access card and keys, all equipment,
tangible proprietary information, documents, books, records, reports,
contracts, lists, computer disks (or other computer-generated files or
data), or copies thereof, created on any medium, prepared or obtained by
Andrea in the course of or incident to her employment with Metra.
3
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(G) CONFIDENTIAL INFORMATION. Andrea shall not, for the benefit of
any person or entity other than Metra, disclose or use any information
regarding Metra' business, employees, or customers, which was produced by
any employee of Metra in the course of his or her employment or otherwise
produced or acquired by or on behalf of Metra, and which is not properly in
the public domain.
Andrea further acknowledges that she remains bound by the obligations
set forth in the Non-Disclosure Agreement between the parties, dated
July 7, 1994, and in the Employee Confidentiality and Inventions Agreement
that she executed on December 10, 1994.
3. ACKNOWLEDGMENT THAT NO OTHER COMPENSATION DUE ANDREA. Andrea
expressly acknowledges that the payments and benefits described in Paragraph 1
above, include consideration beyond that to which Andrea is otherwise entitled
and all compensation due Andrea by Metra, including all wages, commissions,
bonus payments, and payments for accrued but unused vacation and stock options.
4. MUTUAL RELEASE.
(A) RELEASE BY ANDREA. Except for Metra's continuing obligations
under this Agreement, Andrea and her representatives, heirs, successors,
and assigns do hereby completely release and forever discharge Metra, any
Affiliate, and its and their present and former shareholders, officers,
directors, agents, employees, attorneys, successors, and assigns
(collectively, "Released Parties") from all claims, rights, demands,
actions, obligations, liabilities, and causes of action of every kind and
character, known or unknown, mature or unmatured, which Andrea may now have
or has ever had, arising out of Andrea's employment at Metra as prior to
the date of her resignation from Metra, whether based on tort, contract
(express or implied), or any federal, state, or local law, statute, or
regulation (collectively, the "Released Claims"). By way of example and
not in limitation of the foregoing, Released Claims shall include any
claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and
the California Fair Employment and Housing Act, as well as any claims
asserting wrongful termination, breach of contract, breach of the covenant
of good faith and fair dealing, negligent or intentional infliction of
emotional distress, negligent or intentional misrepresentation, negligent
or intentional interference with contract or prospective economic
advantage, defamation, invasion of privacy, and claims related to
disability. Released Claims shall also include, but not be limited to,
claims for severance pay, bonuses, sick leave, vacation pay, life or health
insurance, or any other fringe benefit. Andrea likewise releases the
Released Parties from any and all obligations for attorneys' fees incurred
in regard to the above claims or otherwise. Notwithstanding the foregoing,
Released Claims shall not include any claims based on obligations created
by or reaffirmed in this Agreement.
4
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(B) RELEASE BY METRA. Except for Andrea's continuing obligations
under this Agreement, Metra, any Affiliate, and its and their present and
former shareholders, officers, directors, agents, employees, attorneys,
successors, and assigns (referred to hereinafter collectively as "Metra")
do hereby completely release and forever discharge Andrea, and her
representatives, heirs, successors, and assigns from all claims, rights,
demands, actions, liabilities, causes of action, and obligations of any
kind and character whatsoever, whether known or unknown, matured or
unmatured, suspected or unsuspected, which Metra may now have or has ever
had against Andrea from the beginning of time through the date Metra and
Andrea executed this Agreement (collectively, the "Released Claims").
5. SECTION 1542 WAIVER. The parties understand and agree that the
Released Claims include not only claims presently known to Andrea and/or Metra,
but also include all unknown or unanticipated claims, rights, demands, actions,
obligations, liabilities, and causes of action of every kind and character that
would otherwise come within the scope of the Released Claims as described in
Section 4. Andrea and Metra understand that they may hereafter discover facts
different from what they now believe to be true which, if known, could have
materially affected this Agreement, but they, nevertheless, waive any claims or
rights based on different or additional facts. Andrea and Metra knowingly and
voluntarily waive any and all rights or benefits that they may now have, or in
the future may have, under the terms of Section 1542 of the California Civil
Code, which 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.
6. MUTUAL NONDISPARAGEMENT. Both Andrea and Metra's senior management,
as well as Metra's Board of Directors, agree that both Andrea and Metra's senior
management, as well as Metra's Board of Directors (both present and future)
shall not make or publish, either orally or in writing, any disparaging
statements regarding Andrea or Metra or Metra's senior management, or in any way
impede or interfere with the contracts or customer relationships of the other.
Metra will not authorize, ratify or condone any disparaging statements by any
other of its employees, agents, representatives of any type.
7 COVENANT NOT TO SUE. The parties shall not sue or initiate against
any Released Party any compliance review, action, or proceeding, or participate
in the same, individually or as a member of a class, under any contract (express
or implied), or any federal, state, or local law, statute, or regulation
pertaining in any manner to the Released Claims.
8. CONFIDENTIALITY. The parties understand and agree that this Agreement
and each of its terms, and the negotiations surrounding it, are confidential and
shall not be disclosed by the other to any entity or person, for any reason, at
any time, without the prior written consent of the other, unless required by
law. Notwithstanding the foregoing, Andrea may disclose the terms of
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this Agreement to her spouse, and for legitimate business reasons, to legal,
financial, and tax advisors.
9. AGE DISCRIMINATION CLAIMS. Andrea understands and agrees that, by
entering into this Agreement, (i) she is waiving any rights or claims she might
have under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act; (ii) she has received consideration beyond that
to which she was previously entitled; (iii) she has been advised to consult with
an attorney before signing this Agreement and has consulted with the Law Office
of Maryanne Zanios Murphy; and (iv) she has been offered the opportunity to
evaluate the terms of this Agreement for not less than twenty-one (21) days
prior to her execution of the Agreement but has voluntarily waived the remainder
of the twenty-one day period. Andrea may revoke this Agreement (by written
notice to Metra) for a period of seven (7) days after her execution of the
Agreement, and it shall become enforceable only upon the expiration of this
revocation period without prior revocation by Andrea.
10. ARBITRATION. All claims that Andrea may have against Metra or any
other Released Party, or which Metra may have against Andrea, of any kind,
including, but not limited to, all claims in any way related to the subject
matter, interpretation, application, or alleged breach of this Agreement
("Arbitrable Claims") shall be resolved by arbitration. Arbitrable Claims shall
include, but are not limited to, contract (express or implied) and tort claims
of all kinds, as well as all claims based on any federal, state, or local law,
statute, or regulation, excepting only claims under applicable workers'
compensation law and unemployment insurance claims. Arbitration shall be final
and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims. Arbitration of Arbitrable Claims shall be in accordance with
the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association, as amended, and as augmented by this Agreement. Either
party may bring an action in court to compel arbitration under this Agreement
and to enforce an arbitration award. Otherwise, neither party shall initiate or
prosecute any lawsuit or administrative action in any way related to any
Arbitrable Claim. The Federal Arbitration Act shall govern the interpretation
and enforcement of this Section. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY
HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.
11. NOTICES. Any notice under this Agreement must be in writing and shall
be effective upon delivery by hand or three (3) business days after deposit in
the United States mail, postage prepaid, certified or registered, and addressed
to Metra or to Andrea at the corresponding address below. Andrea shall be
obligated to notify Metra in writing of any change in her address. Notice of
change of address shall be effective only when done in accordance with this
Section.
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Metra' Notice Address:
Metra Biosystems, Inc.
265 North Whisman Road
Mountain View, CA 94043
Andrea's Notice Address:
Colette Z. Andrea
1531 Chaumont Drive
San Jose, CA 95118
12. INTEGRATION. The parties understand and agree that the preceding
Sections recite the sole consideration for this Agreement; that no
representation or promise has been made by Andrea, Metra, or any other Released
Party concerning the subject matter of this Agreement, except as expressly set
forth in this Agreement; and that all agreements and understandings between the
parties concerning the subject matter of this Agreement are embodied and
expressed in this Agreement.
13. AMENDMENTS; WAIVERS. This Agreement may not be amended except by an
instrument in writing, signed by each of the parties. No failure to exercise
and no delay in exercising any right, remedy, or power under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
14 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Andrea agrees that she will not
assign, sell, transfer, delegate, or otherwise dispose of, whether voluntarily
or involuntarily, or by operation of law, any rights or obligations under this
Agreement. Any such purported assignment, transfer, or delegation shall be null
and void. Andrea represents that she has not previously assigned or transferred
any claims or rights released by her pursuant to this Agreement. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective heirs, successors, attorneys, and permitted
assigns. This Agreement shall also inure to the benefit of any Released Party.
This Agreement shall not benefit any other person or entity except as
specifically enumerated in this Agreement.
15. SEVERABILITY. If any provision of this Agreement, or its application
to any person, place, or circumstance, is held by an arbitrator or a court of
competent jurisdiction to be invalid, unenforceable, or void, such provision
shall be enforced to the greatest extent permitted by law, and the remainder of
this Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
16. ATTORNEYS' FEES. In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs.
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17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
18. REPRESENTATION BY COUNSEL. The parties acknowledge that (i) they have
consulted counsel in regard to this Agreement; (ii) they have read and
understand the Agreement and they are fully aware of its legal effect; and (iii)
they are entering into this Agreement freely and voluntarily, and based on each
party's own judgment and not on any representations or promises made by the
other party, other than those contained in this Agreement.
19. AUTHORIZATION. Each of the parties has executed this Agreement, in
the case of Metra by its duly authorized officer, as of the day and year first
written above.
/s/ Colette Z. Andrea
-----------------------------------------
Colette Z. Andrea
METRA BIOSYSTEMS, INC.
/s/ George W. Dunbar
-----------------------------------------
George W. Dunbar
President and Chief Executive Officer
<PAGE>
September 18, 1996
To Whom It May Concern:
Colette was hired by Metra in September 1994 as Vice President of Marketing
and Clinical Affairs. Her extensive experience in pharmaceutical marketing
was attractive to us as we set about introducing a new diagnostic marker
which complements hormone replacement therapy products.
While somewhat unusual to include marketing, Colette was invited to join
Metra's road show team when the Company sought its initial public offering
in June 1995. She proved to be a good presenter and was able to effectively
respond to investor questions. She continued to be a regular marketing
contact with Metra's investment community.
Colette assumed responsibility for the Americas Sales function in January
1996, relinquishing Clinical Affairs at that time.
Colette is dynamic, competitive and has a high energy level. Colette is a
strong strategic planner. She has been innovative in developing our launch
plans. Her confidence and best efforts show when she is in the medical
education role where she utilizes the strongest components of her technical,
marketing and sales experiences and strengths.
Colette will certainly make a dynamic and visible contribution to any
employer.
Sincerely,
/s/ George Dunbar
George Dunbar
President and CEO
<PAGE>
September 18, 1996
To whom it may concern:
Over the past two years, I have worked with Colette Andrea in her initial
role as Metra's Vice President of Marketing and Clinical Affairs and later as
Vice President Marketing and U.S. Sales.
Colette brought a great deal of experience in pharmaceutical marketing to
Metra. She exhibits a high degree of professionalism, a toughness in the face
of difficult circumstances, and an intense desire to succeed. Colette pursued
a tireless path including a rigorous travel schedule to help create market
awareness for Metra's novel biochemical markers.
Colette took personal time to develop mentoring relationships with two
employees within my group.
Colette will surely bring these same strengths to another employer.
Sincerely,
/s/ Ronald T. Steckel
Ronald T. Steckel
Senior Vice President
