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SEVERANCE AGREEMENT AND GENERAL RELEASE
This SEVERANCE AGREEMENT AND GENERAL RELEASE (the "Agreement") is made
and entered into on this 21st day of January, 2000, by and between PARADIGM
MEDICAL INDUSTRIES, INC. ("PARADIGM") and MICHAEL W. STELZER ("STELZER").
RECITALS:
WHEREAS, STELZER has been employed by, and has served as an officer of
PARADIGM; and
WHEREAS, the parties mutually desire to end this relationship effective
January 21, 2000, and now desire to resolve all issues amicably on the terms set
forth below; and
WHEREAS, STELZER has served as a Director of PARADIGM and desires to
resign from its Board of Directors.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations herein contained, the parties agree as follows:
1. Stelzer Resignation. STELZER shall provide PARADIGM with a letter of
resignation in the form attached hereto as Exhibit "A".
2. Severance Benefits. STELZER will receive 20,000 shares of restricted
common stock of PARADIGM (the "Shares") within seven business days of the
date of this Agreement. PARADIGM shall register the Shares within 90 days
after such date. If for any reason the Shares are not so registered,
STELZER at his option may exchange the Shares for shares of common stock
that have been registered in the January 6, 2000 Prospectus. STELZER will
enter into a lock up agreement with PARADIGM in which he will agree not
to sell the Shares for a period of 90 days following the date of this
Agreement. With respect to the PARADIGM stock options STELZER presently
holds, he may exercise such options at any time between the date of this
Agreement and 18 months following such date. PARADIGM will continue to
pay STELZER his base salary through April 21, 2000. STELZER's 401(k)
benefits that would have accrued as of the date of this Agreement will be
deemed vested. The Board of Directors of PARADIGM shall provide STELZER
with a letter of reference in the form attached hereto as Exhibit "B".
3. Cooperation in Transition. STELZER will provide all passwords, codes,
information, documents, tangible items or other materials arising from or
relating to his employment with or affiliation with PARADIGM and he will
make himself reasonably available for consultation, training and other
services needed in making a successful transition of his former
responsibilities to his successor(s).
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4. Mutual Release. In consideration of the benefits provided in this
Agreement, the parties release, hold harmless and forever discharge each
other, any and all other subsidiary or affiliate companies, their
successors, assigns, transferees, past or present officers, employees,
directors, representatives, agents, partners, owners and shareholders, of
and from any and all actions, claims, causes of action, suits,
compensation, wages, benefits, debts, contracts, controversies,
agreements, promises, rights, damages or demands which they have, may
have or ever will have, whether known or unknown, suspected or
unsuspected, ;including but not limited to any claim under state or
federal statutory or common law, any claim arising out of or in
connection with STELZER's employment or affiliation with PARADIGM or the
termination thereof, and any claim based on an express or implied
contract including but not limited to STELZER's Employment Agreement
dated September 14, 1998 and his Change of Control Termination Agreement
dated September 14, 1998.
The parties expressly waive the benefits of any rule or law that
provides, in sum or substance, that a release does not extend to claims
which the party does not know or suspect to exist in his favor at the
time of executing the release, which if known by him would have
materially affected this settlement with the other party. The parties
understand and acknowledge that all such claims are hereby waived and
released.
5. Release of Age Discrimination Claims. STELZER acknowledges and
understands that he is releasing any and all claims or causes of action
he has or may have under state and federal law concerning age
discrimination, including but not limited to, the Age Discrimination in
Employment Act of 1967, 29 U.S.C. Section 621 et seq. He further
acknowledges that he has been advised that this release does not apply to
any age-based rights or claims arising after the date of this Agreement,
that he should seek the advice of his own independent attorney, that he
has been given 21 days in which to review and consider this Agreement and
that he has been advised that he has an additional 7 days after he signs
this Agreement to change his mind and rescind this Section (5) and
release of age discrimination claims without any penalty to himself. This
Section (5) of the Agreement will not become effective or enforceable
until after this 7 day period has expired. The parties agree that one
month of the salary continuation provided in Section (2) above is
allocated to STELZER's release of age-based claims. In the event STELZER
exercises his right of rescission of this Section (5), the salary
continuation will end on March 21, 2000. All other provisions of this
Agreement will remain in full force and effect.
6. Confidentiality, Inventions and Non-Compete Agreement. STELZER agrees
that the Confidentiality, Inventions and Non-Compete provisions (Sections
6-9) of his Employment Agreement dated September 14, 1998 remain in full
force according to their terms and he agrees to abide by and comply with
these provisions.
7. Confidentiality and Non-Assistance in Claims. STELZER agrees that he will
keep strictly confidential all information pertaining to the
negotiations, conditions and terms of this Agreement and will not
directly or indirectly publicize or disclose them in writing or orally,
and whether by himself or any agent, representative or other person.
Notwithstanding the foregoing, he may discuss this Agreement with his
attorneys, accountants or members of his immediate family provided he
obtains their agreement to keep its terms confidential and he remains
responsible for any disclosure they may make.
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STELZER also agrees that he will not encourage, recommend, participate in
or voluntarily assist in any legal or administrative claim against
PARADIGM or its employees, directors, officers, representatives or
affiliated companies and will not attempt to harm their reputations or
speak or write about them in a disparaging manner. Notwithstanding the
foregoing, STELZER may testify or disclose information if subpoenaed,
required by law or in the course of an official agency investigation.
PARADIGM will not attempt to harm STELZER's reputation or speak or write
about him in a disparaging manner.
8. No admission of Liability. By entering into this Agreement, PARADIGM does
not in any way admit or acknowledge liability for any allegation or claim
by STELZER and it specifically denies any such liability. The parties
agree that nothing contained in this Agreement shall be treated or
construed as a admission of liability or wrongdoing of any kind by
PARADIGM, its predecessors, successors, affiliates, agents, officers,
directors, representatives and employees.
9. Ownership of Claims and No Liens. STELZER represents that he ha not
transferred, assigned or encumbered any claim or portion thereof against
PARADIGM, its officers, directors, employees or agents. STELZER further
represents and warrants that there are no liens against the severance
benefits provided under this Agreement.
10. Disputes. In the event any dispute arises between the parties which in
any way relates to this Agreement, and which dispute cannot be resolved
amicably, the parties agree that such dispute shall be resolved in Salt
Lake city, Utah through binding arbitration in accordance with the rules
and procedures of the American Arbitration Association., Further, the
substantially prevailing party shall receive reasonable attorney's fees
and costs.
11. Severability. In the event any part of this Agreement is determined to be
void or unenforceable, the parties agree that the remainder of the
Agreement may be enforced to the fullest extent permitted by law.
12. Complete Agreement. This Agreement sets forth the terms and conditions of
an amicable resolution in full accord and satisfaction of all issues,
claims or controversies between STELZER and PARADIGM. This Agreement sets
forth the complete agreement between the parties. No other promises,
commitments or representations have been made or relied on by the
parties, and no other consideration is due between the parties.
In witness whereof, the parties acknowledge, by their signatures below,
that they have read and understand the terms of this Agreement and are freely
and voluntarily entering into it.
MICHAEL W. STELZER PARADIGM MEDICAL
INDUSTRIES, INC.
/s/ Michael W. Stelzer By: /s/ Thomas F. Motter
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Date signed: January 28, 1999 Its: CFO
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