Exhibit 10.20
 
TRANSITION AND RELEASE AGREEMENT
 
RECITALS
 
This Transition and Release (“Agreement”) is made by and between William H.
Lawrenson, (“Employee”) and Natus Medical Inc. (“Company”) (collectively
referred to as the “Parties”):
 
WHEREAS, Employee is an employee and officer of the Company;
 
WHEREAS, the Company and Employee entered into a Employment, Confidential
Information and Invention Assignment Agreement (the “Confidentiality Agreement”)
and an Indemnity Agreement, and;
 
WHEREAS, the Employee has resigned his employment with Company effective August
31, 2002 (the “Termination Date”)
 
WHEREAS, the Company and Employee have entered into a stock option agreements
dated December 17, 1997, October 23, 1998, May 5, 1999, July 6, 1999, May 9,
2000 and April 20, 2001 granting me the option to purchase 129,803 total shares
of the Company’s common stock subject to the terms and conditions of the
Company’s 1991 and 2000 Stock Option Plans and the Stock Option Agreement (the
“Stock Agreements”):
 
WHEREAS, the Parties, and each of them, wish to resolve any and all disputes,
claims, complaints, grievances, charges, actions, petitions and demands that the
Employee may have against the Company as defined herein, including, but not
limited to, any and all claims arising or in any way related to Employee’s
employment with, or separation from, the Company;
 
1    Resignation and Transition
 
Employee hereby tenders his resignation as Chief Financial Officer of Natus
Medical Inc. (the Company) effective August 31, 2002 (the Termination Date),
under the terms and conditions in this agreement.
 
Upon execution of this agreement, the transition period (the Transition Period)
shall commence, which will terminate August 31, 2002.
 
Employee will remain as Chief Financial Officer of the Company for as long as
the Company deems fit, but in no event after the Termination Date. The Company
will inform Employee of the date on which it wishes Employee to step down as
CFO, at its convenience, at which time and in exchange for consideration
detailed hereunder, including continuation of salary and benefits through the
Termination Date, the Employee will resign as the Chief Financial Officer, and
as a Director of Company’s Subsidiaries, (collectively “CFO”).
 
If Employee ceases to serve as CFO prior to the Termination Date, it will not
terminate the Employee’s employment during the Transition Period, but such
resignation as CFO will terminate his status as an officer and manager of the
Company. During the Transition Period and subsequent to resigning as CFO,
Employee will no longer be an officer within the Company, and will become a
regular staff employee reporting to the President of the Company or to the
President’s designee.

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Employee will devote 100% of his time to the Company during April and May 2002;
thereafter during June and July 2002 Employee will devote 60% (nominally three
days per five day week) of his time to the Company; during August 2002 until the
Termination Date, Employee shall be given a leave of absence and shall not be
required to attend the Company.
 
During the Transition Period, the Company may hold Employee on either active or
paid leave of absence status, as the Company may, at its option, determine and
inform Employee by written notice. If Employee is on active status during the
Transition Period, Employee will perform his duties as CFO, including, but not
limited to:
 

 
•
 
Assist the Company in finding and hiring a replacement Chief Financial Officer
(hereinafter New CFO),

 

 
•
 
Acquaint the New CFO with the systems and operation of the Finance and
Administrative Departments,

 

 
•
 
Assist in the transition of staff to New CFO,

 

 
•
 
Introduce New CFO to the investment community and provide New CFO with contact
lists,

 

 
•
 
Assist in the completion of the BaaN V implementation,

 

 
•
 
When requested to do so by the Company, promptly resign as Chief Financial
Officer of the Company and as Director of its subsidiaries, and

 

 
•
 
Perform other reasonable mutually agreeable tasks associated with the
transition.

 
During the Transition Period and through and until the Termination Date, on each
regularly scheduled pay day, Company will pay Employee his current full-time
(100%) salary and benefits and reimburse Employee actual and reasonable travel
costs associated with approved travel on behalf of the Company.
 
On the Termination Date, the Company will pay Employee the remainder of his
regular monthly salary for August 2002 calculated from the end of the previous
pay period through August 31, as well as any and all accrued vacation and other
amounts normally due terminating employees, and make available to Employee those
continuation benefits, such as normal COBRA benefits, and any other benefits as
are normally offered other employees at the time of their termination.
Employee’s health insurance benefits will cease at the end of the month which
contains the Termination Date, subject to Employee’s right to continue his
health insurance under COBRA. Employee’s participation in all other benefits and
incidents of employment will cease on the Termination Date. Employee will cease
accruing employee benefits as of the Termination Date, except as otherwise
specified herein, including, but not limited to, vacation time and paid time
off.
 
In the event that the BaaN IV system has been successfully migrated to the BaaN
V system by not later than the Termination Date, the company shall accelerate
the vesting of approximately 15,000 unvested options to purchase shares
associated with Employee’s option dated May 9, 2000. The exercise of the options
shall continue to be subject to the applicable stock option agreements.
 
Employee shall be permitted to retain possession of his Company-provided laptop
computer (or reasonable substitute/replacement thereof), provided that all
Company information or data shall be removed therefrom.
 
Release of Claims
 
Employee agrees that the foregoing consideration represents settlement in full
of all outstanding obligations owed to Employee by the Company and its officers,
managers, supervisors, agents. Employee on his own behalf, and on behalf of his
respective heirs, family members, executors, agents, and assigns, hereby fully
and forever releases the Company and its officers, directors, employees, agents,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor

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and successor corporations, and assigns, from, and agrees not to sue concerning,
any claim, duty, obligation or cause of action relating to any matters of any
kind, whether presently known or unknown, suspected or unsuspected, that
Employee may possess arising from any omissions, acts or facts that have
occurred up until and including the effective Date of this Agreement including,
without limitation:
 

 
•
 
any and all claims relating to or arising from Employee’s employment
relationship with the Company and the termination of that relationship;

 

 
•
 
any and all claims relating to, or arising from, Employee’s right to purchase,
or actual purchase of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of fiduciary duty,
breach of duty under applicable state corporate law, and securities fraud under
any state or federal law;

 

 
•
 
any and all claims under the law of any jurisdiction including, but not limited
to, wrongful discharge of employment; constructive discharge from employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;

 

 
•
 
any and all claims for violation of any federal, state or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, Older Workers Benefit Protection Act; the
California Fair Employment and Housing Act, and the California Labor Code;

 

 
•
 
any and all claims for violation of the federal, or any state, constitution;

 

 
•
 
any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

 

 
•
 
any claim for any loss, cost, damage, or expense arising out of any dispute over
the non-withholding or other tax treatment of any of the proceeds received by
Employee as a result of this Agreement; and

 

 
•
 
any and all claims for attorneys’ fees and costs.

 
The Company and Employee agree that the release set forth in this section shall
be and remain in effect in all respects as a complete general release as to the
matters released. The Parties agree that this Agreement severs all relationships
between them and shall act as a mutual release of all claims of any nature which
one party may have against the other party as of the Effective Date, except that
the following claims shall not be released hereby: (i) claims by either party
against the other under or pursuant to this Agreement, (ii) claims under
applicable law in respect of statutory employment rights (such as COBRA or ERISA
claims), and (iii) claims or rights of Employee under law or Company’s
certificate of incorporation and bylaws as to indemnification against third
party claims arising with respect to his service as an officer and director of
Company prior to the effective date.
 
Employee acknowledges and agrees that any breach of any provision of this
Agreement shall constitute a material breach of this Agreement and shall entitle
the Company immediately to recover the termination benefits provided to Employee
under this Agreement.
 
Employee shall continue to maintain the confidentiality of all confidential and
proprietary information of the Company and shall continue to comply with the
terms and conditions of the Confidentiality Agreement between Employee

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and the Company. Employee shall return all of the Company’s property and
confidential and proprietary information in his possession to the Company on the
Termination Date.
 
Employee acknowledges that he/she is waiving and releasing any rights he/she may
have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that
this waiver and release is knowing and voluntary. Employee and the Company agree
that this waiver and release does not apply to any rights or claims that may
arise under ADEA after the Effective Date of this Agreement. Employee
acknowledges that the consideration given for this waiver and release Agreement
is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he/she has been advised by this writing that:
 

 
•
 
he should consult with an attorney prior to executing this Agreement;

 

 
•
 
he has up to twenty-one (21) days within which to consider this Agreement;

 

 
•
 
he has seven (7) days following his execution of this Agreement to revoke the
Agreement;

 

 
•
 
this ADEA waiver shall not be effective until the revocation period has expired;
and

 

 
•
 
nothing in this Agreement prevents or precludes Employee from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs for doing
so, unless specifically authorized by federal law.

 
Civil Code Section 1542.    The Parties represent that they are not aware of any
claim by either of them other than the claims that are released by this
Agreement. I acknowledges that he has been advised by legal counsel and is
familiar with the provisions of California Civil Code Section 1542, 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.
 
Employee, being aware of said code section, agrees to expressly waive any rights
he may have thereunder, as well as under any other statute or common law
principles of similar effect.
 
Employee represents that he has no lawsuits, claims, or actions pending in his
name, or on behalf of any other person or entity, against the Company or any
other person or entity referred to herein. Employee also represents that he does
not intend to bring any claims on his own behalf or on behalf of any other
person or entity against the Company or any other person or entity referred to
herein.
 
Employee understands and agrees that, as a condition of this Agreement, he shall
not be entitled to any employment with the Company, its subsidiaries, or any
successor, and he hereby waives any right, or alleged right, of employment or
re-employment with the Company, its subsidiaries or related companies, or any
successor.
 
The Parties acknowledge that Employee’s agreement to keep the terms and
conditions of this Agreement confidential was a material factor on which all
parties relied in entering into this agreement. Employee hereto agrees to use
his best efforts to maintain in confidence: (1) the existence of this Agreement,
(ii) the contents and terms of this Agreement, (iii) the consideration for this
Agreement, and 9iv) any allegations relating to the company or its officers or
employees with respect to employee’s employment with the Company, except as
otherwise provided for in this Agreement (hereinafter collectively referred to
as “Settlement Information”). Employee agrees to take every reasonable
precaution to prevent disclosure of any Settlement Information to third parties,
and agrees that there will be no publicity, directly or indirectly, concerning
any Settlement Information. Employee agrees to take every precaution to disclose
Settlement Information only to those attorneys, accountants, governmental
entities and family members who have a reasonable need to know of such
Settlement Information. The Parties agree that if Company proves that Employee
breached this Confidentiality provision, it

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shall be entitled to an award of is costs spent enforcing this provision,
including all reasonable attorney’ fees associated with the enforcement action,
without regard to whether the company can establish actual damages from the
breach by Employee.
 
Employee agrees he will not act in any manner that might damage the business of
the Company. Employee agrees that he will not counsel or assist any attorneys or
their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the
Company and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company, unless under a subpoena or other court
order to do so. Employee further agrees both to immediately notify the Company
upon receipt of any court order, subpoena, or any legal discovery device that
seeks or might require the disclosure or production of the existence or terms of
this Agreement, and to furnish, within three (3) business days of its receipt, a
copy of such subpoena or legal discovery device to the Company.
 
Employee and Company agrees to refrain from any defamation, libel or slander of
the Company or tortious interference with the contracts and relationships of the
Company or Employee. All inquiries by potential future employers of Employee
will be directed to Human Resources. Upon inquiry, the Company shall only state
the following: Employee’s last position and dates of employment.
 
Employee agrees that for a period of twelve (12) months immediately following
the Effective Date of this Agreement, Employee shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees
to leave their employment, or take away such Is, or attempt to solicit, induce,
recruit, encourage, take away or hire employees of the Company, either for
him/herself or any other person or entity.
 
The Parties understand and acknowledge that this Agreement constitutes a
compromise and settlement of disputed claims. No action taken by the Parties
hereto, or either of them, either previously or in connection with this
Agreement shall be deemed or construed to be: (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or admission by
either party of any fault or liability whatsoever to the other party or to any
third party.
 
Employee represents that he has no knowledge of any wrongdoing involving
improper or false claims against a federal or state governmental agency, or any
other wrongdoing that involves Employee or other present or former Company
employees.
 
The Parties shall each bear their own costs, expert fees, attorneys’ fees and
other fees incurred in connection with this Agreement.
 
Employee agreed to indemnify and hold harmless the Company from and against any
and all loss, costs, damages or expenses, including, without limitation,
attorneys’ fees or expenses incurred by the Company arising out of the breach of
this Agreement by Employee, or from any false representation made herein by
Employee, or from any action or proceeding which may be commenced, prosecuted or
threatened by Employee or for Employee’s benefit, upon Employee’s initiative, or
with Employee’s aid or approval, contrary to the provisions of this Agreement.
Employee further agrees that in any such action or proceeding, this Agreement
may be pled by the Company as a complete defense, or may be asserted by way of
counterclaim or cross-claim.
 
The Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released, shall
be subject to binding arbitration in San Mateo County before the American
Arbitration Association under its National Rules for the Resolution of
Employment Disputes or the California Code of Civil Procedure. The Parties agree
that the prevailing party in any arbitration shall be entitled to injunctive
relief in any court of competent jurisdiction to enforce the arbitration award.
The Parties agree that the prevailing party in any arbitration shall be awarded
its reasonable attorneys’ fees and costs. The parties hereby agree to waive
their right to have any dispute between them resolved in a court of law by a
judge or jury. This section will not prevent either party from seeking
injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute relating
to its obligations under this Agreement and the agreements incorporated herein
by reference.

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The Company represents and warrants that the undersigned has the authority to
act on behalf of the Company and to bind the Company and all who may claim
through it to the terms and conditions of this Agreement. Employee represents
and warrants that he has the capacity to act on his own behalf and on behalf of
all who might claim through him/her to bind them to the terms and conditions of
this Agreement. Each party warrants and represents that there are no liens or
claims of lien or assignments in law or equity or otherwise of or against any of
the claims or causes of action released herein.
 
Each party represents that it has had the opportunity to consult with an
attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Neither party has relied upon any representations
or statements made by the other party hereto which are not specifically set
forth in this Agreement.
 
In the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision so long as the
remaining provisions remain intelligible and continue to reflect the original
intent of the Parties.
 
This Agreement represents the entire agreement and understanding between the
Company and I concerning the subject matter of this Agreement and Employee’s
relationship with the Company, and supersedes and replaces any and all prior
agreements and understandings between the Parties concerning the subject matter
of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement, Indemnity and applicable Stock
Agreements.
 
The failure of any party to insist upon the performance of any of the terms and
conditions in this Agreement, or the failure to prosecute any breach of any of
the terms and conditions of this Agreement, shall not be construed thereafter as
a waiver of any such terms or conditions. This entire Agreement shall remain in
full force and effect as if no such forbearance or failure of performance had
occurred.
 
Any modification or amendment of this Agreement, or additional obligation
assumed by either party in connection with this Agreement, shall be effective
only if placed in writing and signed by both Parties or by authorized
representatives of each party.
 
This Agreement shall be deemed to have been executed and delivered within the
State of California, and it shall be construed, interpreted, governed, and
enforced in accordance with the laws of the State of California, without regard
to choice of law principles.
 
This Agreement is effective after it has been signed by both parties and after
eight (8) days have passed since Employee has signed the Agreement (the
“Effective Date”), unless revoked by I within seven (7) days after the date the
Agreement was signed by Employee.
 
This Agreement may be executed in counterparts, and each counterpart shall have
the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.
 
Voluntary Execution of Agreement.    This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. The Parties acknowledge
that:
 
They have read this Agreement;
 
b.  They have been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of their own choice or that they have
voluntarily declined to seek such counsel;
 
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c.  They understand the terms and consequences of this Agreement and of the
releases it contains; and
 
d.  They are fully aware of the legal and binding effect of this Agreement.
 
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
 
Natus Medical Inc.
       
Dated:
 
April 26, 2002    

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By:
 
/s/    TIM C. JOHNSON

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Tim C. Johnson
Chief Executive Officer

 
William H. Lawrenson, an individual
 
       
Dated:
 
April 26, 2002    

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By:
 
/s/    WILLIAM H. LAWRENSON

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William H Lawrenson

 
 
 
End of agreement

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