Exhibit
10.2


 


January 11,
2008


 


Alan Fuhrman


c/o Sonus Pharmaceuticals, Inc.


1522 217th
PL S.E., Suite 100


Bothell, Washington 98021


 


Re: Severance/Change in Control Agreement


 


Dear Alan:


 


In consideration of your
employment with Sonus Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
you and the Company entered into a Change in Control Agreement dated September 15,
2004 (the “Prior Agreement”). For good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, you and the Company desire to
amend and restate the Prior Agreement as set forth herein. Accordingly, this
new Severance/Change in Control Agreement (the “Agreement”) amends and restates
the Prior Agreement and sets forth the compensation and benefits you will be
entitled to receive in the event your employment terminates under any of the
circumstances outlined in Section 1 below. This Agreement takes effect on
the date set forth above.


 


1.            TERMINATION OF EMPLOYMENT.


 


1.1           You will be entitled to the
compensation and benefits outlined in Section 2 of this Agreement in the
event that:


 


(A)          Your employment ends due to
either (1) a termination for Good Reason, or (2) a termination for
reasons other than Cause, Disability, or your death, regardless of whether any
termination under (1) and (2) above occurs before, after, or in
connection with any Change in Control; and


 


(B)           You execute a release of all
claims, known and unknown, against the Company; and


 


(C)          You otherwise fulfill your
obligations under this Agreement.


 


1.2           For purposes of this Agreement, the term “Change in
Control” shall mean (i) a sale of fifty percent (50%) or more of the
outstanding shares of common stock of the Company; (ii) a sale of all or
substantially all of the assets of the Company, or (iii) a merger,
consolidation or reorganization whereby the stockholders of the Company
immediately prior to the consummation of such merger, consolidation or
reorganization own less than fifty percent (50%) of the outstanding shares of


 

















 


common stock immediately following the consummation of the merger,
consolidation or reorganization.


 


1.3          For purposes of this
Agreement, the term “Good Reason” shall mean any of the following, if done
without your consent:


 


1.3.1.       A substantial diminution in
your duties and responsibilities to a level substantially beneath that of your
duties and responsibilities as Senior Vice President, Chief Financial Officer
other than actions that are not taken in bad faith and are remedied by the
Company within thirty days after written notice by you;


 


1.3.2.       A reduction by the Company
in your current annual base salary unless such reduction is attributable to an
across the board salary reduction for all of management personnel of the
Company and then only if the percentage of your reduction is (i) not
greater than 10%, and (ii) no greater than that of the other management
personnel;


 


1.3.3.       The Company requires the
relocation of your base of employment outside the Seattle, Washington
metropolitan area;


 


1.3.4.       A material breach by the
Company of any of the terms and provisions of this Agreement, which is not
cured within 30 days of written notice by you of such breach; or


 


1.3.5.       the failure of the Company
to obtain a satisfactory agreement from any successor in a Change of Control to
assume and agree to perform this Agreement, as contemplated in Section 6
hereof.


 


1.4          For purposes of this
Agreement, the term “Cause” shall mean any of the following: (i) your
willful and continued failure or refusal to perform your duties with the
Company; (b) your willfully engaging in gross misconduct injurious to the
Company; (c) your being convicted or pleading guilty or nolo contendere to any misdemeanor
involving moral turpitude or to any felony; (d) your having materially
breached any provision of this Agreement, or any agreement concerning
confidentiality or ownership of inventions with the Company and failed to cure
such breach to the reasonable satisfaction of the Company within thirty (30)
days following written notice of breach, if such cure is possible.


 


1.5          For purposes of this
Agreement, the term “Disability” shall mean your inability to perform the
essential functions of your position due to any physical or mental illness even
with reasonable accommodation to the extent required by law, for any period of
six months in the aggregate during any twelve months, provided the Company has
given you a written demand to return to your full-time duties.


 


1.6          Any termination of
employment by you or by the Company pursuant to this Agreement shall be
communicated by written Notice of Termination indicating the specific
termination provision in this Agreement relied upon, if any. For purposes of
this Agreement, the “Date of Termination” shall mean the date specified in the
Notice of Termination which shall not be earlier than ten (10) business
days after the date on the Notice of Termination is given and, if


 


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applicable, the expiration of the period to cure a
breach as provided in Section 1.4(d) of this Agreement.


 


2.             COMPENSATION UPON TERMINATION.


 


2.1.          Immediately upon your
termination, the Company shall pay you (A) your base salary unpaid through
the Date of Termination at the rate in effect as of the time of Notice of
Termination, and (B) an amount equal to the value as of the Date of
Termination of the deferred portion of any bonus which has been declared but is
unpaid under any incentive compensation plan or program of the Company then in
effect.


 


In addition, if your
employment is terminated pursuant to Section 1 of this Agreement, after
your execution of a release of all claims, known and unknown, against the
Company, you shall also receive the compensation and benefits set forth below.


 


2.1.1.      The Company shall pay to you as severance, paid out
either as salary continuation or in a lump sum, whichever you prefer, within
ten days following the date of execution of the above-referenced release, an
amount equal to your highest annual base salary in effect any time during the
twelve (12) month period prior to the Date of Termination.


 


2.1.2       You will also be offered group health insurance
continuation coverage available under “COBRA.” If you timely elect continuation
coverage under COBRA, the Company will pay the required insurance premiums for
you and for any of your dependents who are insured on your Date of Termination
and remain eligible for continuation coverage under COBRA for the first twelve
(12) months of your COBRA coverage continuation period, or, if sooner, until
you are employed in a full time capacity by another employer.


 


2.1.3.      The Company shall maintain
in full force and effect, for the continued benefit of you for one year after
the Date of Termination, or, if sooner, until you are employed in a full time
capacity by another employer, all non-cash health and welfare plans and
programs (excluding 401(k) or any employee bonus plans and programs or
retirement plans or programs) in which you participated immediately prior to
the Date of Termination provided that your continued participation is permissible
under the general terms and provisions of such plans and programs.


 


In the event that your
participation in any such plan or program is barred, the Company shall arrange
to provide you with benefits substantially similar to those which you are
entitled to receive under such plans and programs at no cost to you. At the end
of the period of coverage, you shall have the option to have assigned to you at
no cost and with no apportionment of prepaid premiums, any assignable insurance
policy owned by the Company and relating specifically to you.


 


2.2.          The respective obligations
of, and benefits afforded to, the Company and you as provided in this Agreement
shall survive a Change of Control.


 


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2.4          To the extent that any or all of the payments and
benefits provided for in this Agreement constitute “parachute payments” within
the meaning of Section 280G of the Internal Revenue Code (the “Code”) and,
but for this Section 2.4 would be subject to the excise tax imposed by Section 4999
of the Code, the aggregate amount of such payments and benefits shall be
reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive’s “base amount”
(as defined in the Code). The determination of any reduction of any payment or
benefits under Section 2 pursuant to the foregoing provision shall be made
by a nationally recognized public accounting firm chosen by the Company in good
faith, and such determination shall be conclusive and binding on the Company
and you.


 


3.             OTHER BENEFITS.


 


In the event you are
entitled to any compensation or benefits under this Agreement, you shall not be
entitled to any other severance compensation or benefits under any other policy
or agreement with the Company.


 


4.             PROPRIETARY INFORMATION AND UNFAIR
COMPETITION.


 


4.1           You acknowledge that in the
course of your employment with the Company, you will be entrusted with access
to extensive confidential information of the Company concerning its products
and service, methods of manufacture, research and development, know-how,
patents, copyrights, trademarks, and other proprietary data, as well as the
identity, needs, and preferences of its customers and prospects, all of which
the Company considers its legally protected trade secrets and intellectual
property. You further acknowledge the highly competitive nature of the business
of the Company, and the fact that unauthorized disclosure or use of such trade
secrets and intellectual property would be inevitable if you were to compete
with the Company or solicit competing business from its prospects and
customers. You therefore agree as follows:


 


4.2           Commencing on the Date of Termination, and ending
one year thereafter (the “Non-Compete Period”), you will not provide goods or
services to or become an employee, owner (except for passive investments of not
more than three percent of the outstanding shares of, or any other equity
interest in, any company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market), officer, agent,
consultant, advisor or director of any firm or person in any geographic area
which competes with the “Business”. For purposes of this Agreement, the term “Business”
shall mean the specific business conducted by the Company on the Date of
Termination. As of the date of this Agreement, the “Business” of the Company
consists of the research, design, development, manufacture, sale or
distribution of Vitamin E emulsion-based drug delivery products.


 


4.3           During the Non-Compete Period, you will not directly
or indirectly induce any employee of the Company or any of its affiliates to
engage in any activity in which you are prohibited from engaging by paragraph
4.2 above, or to terminate such employee’s employment with the Company, or any
of its affiliates, and will not directly or indirectly employ or offer
employment to any person who was employed by the Company or any of its
affiliates unless such person shall cease to be employed by the Company or any
of its affiliates for a period of at least 12 months; provided, however, that
this provision shall not apply to any person who is no longer an employee of
the Company or any of its affiliates as of a result of actions taken by the
Company or its affiliates.


 


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4.4          During the Non-Compete
Period, you will refrain from making any statement which has the effect of
demeaning the name or the business reputation of the Company or its
subsidiaries or affiliates, or any officer or employee thereof, or which
materially adversely effects the best interests (economic or otherwise) of the
Company, its subsidiaries or affiliates.


 


4.5          It is expressly understood and agreed that although
you and the Company consider the restrictions contained in this Section 4
to be reasonable, if a final judicial determination is made by a court of
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against you, provisions of this
Agreement shall not be rendered void, but shall be deemed amended to apply to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not effect the enforceability of any of
the other restriction contained herein.


 


5.             MISCELLANEOUS.


 


Any payment required under
this Agreement shall be subject to all requirements of the law with regard to
withholding, filing, making of reports and the like, and the Company shall use
its commercially reasonable best efforts to satisfy promptly all such
requirements. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by both parties. The validity, interpretation, construction and
performance of this Agreement shall be governed by the law of the State of
Delaware.


 


6.             SUCCESSORS AND ASSIGNMENT.


 


This agreement and all of your rights
thereunder shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. Except as expressly provided in this Agreement, this
Agreement is personal to you and may not be assigned to you. If you should die
while any amounts would still be payable to you hereunder if you had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to your devisee, legatee, or other
designee or, if there be no such designee, to your estate. This Agreement shall
be binding upon any successor to the Company (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company.


 


7.             TERM OF AGREEMENT.


 


This Agreement shall
commence as of the date of this Agreement and shall terminate on the earliest
of (i) the termination of your employment by the Company for Cause,
Disability or death; (ii) your termination of employment other than for
Good Reason or (iii) your reaching age 65.


 


8.             NO GUARANTEE OF CONTINUED EMPLOYMENT.


 


This Agreement is intended solely to provide you with certain
compensation and benefits in the event your employment terminates in the
circumstances described in Section 1. Nothing in this Agreement
constitutes or implies any specific term of employment. You acknowledge and
agree that


 


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your employment with the Company can be terminated
by you or the Company at any time with or without cause or prior warning.
Nothing in this Agreement limits or supersedes any other agreements between you
and the Company concerning confidentiality or ownership of intellectual
property.


 


9.             MEDIATION


 


In the event that the Company terminates you for
Cause and you dispute its right to do so or you claim that you are entitled to
terminate your employment for Good Reason and the Company disputes your right
to do so, a mediator acceptable to you and the Company will be appointed within
ten (10) days to assist in reaching a mutually satisfactory resolution but
will have no authority to issue a binding decision. Such mediation must be
concluded within 60 days of the date of termination or claim to termination.
Should such mediation fail to reach an acceptable conclusion and you are
successful in any litigation or settlement that issues from such dispute, you
shall be entitled to receive from the Company all of the expenses incurred by
you in connection with any such dispute including reasonable attorney’s fees.


 


If this Agreement is
acceptable to you, kindly sign and return to the Company the enclosed copy of
this letter.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SONUS
  Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Michael A. Martino

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Michael
  A. Martino

  
	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
  AGREED
  AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  /s/ Alan Fuhrman

  	
   

  	
   

  
	
  Alan
  Fuhrman

  	
   

  
	
  Dated:

  	
  11-Jan-08

  	
   

  	
   

  
						



 


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