Innovex, Inc.












	December 6, 2002	Exhibit 10.1






	


Mr. Allan Chan 



This letter describes your agreement
with Innovex, Inc. (“Innovex”) regarding your termination as Senior Vice
President, General Manager, Consumer Electronics Division of Innovex effective December
31, 2002 and your continued role as an Advisor through December 31, 2004. Although not
obligated to do so, Innovex is offering to provide you with the following benefits in
exchange for your agreement to the terms and conditions set forth below. 



Base Salary Compensation 



In consideration of this Agreement
and your continued role as an Advisor, you will receive severance compensation equal to
twelve (12) months of your current base salary. This severance shall be paid in equal
bi-weekly installments during the period January 1, 2003 through December 31, 2003.
Subject to applicable withholding taxes, this shall begin to be paid to you after the
expiration of the 15 day rescissionary period described below. You acknowledge and agree
that this severance payment supercedes and replaces the lump sum payment identified and
described in paragraph 3 of your October 1, 1995 Employment Agreement (“Employment
Agreement”) and that you are no longer entitled to that lump sum payment. Effective
January 1, 2004 through December 31, 2004,you shall be paid compensation equal to 15% of
12 months of your current base salary (less applicable withholdings) over this period of
twelve (12) months in equal bi-weekly installments. 



Health and Dental Benefits 



Upon your termination as Senior Vice
President, General Manager, Consumer Electronics Division of Innovex, on December 31,
2002, you shall receive a COBRA notification entitling you to elect continued health and
dental benefits coverage for an additional eighteen (18) months. Should you elect to
continue coverage under COBRA, Innovex agrees to pay the premiums for such continued
coverage for eighteen (18) months or until you receive similar benefits from a new
employer. Should you not obtain similar benefits before the expiration of the eighteen
(18) month period, Innovex agrees to continue providing you a monthly amount equivalent to
the monthly premiums it paid during the COBRA period that you can put towards obtaining
health and dental benefits. Innovex’s obligation to provide you this continued
monthly amount upon expiration of the COBRA period shall cease as of December 31, 2004 or
until you receive similar benefits from a new employer, whichever comes first. 



Stock Options 



In your continued role as an Advisor
to Innovex you will be treated as an employee for purposes of any applicable Innovex Stock
Option Plan. Accordingly, you shall have full stock option vesting and exercise privileges
as provided for under any applicable Innovex Stock Option Plan through December 31, 2004.
In the event of a change in control of Innovex, Inc. prior to December 31, 2004, all of
your granted options shall vest in a method identical to any officers of Innovex that have
accelerated option vesting related to a change in control. You understand and agree that
Innovex makes no representations as to any tax consequences that may or may not occur as a
result of this provision. 



Additional Benefits 



The automobile currently provided to
you shall be transferred to you at no cost effective April 6, 2003, the date of the next
insurance premium renewal. As of January 1, 2003, you shall be responsible for all
expenses related to said vehicle. Innovex, Inc. shall provide, at no cost to you, your
assigned personal computer and, through June 30, 2003, shall permit you to use the
company’s e-mail system and voicemail system. Innovex, Inc., at its expense, shall
provide you with executive level out-placement services to be chosen by Innovex. If you
desire, you shall receive a letter of recommendation on Innovex, Inc. letterhead, executed
by the Innovex, Inc. CEO detailing all areas of responsibilities assigned during your
employment. Except for those employee benefits expressly provided for herein, no other
Innovex employee benefits shall be provided to you and you shall not be eligible for or
entitled to any such benefits as of December 31, 2002. 



Death/Disability 



Neither your death nor disability
shall affect in any manner or respect Innovex’s obligations herein. In the event of
your death, the payments and other obligations of Innovex shall be paid as directed by
your estate. 






Page 14 of 20 


















	




In consideration of the benefits
outlined above, you agree to do the following: 










     	1.	
          Continuing Obligations. During the period between January 1, 2003 through
          December 31, 2004 you agree to provide advisory services from time-to-time
          related to integrating the Consumer Electronic Division into other Innovex
          divisions. Your obligations of confidentiality, assignment of inventions and
          creations, and covenant not to compete as set forth in paragraphs 5, 6, and 7 of
          your Employment Agreement (attached as Exhibit A) shall continue in full
          force and effect. Except that the non-compete provisions contained in paragraph
          7 of your Employee Agreement shall begin to run as of December 31, 2002. 


          



     	2.	
          Release. You hereby release Innovex and its affiliates, officers,
          directors, agents, shareholders, employees, attorneys, insurers, and indemnitors
          (collectively, the “Releasees”) from any and all claims and causes of
          action, known or unknown, which you may have against any and all of them to and
          through the date hereof. Through this release you extinguish all causes of
          action against the Releasees occurring up to the date of this agreement and
          through the date of performance of this agreement, subject to the full
          performance of the terms and conditions of this agreement, including but not
          limited to any contract, wage, or benefit claims, intentional infliction of
          emotional distress, defamation, or any other tort claims and all claims arising
          from any foreign, international, federal, state, or municipal law or ordinance.
          This release extinguishes any potential claims of employment discrimination
          arising from your employment with and termination from Innovex, including
          specifically any and all claims under the Minnesota Human Rights Act, the
          Americans with Disabilities Act, the Age Discrimination in Employment Act, the
          Older Workers Benefit Protection Act, and Title VII of the Civil Rights Act
          of 1964. You certify that you: (a) have not filed any claims, complaints,
          or other actions against any Releasee; and (b) are waiving any right to
          recover from Innovex under any lawsuit or charge filed by you or any federal,
          state, or local agency on your behalf based upon any event occurring up to the
          date on which you sign this agreement. Under the Age Discrimination in
          Employment Act (“ADEA”), you have 21 days to review and consider
          this offer. If you sign this letter before 21 days have elapsed from the
          date on which you first received it, then you will be voluntarily waiving your
          right to the full 21-day review period. 


          



	 	
The
offers made by Innovex to you herein shall be understood to be null and void and
automatically revoked if this letter has not been executed by you within the aforesaid
21-day period. You understand that you are not releasing your right to any claims that
may arise after you sign this agreement with respect to the nonperformance of this
agreement. You are advised by Innovex to consult your own lawyer regarding your rights
and obligations under this agreement.  






	 	
You
have the right to rescind this agreement within seven (7) days of the date upon which you
sign it in order to reinstate a claim under the ADEA, and within fifteen (15) days of
the date upon which you sign it in order to reinstate a claim under the Minnesota Human
Rights Act. You understand that if you decide to rescind this agreement, you must put the
rescission in writing and deliver it to: 






		William P. Murnane

President and CEO

Innovex, Inc.

5540 Pioneer Creek Drive

Maple Plain, MN 55359







	 	
by
hand or mail within seven (7) or fifteen (15) days of the date on which you sign it.
If you deliver the rescission by mail, it must be: (a) postmarked within seven (7) or
fifteen (15) days of the date on which you signed this agreement; (b) addressed
to William P. Murnane at the above address; and (c) sent by certified mail, return
receipt requested. 






	 	
You
understand that if you rescind this agreement, all of Innovex’s obligations to you
under this agreement will immediately cease and terminate, and Innovex will owe you no
further amounts hereunder, and any amounts which have been paid or provided to you under
this agreement, shall be immediately returned to Innovex. Innovex reserves the right to
revoke this agreement during the 21-day period required by ADEA if you take any action
during that period and before the execution of this agreement to materially decrease the
value to Innovex of the consideration we are requesting in exchange for our execution of
this agreement. Moreover, in the event you shall breach any of your continuing obligations
as set forth in this agreement, Innovex shall reserve the right to withhold any future
consideration under this agreement to be paid to you and to seek recovery of all sums
previously paid to you. Further, Innovex shall have the right to seek injunctive relief
should such relief become necessary to enforce Innovex’s rights under this agreement. 






	





Page 15 of 20 





















	3.  	Confidentiality
and Non-Disparagement. You agree that you will not disclose the terms of this Agreement
to any person or organization other than family, financial advisors or attorneys or as
may be required by law. You further agree that you shall not in any manner or respect
disparage Innovex or its employees. 






	4.  	Return
of Property. You agree that upon your last day of active employment at Innovex, as Senior
Vice President, General Manager, Consumer Electronics Division of Innovex, on December
31, 2002, you shall return all Innovex property and confidential information in your
possession except as allowed in this Agreement. 






	


This agreement shall not in any way
be construed as an admission of liability by Innovex or an admission that Innovex has
acted wrongfully with respect to you. Innovex specifically denies and disclaims any such
liability or wrongful acts. 



If any provision of this agreement is
found to be illegal and unenforceable, such provision shall be severed and modified to the
extent necessary to make it enforceable; and as so severed or modified, the remainder of
this agreement shall remain in full force and effect. 



This Agreement is governed by and
shall be construed in accordance with the laws of the State of Minnesota and any dispute
related thereto shall be venued in the state courts of Minnesota located in Hennepin
County, Minnesota. 



This agreement sets forth our entire
agreement and fully supercedes any prior oral or written agreements or understandings
between you and Innovex except for your Employment Agreement (Exhibit A) and your
stock option agreements, which remain fully in effect according to their respective terms
except as modified herein. Innovex asks that our records reflect that you conclude your
employment on terms you understand and accept. Therefore we ask that you declare that you
have entered into this agreement voluntarily, without coercion, duress, or reliance on any
representations by any Innovex employee, agent, or lawyer and with the opportunity to
review its contents with legal counsel should you desire. 



If this letter accurately reflects
our understanding and agreement, please sign the original and copy and return both copies
to me. 







Sincerely,
/s/ William
P. Murnane 



William P. Murnane
President

and CEO 



        Read
and agreed to, with declarations confirmed, this 6th day of December, 2002. 



/s/ Allan Chan 






Page 16 of 20