Exhibit 10.1

 

Vysis, Inc.

SEVERANCE PROGRAM

 

OVERVIEW

 

The Vysis, Inc. SeveranceProgram was adopted by Vysis, Inc. ("Vysis") on August17, 2001 (the"Effective Date") to (i) retain key personnel, (ii) provide anincentive for key personnel to maintain focus on business operations andcompany growth in order to maintain and increase the value of Vysis and itsaffiliates in light of the announcement by BP plc to explore alternatives fordivesting its Vysis holdings, (iii) secure smooth business and technologytransfer to a successor, and (iv) provide income protection for key personnelin applicable circumstances. The Plan will expire as of the date which is one(1) year following a Change in Control (the "Expiration Date").Notwithstanding the foregoing, if a Change in Control does not occur by August17, 2002, the Plan shall automatically terminate as of such date.

The Plan supersedes all priorseverance plans, programs, arrangements or policies of the Company, whetheroral or written except any written employment agreement.

The Plan shall be applicable toeach employee of Vysis and its affiliates (the "Company") who, as ofthe Effective Date, meets the following requirements:

 
|   | he or she is  employed by the Company in the United States or the United Kingdom;                                                                        |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                     |
|   | he or she is  employed as a regular full-time employee or a regular part-time employee who  is normally scheduled to work 20 or more hours per week; and |
|   |                                                                                                                                                     |
|   | he or she is  not a party to an employment agreement with the Company.                                                                                   |

Employees of the Company whomeet the foregoing requirements are referred to herein as "CoveredEmployees". A Covered Employee who receives benefits pursuant to the Planon account of a Covered Termination (as defined below) shall not be entitled toseverance benefits under any other plan of the Company.

COVERED TERMINATIONS

For purposes of the Plan, aCovered Employee's employment shall be considered to have been terminated in a"Covered Termination" if:
| (a)    | the Covered  Employee's employment with the Company is terminated by the Company after a  Change in Control and before the Expiration Date for reasons other than for  Cause (as defined below); or |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                |
| (b)    | the Covered  Employee resigns employment with the Company after a Change in Control and  before the Expiration Date and within 30 days after either of the following:                               |

 
| (i)    | a reduction  in a Covered Employee's rate of base salary or benefits (exclusive of options  and bonuses) as compared to his rate of base salary and benefits (exclusive  of options and bonuses) immediately prior to the Change in Control (as the  same may have been increased or improved from time to time);                                                 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                              |
| (ii)   | the  diminution of the Covered Employee's title, authorities or responsibilities  as compared to the Covered Employee's title, authorities or responsibilities immediately  prior to the Change in Control; or                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                              |
| (iii)  | the  relocation of the Covered Employee's principal office or job location that is  more than 50 miles from his office or job location immediately prior to the  Change in Control (except for required travel on business to an extent  substantially consistent with his business travel obligations as in effect  immediately prior to the Change in Control). |

For purposes of the Plan, theterm "Cause" means any of the following: (A) the engaging by theCovered Employee in willful conduct involving misappropriation, dishonesty, orserious moral turpitude which is demonstrably and materially injurious to theCompany or (B) the Covered Employee's conviction of a felony.

Any Covered Termination underparagraph (a) above, shall be effected by means of at least 15 days advancenotice from the Company to the Covered Employee. Any Covered Termination underparagraph (b) above, shall be effected by means of at least 15 days advancenotice from the Covered Employee to Vysis.

TRANSFERS

 

A Covered Employee's employmentwith the Company shall not be considered terminated, and no benefits shall bepayable to or with respect to any Covered Employee under the Plan, if hisemployment with the Company terminates solely:

 
| (a)    | as a result  of a transfer of employment to an affiliate of the Company; or                                                                                                                                                                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                        |
| (b)    | in  connection with the sale or other disposition of assets, business division,  facility or operating unit of the Company and he is offered employment with  the purchaser or transferee of such assets, business division, facility or  operating unit in a position which is substantially comparable to his  position with the Company immediately prior to the applicable transaction. |
|   |                                                                                                                                                                                                                                                                                                                                                                                        |

Nothing in the foregoingprovisions of this section shall restrict or reduce a Covered Employee's rightsunder paragraph (b) of the "Covered Terminations" section above.

BENEFITS

 

If a Covered Employee'semployment is terminated in a Covered Termination, the Covered Employee shallbe entitled to the benefits set forth in Appendix A, B or C as applicable.

 

All payments and benefits withrespect to a Covered Employee under the Plan will be subject to such deductionsand withholdings as may be required to be made pursuant to law, governmentregulations or order, or by agreement with or consent of the recipient. All taxliability of the recipient resulting from the payments under the Plan shall bethe responsibility of the recipient.

 

REIMBURSEMENT FOR CERTAINEXPENSES OF ENFORCEMENT

 

If a Covered Employee bringsany legal action for the enforcement of his or her rights under the Plan orbecause of an alleged dispute, breach or default in connection with any of theprovisions of the Plan, and if the Covered Employee is the prevailing party insuch action, Vysis shall reimburse the Covered Employee for his or herreasonable attorneys' fees and any other costs incurred by the Covered Employeein connection with such action. Any reimbursements made to a Covered Employeepursuant to this section shall be in addition to any other relief to which theCovered Employee may be entitled as a result of the legal action.

 

CONDITIONS ON BENEFITS

 

No benefits will be providedunder the Plan to any Covered Employee unless and until the Covered Employeehas executed and returned to Vysis a copy of a release and confidentialityagreement in the form attached hereto as Appendix D (the "Release")and until such Release becomes effective in accordance with its terms.

 

Notwithstanding any otherprovision of the Plan to the contrary, benefits under the Plan will be paidonly if the Administrator (as defined below) decides, in its discretion, thatthe applicant is entitled to such benefits.

 

NONDUPLICATION OF BENEFITS

 

Benefits will be provided underthe Plan to a Covered Employee for only one event. Therefore, if more than oneevent occurs with respect to a Covered Employee which entitles such CoveredEmployee to benefits under the Plan, benefits will be provided under the Planas if only one such event had occurred and no further benefits will be providedhereunder.

 

DEFINITION OF CHANGE IN CONTROL

 

For purposes of the Plan, a"Change in Control" will be deemed to occur as of the date that anysingle acquirer, other than Vysis, any entity owned, directly or indirectly, bythe stockholders of Vysis in substantially the same proportions as theirownership of stock of Vysis, and any trustee or other fiduciary holdingsecurities under an employee benefit plan of Vysis or its subsidiaries or suchproportionately owned corporation) becomes through acquisitions of securitiesof Vysis after the Effective Date of the Plan and prior to the Expiration Date,the "beneficial owner" (as defined in Rule 13d-3 promulgated underthe Securities Exchange Act of 1934, as amended), directly or indirectly, ofsecurities of Vysis representing 50% or more of the combined voting power ofVysis' then outstanding securities having the right to vote for the election ofdirectors.

 

Once a Change in Control hasoccurred for purposes of the Plan, no future events will constitute a Change inControl for purposes of the Plan.

ADMINISTRATION

 

The authority to control andmanage the operation and administration of the Plan shall be vested in theGeneral Counsel of Vysis (the "Administrator") The Administratorshall be the "named fiduciary" as described in section 402 of theEmployee Retirement Income Security Act of 1974, as amended("ERISA"), with respect to its authority under the Plan. Except asprovided below, Vysis shall be the administrator of the Plan and shall have therights, duties, and obligations of an "administrator" as that term isdefined in Section 3(16)(A) of ERISA. The Administrator shall have thefollowing duties and obligations with respect to the Plan:

 
| (a)    | to enforce  the Plan in accordance with its terms and with such applicable rules of  procedure and regulations as may be adopted by the Administrator;                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                        |
| (b)    | to determine  conclusively all questions arising under the Plan, including the power to  determine the eligibility of Covered Employees and the rights of Covered  Employees to benefits under the Plan, to conclusively interpret and construe  the provisions of the Plan, and to remedy any ambiguities, inconsistencies or  omissions of whatever kind; |
|   |                                                                                                                                                                                                                                                                                                                                                        |
| (c)    | to employ or  utilize agents, attorneys, accountants or other persons (who may also be  employed by or represent the Company) for such purposes as the Administrator  considers necessary or desirable to discharge its duties; and                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                        |
| (d)    | to establish  a claims procedure in accordance with section 503 of ERISA.                                                                                                                                                                                                                                                                                   |

 

To the extent permitted by law,any interpretation of the Plan and any decision on any matter within thediscretion of the Administrator made by it in good faith shall be binding onall persons. A misstatement or other mistake of fact shall be corrected when itbecomes known and the Administrator shall make such adjustment on accountthereof as it considers equitable and practicable. Notwithstanding any otherprovisions of the Plan, the Administrator shall discharge its duties hereundersolely in the interests of the Covered Employees entitled to benefits under thePlan and for the exclusive purpose of providing benefits to Covered Employeesaccording to the terms and conditions of the Plan. In exercising its authorityunder the Plan, the Administrator may delegate all or any part of itsresponsibilities and powers to any person or persons selected by it.

 

SOURCE OF PAYMENTS

 

The obligations of the Companyunder the Plan are purely contractual. Any amount payable under the terms ofthe Plan shall be paid from the general assets of the Company and no trust orother separate fund shall be established for this purpose.

 

PLAN NOT GUARANTEE OFEMPLOYMENT.

 

The Plan does not constitute aguarantee of employment by the Company, and participation in the Plan will notgive any individual the right to be retained in the employ of the Company, norany right or claim to any benefit under the Plan, unless such right or claimhas specifically arisen under the Plan.

 

AMENDMENT AND TERMINATION

 

The Plan may be modified orterminated at any time by Vysis; provided, however, that the Plan may not beamended following a Change in Control in a manner which reduces the amount ofany severance benefits that may be provided pursuant to the Plan, adverselymodifies the types of events that will constitute Covered Terminations forpurposes of the Plan or limits the class of Covered Employees.

 

 

APPENDIX A TO VYSIS, INC.

SEVERANCE PROGRAM

FOR EXECUTIVE OFFICERS

 

                The payments and benefits described in thisAppendix A apply only to Executive Officers of Vysis who incur a CoveredTermination under the Plan. Other than the benefits specifically stated in thisAppendix A to be provided under this Plan, the Covered Employee's compensationand benefits will terminate as of the date of the Covered Termination and noadditional compensation or benefits shall be provided for periods after thatdate, except to the extent specifically provided by the terms of an employeebenefit plan.

 

COVERED EMPLOYEES

 

                Executive Officers of Vysis listed on ExhibitA.

SALARY CONTINUATION BENEFIT

 

                The "Salary Continuation Benefit"for a Executive Officer shall be equal to the applicable severance lump sumreflected in the attached Exhibit A.

 

                A Covered Employee's Salary ContinuationBenefit shall be paid in a lump sum.

 

                The Salary Continuation Benefit shall consistonly of base salary ("Base Salary") and shall not include any bonusor incentive payments or other types of compensation whatsoever.

 

                The period which is included in the lump sumSalary Continuation Benefit (indicated in Exhibit A as the "Total  # Weeks Severance") is referred toreferred to herein as the "Salary Continuation Period".

MEDICAL COVERAGE BENEFIT

 

                A Covered Employee will be eligible tocontinue to participate in the Company's group medical plan in which theCovered Employee participated as of the date of the Covered Termination, as thesame may be amended from time to time, through the Salary Continuation Periodon the same terms and conditions (including applicable premium payments andlevel of coverage (such as individual or family)) as similarly situated activeemployees of the Company; provided, however, that the Company shall not berequired to permit a Covered Employee to pay any applicable premiums on apre-tax basis. The period of coverage provided during the Salary ContinuationPeriod shall be in addition to, and not in lieu of, coverage required undersection 4980B of the Internal Revenue Code of 1986, as amended. Notwithstandingthe foregoing, if the Company is unable, after using its reasonable bestefforts, to provide the Covered Employee (and, to the extent applicable, hiscovered dependents) with group health coverage in accordance with the foregoingduring any portion of the Salary Continuation Period, the Company shall pay tothe Covered Employee the following amounts:

 

                (a) a lump sum payment (the "Make-WholePayment") equal to the aggregate amount that the Company estimates, ingood faith, that the Covered Employee will be required to pay as a premium toobtain similar medical coverage on an individual basis for the portion of theSalary Continuation Period during which the Company is unable to provide suchcoverage; and

 

                (b) a lump sum payment (the "Gross-UpAmount") such that, after payment by the Covered Employee of all taxes, including,without limitation, all income and payroll taxes, on the Make-Whole Payment andthe Gross Up Amount, determined assuming the highest applicable marginal rateof federal, state and local income taxation for the year in which theMake-Whole Payment and Gross-Up Amounts are to be paid, the Covered Employeeretains an amount equal to the Make-Whole Payment.

 

 

LIFE INSURANCE BENEFIT

 

                A Covered Employee will be entitled to lifeinsurance coverage for the Salary Continuation Period which provides a benefitequal to two times the Covered Employee's Base Salary.

 

OUTPLACEMENT SERVICES

 

                A Covered Employee will be provided withoutplacement services suitable for an executive at a comparable level throughthe Salary Continuation Period or until the Covered Employee securesalternative employment, whichever is earlier. The Covered Employee shall beentitled to select an outplacement provider of his or her choice; provided,however, that the cost of such services shall not exceed $5,000 per month.

 

 

**Exhibit A to Appendix A**

 

 
| **Covered  Employee** |   | **Lump Sum  Payment Benefit** |    |
|-----------------------|--------|-------------------------------|---------|
|                  |   |                          |    |
| John Bishop           |   | $                             | 930,000 |   |
| Russel Enns           |   | $                             | 258,000 |   |
| Robert Koska          |   | $                             | 240,000 |   |
| William  Murray       |   | $                             | 259,500 |   |
| Steven  Seelig        |   | $                             | 400,000 |   |
| John Sluis            |   | $                             | 420,000 |   |

 

**APPENDIX C TO VYSIS, INC.**

**SEVERANCE PROGRAM**

**EXEMPT AND NON-EXEMPT EMPLOYEES**

**OTHER THAN EXECUTIVE OFFICERS AND**

**SENIOR MANAGEMENT EMPLOYEES**

 

 

                The payments and benefits described in thisAppendix C apply only to Covered Employees who are not described in Appendix Aor B and who incur a Covered Termination under the Plan.  Other than the benefits specifically statedin this Appendix C to be provided under this Plan, the Covered Employee’scompensation and benefits will terminate as of the date of the CoveredTermination and no additional compensation or benefits shall be provided forperiods after that date, except to the extent specifically provided by theterms of an employee benefit plan.

 

COVEREDEMPLOYEES

 

                All Covered Employees other than ExecutiveOfficers (described in Appendix A) or Senior Management Employees (described inAppendix B).

 

SALARYCONTINUATION BENEFIT

 

The “Salary ContinuationBenefit” shall be determined in accordance with the following:

 

 

 

**               **ACovered Employee’s Salary Continuation Benefit shall be paid in a lump sum.

 

                The Salary Continuation Benefit shall consistonly of base salary (“Base Salary”) and shall not include any bonus orincentive payments or other types of compensation whatsoever.

 

                The period which is included in the lump sumSalary Continuation Benefit is referred to herein as the “Salary ContinuationPeriod.

 

MEDICALCOVERAGE BENEFIT

 

                Level 2 Covered Employees will be providedwith continued medical coverage pursuant to and in accordance with section4980B of the Internal Revenue Code of 1986, as amended (“COBRA Coverage”);provided, however, that for the Salary Continuation Period, the applicablepremium for such COBRA Coverage shall be the same as the premium applicablewith respect to similarly situated active employees of the Company for the samecoverage.

 

LIFE INSURANCEBENEFIT

 

                As provided by the terms of the Company’sthen current life insurance plan.

 

OUTPLACEMENTSERVICES

 

                A Covered Employee will be provided withoutplacement services which are suitable for an employee at the Covered Employee’ssalary grade level through the Salary Continuation Period or until the CoveredEmployee secures alternative employment, whichever is earlier.

 

 

**Exhibit A to Appendix C**

 

 
| **Covered Employee** |   | **Lump Sum  Payment Benefit** |    |
|----------------------|--------|-------------------------------|---------|
|                 |   |                          |    |
| Al Ellsworth         |   | $                             | 101,231 |   |
|                      |        |                               |         |  |

 

 

**APPENDIX D TO VYSIS, INC.**

## **SEVERANCE PROGRAM**

 

Form of Release and Confidentiality Agreement

 

 

                1.    General Release.   Inconsideration of the payments and benefits set forth in the Vysis, Inc.Severance Program (the “Plan”), the undersigned (the “Employee”) for himself orherself and for his or her estate, heirs, personal representatives,administrators and assigns, does hereby release and forever discharge Vysis,Inc. (“Vysis”) and its respective officers, agents, employees, attorneys,subsidiaries, related companies, affiliates, successors, and assigns from anyand all rights, actions, claims, demands, debts, dues, sums of money, accounts,attorneys’ fees, complaints, costs, losses, suits, actions, charges,grievances, promises, agreements, controversies, judgments, executions,obligations, damages, liabilities and causes of action of whatsoever nature,kind or character, cognizable at law or equity, which the Employee may now haveor claims or might hereafter have or claim, whether known or unknown, basedupon or arising out of any matter or thing whatsoever through the date of thisrelease, including without limitation, any claim, action or cause of actionwhich was or is related to or arises out of the Employee’s employment withVysis or its affiliates and/or his or her separation therefrom, or which arises under any local, state or federallaw, statute, rule, ordinance, regulation or the common law, including, but notlimited to, claims or rights arising under the Age Discrimination in EmploymentAct, Title VII of the Civil Rights Act of 1964, as amended, and/or theAmericans With Disabilities Act. The Employee further promises that he will notseek recovery on his or her own behalf in any proceeding nor accept anyrecovery from any proceeding brought on his or her behalf for any injuryincurred by the Employee based upon acts or omissions occurring prior to theEmployee’s execution of this Agreement.  It is agreed and understood that this release and the promise of theEmployee not to sue is not intended to affect the Employee’s right to assertclaims based on events occurring after the Employee’s execution of thisAgreement.

 

                2.             Paymentof Benefits.  The Employeeunderstands and agrees that any payments which are payable to the Employeeunder the Plan will be paid to the Employee upon the expiration of the sevenday revocation period described below provided that the Employee has notrevoked his or her execution of this Agreement prior to that time.  The Employee agrees that the payments andbenefits that Vysis and its affiliates have agreed to provide to the Employeepursuant to the Plan provide the Employee with greater benefits than theEmployee would otherwise be entitled to receive if the Employee did not signthis Agreement .

 

                3.             Adviceto Employee.  **THE EMPLOYEE IS HEREBY ADVISED INWRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT.  THE EMPLOYEE HAS A PERIOD OF TWENTY-ONE (21)DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT. FOR A PERIOD OF SEVEN (7) DAYS AFTER THE EXECUTION OF THIS AGREEMENT,THE EMPLOYEE MAY REVOKE THIS AGREEMENT, AND THIS AGREEMENT SHALL NOT BECOMEEFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.  THE EMPLOYEE UNDERSTANDS THAT AFTER HEEXECUTES THIS AGREEMENT HE MAY REVOKE THIS AGREEMENT BY PROVIDING WRITTENNOTICE OF REVOCATION TO THE COMPANY WITHIN SEVEN (7) DAYS.  THE EMPLOYEE UNDERSTANDS THAT IF HE DOES NOTEXERCISE HIS OR HER RIGHT OF REVOCATION, THIS AGREEMENT WILL BECOME EFFECTIVEUPON THE EIGHTH DAY FOLLOWING THE EMPLOYEE’S EXECUTION.**

 

                4.             Confidentiality.  The Employee hereby reaffirms his agreementto abide by any and all agreements pertaining to confidential information,trade secrets, and intellectual property of the Company even after thetermination of his employment.  Further,the Employee agrees that, except as may be required by the lawful order of acourt or agency of competent jurisdiction, or except to the extent thatEmployee has express authorization from Vysis or its affiliates, the Employeeagrees to keep secret and confidential indefinitely all non-public information(including, without limitation, information regarding litigation and pendinglitigation) concerning Vysis and its affiliates (collectively, “ConfidentialInformation”) which was acquired by or disclosed to the Employee during thecourse of Employee’s employment with Vysis and its affiliates and not todisclose the same, either directly or indirectly, to any other person, firm, orbusiness entity, or to use it in any way.

 

Confidential Information doesnot include (a) information which, at the time of disclosure is published,known publicly or is otherwise in the public domain, through no fault of theEmployee; (b) information which, after disclosure is published or becomes knownpublicly or otherwise becomes part of the public domain, through no fault ofthe Employee; and (c) information which is required to be disclosed incompliance with applicable laws or regulations or by order of a court or otherregulatory body of competent jurisdiction. To the extent that any court or agency seeks to have the Employeedisclose Confidential Information,the Employeeshall promptly inform Vysis, andthe Employeeshall take such reasonable steps to preventdisclosure of Confidential Information until Vysis has been informed of suchrequested disclosure, and Vysis has an opportunity to respond to such court oragency.   The Employee acknowledges thatVysis and its affiliates would be irreparably injured by a violation of this paragraph4 andthe Employee agreesthat Vysis in addition to any other remedies available to it for such breach orthreatened breach, shall be entitled to a preliminary injunction, temporaryrestraining order, or other equivalent relief, restraining the Employee fromany actual or threatened breach of this paragraph 4. If a bond is required tobe posted in order for Vysis to secure an injunction or other equitable remedy,the parties agree that said bond need not be more than a nominal sum.

 

                IN WITNESS THEREOF, the Employee has hereuntosettheEmployee’s hand, and Vysis has caused these presents to be executed in its nameand on its behalf, all as of the day and year indicated below.

 
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