Document:

<PAGE>

                                                                   EXHIBIT 10.17

                              SEVERANCE AGREEMENT

     THIS SEVERANCE AGREEMENT dated as of November 30, 2000, is between Isolyser
Company, Inc., a Georgia corporation (the "Company"), and JAMES C. RUSHING, III,
a Georgia resident ("Employee").

                                   RECITALS:

     R1.  The Company and Employee entered into that certain Employment
Agreement (the "Employment Agreement") bearing an effective date of December 16,
1998, in accordance with which the Company employed Employee.

     R2.  Employee desires to resign and Company desires to accept the
resignation of Employee upon and subject to the terms and conditions of this
Severance Agreement.

     NOW, THEREFORE, for good and valuable consideration and intending to be
legally bound, the parties agree as follows:

     1.   Resignation. Employee has resigned as an employee of the Company
          -----------
effective on the date hereof (the "Effective Date"), and the Company hereby
accepts such resignation. Such resignation is by mutual agreement and not for
"Cause" or "Good Reason" as defined in the Employment Agreement. Concurrently
with such resignation, Employee has resigned from all officer and director
positions with any subsidiaries or affiliates of the Company.

     2.   Severance. In consideration of Employee's release set forth in Section
          ---------
4 below, and the other covenants and undertakings herein, and provided the
Employee shall not breach the protective covenants set forth in Section 9 of the
Employment Agreement, the Company agrees to make severance payments to Employee
by continuing payment of Employee's salary in accordance with the Company's
regular payroll practices for the period expiring on December 31, 2000, and
paying $150,000 to Employee on January 2, 2001. Such payments shall be reduced
by all applicable federal and state withholding obligations. The Company shall
make available to Employee in accordance with applicable legal requirements
medical and dental COBRA coverages for the continued benefit of Employee and his
dependents in which Employee may elect to participate at his cost by making the
proper election in accordance with applicable legal requirements.
Notwithstanding the immediately preceding sentence, the Company shall pay the
premiums for any such applicable coverages until the earlier of (i) six months
after the Effective Date or (ii) the availability to Employee and his dependents
of other group medical coverage (in respect of the medical COBRA coverage
premium payments) or group dental coverage (in respect of the dental COBRA
coverage premium payments). Employee shall not be entitled to any consulting
fees set forth in Section 12 of the Employment Agreement until following the
thirteenth month anniversary of the Effective Date of Employee's resignation.

<PAGE>

     3.   Stock Options. Employee holds the stock options (collectively, the
          -------------
"Stock Options") issued by the Company identified on Exhibit A attached hereto
                                                     ---------
and incorporated herein by reference. Provided Employee shall not breach the
protective covenants set forth in Section 9 of the Employment Agreement, (a) all
of Employee's Stock Options which would have vested by February 28, 2001
assuming Employee's continued employment until such date shall become vested on
the Effective Date of Employee's resignation, and (b) the expiration of
Employee's Stock Options shall occur on the earlier of the expiration date set
forth in such Stock Options or the first anniversary of the Effective Date of
Employee's resignation rather than three months following Employee's termination
of employment with the Company, such resignation being deemed a retirement for
purposes of the Company's Stock Option Plan.

     4.   Release. In consideration of the covenants of the Company in favor of
          -------
the Employee as set forth in this Severance Agreement, the receipt and
sufficiency of which is hereby acknowledged, Employee, on behalf of himself, his
heirs, executors, administrators, successors and assigns, hereby releases and
forever discharges the Company and each of its present and former officers,
directors, employees, agents, attorneys, affiliates, parents, subsidiaries and
representatives (collectively, the "Released Parties") from any and all claims
(including but not limited to costs and attorneys fees) of whatever kind or
nature, joint or several, under any federal, state or local statute, ordinance
or under the common law, 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 Older Workers' Benefit Protection Act, and any other
employment discrimination law, as well as any other claims based on the
constitutional, statutory, common law or regulatory grounds, that he has now or
may have in the future against the Released Parties, whether known or unknown,
which are based on acts or omissions arising or occurring prior to the date of
this Severance Agreement.

     5.   Ratification. Except as affected hereby, the terms and provisions of
          ------------
the Employment Agreement and Stock Options are hereby ratified and confirmed by
Employee, including, without limitation, the protective covenants set forth in
Section 9 of the Employment Agreement, which shall remain in full force and
effect. Without limiting the foregoing, the covenants contained in Sections 9(d)
and (e) of the Employment Agreement shall continue in effect until the
thirteenth month anniversary of the Effective Date.

     6.   Miscellaneous. This Severance Agreement may be executed in multiple
          -------------
counterparts, each of which shall be deemed an original. All payments made and
benefits provided to Employee under this Severance Agreement shall be net of any
tax required to be withheld by the Company under applicable law and any
indebtedness of Employee to the Company. This Severance Agreement shall be
governed in accordance with the laws of the State of Georgia. This Severance
Agreement and all of the terms, provisions and conditions hereof shall be
binding upon and inure to the benefit of be enforceable by the successors, heirs
and personal representatives of Employee and the Company. Any notices required
or permitted by this Severance Agreement shall be in writing delivered, in the
case of the Company, to the attention of the President of the Company and, in
the

<PAGE>

case of the Employee, to the Employee's last known residence address as set
forth on the books and records of the Company.

     7.   Disclosure. EMPLOYEE ACKNOWLEDGES THAT, PURSUANT TO THE OLDER WORKERS
          ----------
BENEFIT PROTECTION ACT OF 1990, HE HAS THE RIGHT TO, AND HAS BEEN ADVISED TO,
CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE AGREEMENT. HE FURTHER
ACKNOWLEDGES HIS UNDERSTANDING THAT HE HAS 21 DAYS TO CONSIDER THE RELEASE
BEFORE SIGNING IT, THAT HE MAY REVOKE THIS RELEASE WITHIN SEVEN CALENDAR DAYS
AFTER SIGNING IT, AND THAT THIS RELEASE (AND THE COMPANY'S PAYMENT OBLIGATIONS
HERERUNDER) WILL NOT BE EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF THAT
SEVEN-DAY REVOCATION PERIOD.

     8.   Valid Consideration. Employee acknowledges that the consideration for
          -------------------
signing this Release Agreement is a benefit to which he would not have been
entitled had he not signed this Release Agreement.

     9.   No Assignment. Employee represents and warrants that he has not
          -------------
assigned or transferred or purported to assign or transfer to any person, firm,
corporation, association or any other entity, any of the claims released herein.
Employee hereby agrees to indemnify and hold harmless the Released Parties
without limitation for any costs or expenses connected with any such transfer or
assignment.

RECEIPT: Employee acknowledges receipt of a copy of this Release Agreement this
_____ day of November, 2000. Unless and until I execute this Agreement in the
other space provided below, I have not agreed to it.

JAMES C. RUSHING, III

___________________________________________
Signature for Purposes of Receipt Only

MY SIGNATURE BELOW SIGNIFIES MY UNDERSTANDING OF AND VOLUNTARY ASSENT TO THE
TERMS OF THIS AGREEMENT.

JAMES C. RUSHING, III

___________________________________________
Signature
Date:  November _____, 2000

ISOLYSER COMPANY, INC.

<PAGE>

By:__________________________________________
Name:________________________________________
Title:_______________________________________

                                   Exhibit A
                             Jim Rushing's Options
                                as of 11/30/00
                             ---------------------

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
   Grant        Option       Grant        Options      Options      Options       Options        Options     Expiration
    Date         Price        Type        Granted     Exercised    Cancelled    Outstanding    Exercisable      Date
-------------------------------------------------------------------------------------------------------------------------
<S>             <C>          <C>          <C>         <C>          <C>          <C>            <C>            <C>
   12/16/98      1.0940        ISO          20,000        0            0              20,000          5,000   12/16/08
-------------------------------------------------------------------------------------------------------------------------
   02/26/99      2.1250        ISO           5,000        0            0               5,000          1,250   02/25/09
-------------------------------------------------------------------------------------------------------------------------
   12/01/99      2.8130        ISO          75,000        0            0              75,000              0   12/01/09
-------------------------------------------------------------------------------------------------------------------------
   08/09/00      2.2500        ISO          72,282        0            0              72,282              0   08/09/10
-------------------------------------------------------------------------------------------------------------------------
   08/09/00      2.2500        NQ            2,718        0            0               2,718              0   08/09/10
-------------------------------------------------------------------------------------------------------------------------
</TABLE><PAGE>

                                                                   EXHIBIT 10.18
                                                                   -------------
                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS AGREEMENT ("Agreement") is made and entered into effective as of the
17th day of December, 1998 (the "Effective Date"), by and between MICROTEK
MEDICAL, INC., a Delaware corporation (hereinafter the "Company"), and R.G.
WILSON (hereinafter the "Employee").

                                   RECITALS:
                                   --------

     R-1. The Company develops, manufactures and markets disposable, specialty
and safety products for use in medical, industrial and commercial markets.

     R-2. The Company's markets are worldwide.

     R-3. The Company maintains certain trade secrets and confidential
information which is proprietary to the Company, the disclosure or exploitation
of which would cause significant damage to the Company.

     R-4. The Company desires to employ the Employee, and the Employee desires
to accept such employment, for which purposes each of the Company and the
Employee desire to enter into this Agreement to set forth and clarify certain of
the terms and conditions relevant to such employment.

     NOW, THEREFORE, in consideration of the recitals, the covenants and
agreements herein contained and the benefits to be derived herefrom, the
parties, intending to be legally bound, agree as follows:

     1.   Recitals. The recitals set forth above constitute part of this
          --------
Agreement and are incorporated herein by this reference.

     2.   Employment. From and after the date hereof and for the term herein
          ----------
provided, the Company agrees to employ the Employee, and the Employee accepts
such employment with the Company upon the terms and conditions hereinafter set
forth.

     3.   Term. The Employee's employment shall commence on the Effective
          ----

     4.   Date and, subject to Section 8 of this Agreement, shall continue
through the third anniversary of the earlier to occur of (a) March 31, 1999 or
(b) the date of Employee's relocation of his residence to or near Columbus,
Mississippi.

     5.   Duties. The Employee agrees that: (a) he shall devote his full working
          ------
time and attention to the business of the Company and its affiliated companies;
(b) he will perform all of his duties pursuant to this Agreement faithfully and
to the best of his abilities.
<PAGE>

          (a)  Compensation. As full compensation for all services rendered
               ------------
by the Employee pursuant to this Agreement and as full consideration for all of
the terms of this Agreement, the Employee shall receive from the Company during
his employment under this Agreement the base salary, bonuses and fringe benefits
described below.

          (b)  Base Salary. For all services rendered pursuant to this
               -----------
Agreement, the Company shall pay or cause to be paid to the Employee an annual
base salary of $100,000. The annual salary may be increased from time to time
during the term of this Agreement in the discretion of the Company. The base
salary shall be payable in accordance with the customary practices of the
Company for payment of its employees, but in any event, in installments not less
frequently than once monthly.

          (c)  Bonus Compensation. To the extent that the Company shall
               ------------------
establish, from time to time in its discretion, bonus compensation plans for the
benefit of all of its management level employees, the Employee shall be entitled
to participate in such bonus compensation plans in accordance with the terms and
provisions established by the Company.

          (d)  Fringe Benefits. The Company has adopted, or may from time to
               ---------------
time adopt, policies in respect to fringe benefits for its management level
employees in the nature of health and life insurance, holidays, vacation, sick
leave policies, disability and other matters. The Company covenants and agrees
that the Employee shall be entitled to participate in any such fringe benefit
policies adopted by the Company to the same extent that such fringe benefits
shall be available to and for the benefit of all other management level
employees.

          (e)  Relocation Expenses. The Employee agrees to relocate from the
               -------------------
Ashville, North Carolina metropolitan area to the Columbus, Mississippi area on
a schedule to be agreed upon between the Company and the Employee. The Company
agrees that the Employee shall be entitled to participate in the Company's
relocation policy (the "Relocation Policy") as from time to time in effect,
subject to the terms and conditions of such policy.

          (f)  Tax Withholdings and Other Deductions. The Company shall have the
               -------------------------------------
right to deduct from the base salary and any additional compensation payable to
the Employee all amounts required to be deducted and withheld in accordance with
social security taxes and all applicable federal, state and local taxes and
charges as may now be in effect or which may be hereafter enacted or required as
charges on the compensation of the Employee. The Company shall also have the
right to offset from the base salary and any additional compensation payable to
the Employee any loan or other amounts owed to the Company by the Employee.

     6.   Working Facilities. The Company, at its own expense, shall furnish the
          ------------------
Employee with office, working space and such equipment as may be reasonably
necessary for the Employee's performance of his or her duties.

                                      -2-
<PAGE>

     7.   Expenses. The Employee is required as a condition of employment to
          --------
incur ordinary, necessary and reasonable expenses for the promotion of the
business of the Company and its affiliates and subsidiaries, including expenses
for entertaining, travel and similar items. The Employee is authorized to incur
reasonable expenses in connection with such business, including travel and
entertainment expenses, fees for seminars and courses, and expenses incurred in
attendance at executive meetings and conventions. If paid by the Employee, upon
presentation by the Employee of an itemized account of such expenditures in a
manner satisfactory to the Company, the Employee shall be entitled to receive
reimbursement for these expenses, subject to policies that may be established
from time to time by the Company. It is intended by the Company and the Employee
that all expenses incurred pursuant to this paragraph are to be ordinary and
necessary business expenses.

     8.   Termination. The Employee's employment may be terminated in accordance
          -----------
with the provisions of this section. The provisions for termination are as
follows:

          (a)  Death or Disability. The Employee's employment shall be
               -------------------
terminated upon the death or total disability of the Employee (total disability
meaning the failure of the Employee to perform his or her duties and
responsibilities hereunder in the manner and to the extent required by this
agreement for a period of 180 consecutive days by reason of the Employee's
mental or physical disability as determined by the Company, which determination,
in the absence of a showing of bad faith, shall be conclusive upon the
Employee).

          (b)  Termination for Cause. The Employee's employment may be
               ---------------------
terminated by the Company for cause, which for purposes of this Agreement shall
be limited solely to (i) the Employee's material failure or refusal to comply
with the policies, standards and regulations of the Company from time to time
reasonably established and fairly administered by the Company, (ii) a material
breach by the Employee of the terms of Section 9 of this Agreement, or (iii) a
material breach by the Employee of any of the other terms of this Agreement
(including, without limitation, any resignation by the Employee prior to the
expiration of the term of this Agreement) or (iv) the indictment or conviction
of the Employee for any felony, the conviction of the Employee for a misdemeanor
involving the misuse of funds, or the adjudication by a court that the Employee
engaged in willful misconduct in connection with the activities of the Company.

          (c)  Termination Without Cause. The Employee's employment may be
               -------------------------
terminated by the Company without cause: provided, that, in the event of any
termination of the Employee's employment under this paragraph (c) (the Employee
shall be entitled to receive the base salary as set forth in Section 5(a) hereof
for the remaining term of this Agreement payable at the Company's election
either in a lump sum (present valued at a discount rate of 10%) or as otherwise
payable under Section 5(a). The Company's obligation to make payments under this
paragraph shall cease and terminate in the event of any breach by the Employee
of any of the provisions of Section 9 of this Agreement. The Company may
require, as a condition precedent to making any payments under this paragraph to
the Employee, that the Employee execute a

                                      -3-
<PAGE>

customary release and covenant not to sue in favor of the Company. Any payments
under this Section 8(c) shall be subject to Section 5(e).

          9.   Protective Covenants: Remedies.
               ------------------------------

               (a)  Property Rights. The Employee acknowledges and agrees that
                    ---------------
all records of the accounts of customers, lists, prospect lists, vendor lists,
samples, desk calendars, briefcases, day timers, notebooks, computers, computer
records and software provided by the Company or any subsidiary or affiliate of
the Company (collectively, the "Company Group"), policy and procedure manuals,
price lists, catalogs, premises keys, written methods of pricing, lists of needs
and requirements of customers, written methods of operation of the Company
Group, manufacturing techniques and any other records and books relating in any
manner whatsoever to the customers of the Company Group or its business, whether
prepared by the Employee or otherwise coming into the Employee's possession, are
the exclusive property of the Company Group regardless of who actually purchased
or prepared the original book, record, list or other property. All such books,
records, lists or other property shall be immediately returned by the Employee
to the Company upon any termination of employment.

          (b)  Non-Disclosure of Confidential Information. The Employee
               ------------------------------------------
acknowledges that through formal and informal training by the Company Group, the
Employee will become familiar with, among other things, the following:

          Any scientific or technical information, design, process, procedure,
formula or improvement that is secret and of value, and information including,
but not limited to technical or nontechnical data, formula, patterns,
compilations, programs, devices, methods, techniques, drawings, processes and
financial data, which the Company takes reasonable efforts to protect from
disclosure, and from which the Company derives actual or potential economic
value due to its confidential nature (the foregoing being hereinafter
collectively referred to as the "Confidential Information ").

          The Employee acknowledges that use of such Confidential information
will give the Employee an unfair competitive advantage over the Company Group in
the event that the Employee should go into competition with the Company Group
and agrees that during the term of this Agreement and for a period of two (2)
years subsequent to the termination of employment for any reason, the Employee
will not disclose to any person, or utilize for the Employee's benefit, any of
the Confidential Information. The Employee acknowledges that such Confidential
Information is of special and peculiar value to the Company; is the property of
the Company Group, the product of years of experience and trial and error; is
not generally known to the Company Group's competitors; and is regularly used in
the operation of the Company Group's business. The Employee acknowledges and
recognizes that applicable law prohibits disclosure of confidential information
and trade secrets indefinitely (i. e. without regard to the two year period
described in this paragraph), and the Company has the right to require the
Employee to comply with such law in addition to the Company's rights under this
paragraph.

                                      -4-
<PAGE>

          (c)  Non-Interference With Employees. The Employee agrees not to
               -------------------------------
solicit, entice or otherwise induce any employee of the Company Group to leave
the employ of the Company Group for any reason whatsoever, and not to otherwise
interfere with any contractual or business relationship between the Company
Group and any of its employees for two (2) years from the termination of the
Employee's employment.

          (d)  Acknowledgment Regarding Protective Covenants. The Employee
               ---------------------------------------------
acknowledges that the Employee has read and understands the terms of this
Agreement, that the same was specifically negotiated, and that the protective
covenants agreed upon herein are necessary for the protection of the Company
Group's business as a result of the business secrets that will be disclosed
during the employment. Further, the Employee acknowledges that the Company would
not employ the Employee without the specifically negotiated protective covenants
herein stated.

          (e)  Remedies. In addition to any other rights and remedies which are
               --------
available to the Company, with respect to any breach or violation of the
protective covenants set forth herein, it is recognized and agreed that the
Company shall be entitled to obtain injunctive relief which would prohibit the
Employee from continuing any breach or violation of such protective covenants.

     10.  Disputes. In the event of any litigation between the Company and the
          --------
Employee arising out of this Agreement, and the rights and obligations of the
parties hereunder, the prevailing party shall be entitled to recover his or its
reasonable attorney's fees and court costs.

     11.  Notices. Any notice required or permitted to be given under this
          -------
Agreement shall be in writing and personally delivered or sent by registered or
certified mail, return receipt requested, in the case of the Company, to the
principal office of the Company, and in the case of the Employee, to the
Employee's last known residence address.

     12.  Construction. This Agreement shall be governed and interpreted in
          ------------
accordance with the laws of the State of Mississippi. The waiver by any party
hereto of a breach of any of the provisions of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by any party.

     13.  Modification; Assignment. This Agreement may not be changed except by
          ------------------------
written agreement duly executed by the parties hereto. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company. This agreement,
being for the personal services of the Employee, shall not be assignable or
subject to anticipation by the Employee.

     14.  Severability. Each provision of this Agreement shall be considered
          ------------
severable. If for any reason any provisions herein are determined to be invalid
or unenforceable, this Agreement shall be construed in all respects as though
such invalid or unenforceable provisions were omitted, and such invalidity or
unenforceability shall not impair or otherwise affect the validity of the other
provisions of this Agreement. Moreover, the parties agree to replace such

                                      -5-
<PAGE>

invalid provision with a substitute provision that will correspond to the
original intent of the parties.

     15.  Number of Agreements. This Agreement may be executed in any number of
          --------------------
counterparts, each one of which shall be deemed an original.

     16.  Pronouns. The use of any word in any gender shall be deemed to include
          --------
any other gender and the use of any word in the singular shall be deemed to
include the plural where the context requires.

     17.  Headings. The section headings used in this Agreement are for
          --------
convenience only and are not to be controlling with respect to the contents
hereof.

     18.  Entire Agreement. This Agreement contains the complete and exclusive
          ----------------
statement of the terms and conditions of the Employee's employment by the
Company, and there exists no other inducement or consideration between the
Company and the Employee relative to the employment contemplated by this
Agreement. All prior agreements relative to the subject matter of this Agreement
are terminated.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.

MICROTEK MEDICAL, INC.

BY:   _____________________                          _____________________
                                                     R. G. WILSON

ITS:  _____________________

                                      -6-

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