Exhibit 10.50
SEPARATION AGREEMENT AND GENERAL RELEASE
This Agreement is executed on the dates set forth below by and between
XXXXXX X. XXXXXX ("Xxxxxx"), residing at 000 Xxxxx Xxxx, Xxxxx Xxxx, Xxx Xxxxxx
00000, and OSTEOTECH, INC. ("Osteotech"), located at 00 Xxxxx Xxx, Xxxxxxxxx,
Xxx Xxxxxx 00000.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xxxxxx and Osteotech disagree concerning the circumstances
surrounding the termination of Xxxxxx'x employment with Osteotech; and
WHEREAS, Xxxxxx and Osteotech desire to resolve this disagreement and other
disputes that have arisen between them;
NOW, in consideration of the mutual covenants and obligations hereinafter
set forth, Xxxxxx and Osteotech agree as follows:
1. Xxxxxx and Osteotech confirm (i) the separation of Xxxxxx from his
employment at Osteotech upon the close of business on January 15, 2002, (ii)
Xxxxxx'x resignation as President and Chief Operating Officer of Osteotech,
effective November 15, 2001, and (iii) Xxxxxx'x resignation as a Director of
Osteotech, effective January 15, 2002.
2. Osteotech shall pay Xxxxxx an amount equal to ten months of his base
salary in the sum of two hundred fifty two thousand five hundred dollars
($252,500.00). Such payment shall be made by check in twenty (20) semi-monthly
installments, between January 15, 2002 and November 15, 2002, each in the amount
of twelve thousand six hundred twenty five dollars ($12,625.00) gross, subject
to applicable deductions for taxes. Xxxxxx shall also receive as soon as
possible in calendar year 2002, the amount of eleven thousand two hundred fifty
dollars ($11,250.00) gross, subject to applicable deductions for taxes. In
addition, if Xxxxxx has
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not as of November 15, 2002 obtained comparable employment (as evidenced by, for
example, duties and responsibilities or overall compensation and/or potential
compensation or position with the new company or other entity), Xxxxxx shall
receive semi-monthly payments each in the amount of twelve thousand six hundred
twenty five dollars ($12,625.00) gross, subject to applicable deductions for
taxes, during the period between November 15, 2002 and November 15, 2003 or
until Xxxxxx obtains comparable employment, whichever occurs sooner. In the
event that Xxxxxx does not obtain comparable employment but receives
compensation in any form from any other source of employment (including
consulting or self-employment) between November 15, 2002 and November 15, 2003,
all such compensation shall be deducted from any amounts that may otherwise be
owed by Osteotech to Xxxxxx as set forth herein during such period. Xxxxxx
agrees to promptly notify Xx. Xxxxxxx X. Xxxxx, President and Chief Executive
Officer of Osteotech, or his successor if and when he obtains comparable
employment between November 15, 2002 and November 15, 2003. Such notice shall
state the date such comparable employment commenced. In the event Xxxxxx
receives compensation between November 15, 2002 and November 15, 2003 from any
source of employment that is not comparable employment ("Alternate Employment"),
he shall notify Xx. Xxxxx or his successor of the amount of gross compensation
from Alternate Employment received by Xxxxxx during each month of such period.
Such notification shall be delivered to Xx. Xxxxx or his successor no later than
the tenth (10th) day of the month immediately following the month in which
compensation from Alternate Employment is received by Xxxxxx. The amount of
gross compensation payable to Xxxxxx by Osteotech hereunder during the month
immediately following the month in which compensation from Alternate Employment
is received by Xxxxxx (or subsequent months to the
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extent required to provide Osteotech full credit hereunder) shall be reduced by
the gross amount of such compensation from Alternate Employment received by
Xxxxxx.
3. (a) Consistent with past practice including the payment of premiums,
Xxxxxx'x participation in Osteotech's Medical/Dental Plan, or Osteotech's
payment of premiums for Xxxxxx'x family medical and dental coverage, shall
continue through the earlier of (i) the end of the last pay period for which
payments are being made as described in Section 2 of this Agreement, or (ii) the
date that Xxxxxx obtains comparable employment.
(b) Consistent with past practice including the payment of premiums,
Xxxxxx'x participation in Osteotech's life insurance coverage shall continue
through the earlier of (i) the end of the last pay period for which payments are
being made as described in Section 2 of this Agreement, or (ii) the date that
Xxxxxx obtains comparable employment.
(c) Xxxxxx shall be eligible to receive reasonable outplacement benefits,
consistent with those previously provided by Osteotech to departing management,
as long as he is actively seeking new employment following his employment by
Osteotech, which benefits must be approved by and arranged through Xx. Xxxxxxx
Xxxxxxxx, Director of Human Resources of Osteotech, or his successor.
(d) Xxxxxx'x participation in Osteotech's Stock Purchase Plan shall end
effective January 15, 2002. Xxxxxx confirms that he never participated in
Osteotech's 401(k) Plan and that he is not entitled to any benefits thereunder.
4. Xxxxxx agrees that no additional compensation of any kind shall be paid
to him, and the benefits provided to him under this Agreement shall be in full
payment and satisfaction of any and all financial obligations due to him from
Osteotech. Xxxxxx shall not be entitled to receive any bonus based on individual
performance or otherwise. It is understood and
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agreed that, except for the 100,000 and 25,000 vested options described in
Exhibits A and B hereto, respectively, none of the options granted to Xxxxxx
under any of Osteotech's option plans had vested as of January 15, 2002. In
accordance with their terms, all such unvested options, including without
limitation those unvested options described in Exhibits A and B, terminated and
were of no further force or effect as of January 15, 2002. The vested options
described in Exhibits A and B will be exercisable by Xxxxxx until April 15, 2002
(90 days after January 15, 2002), subject to the terms and conditions of such
options.
5. All inquiries received by Osteotech concerning Xxxxxx from potential or
future employers shall be directed to Xx. Xxxxxxx Xxxxxxxx, or his successor,
for response. Should any potential or future employer contact Osteotech for a
reference concerning Xxxxxx, Osteotech shall verify only Xxxxxx'x job title and
dates of employment.
6. (a) It is understood and agreed that, by this Agreement, Xxxxxx and
Osteotech intend to settle any and all claims which Xxxxxx has or may have
against Osteotech arising out of or resulting from Xxxxxx'x employment at
Osteotech and his separation from such employment. Accordingly, in exchange for
the benefits provided to Xxxxxx by this Agreement, Xxxxxx, for himself, his
heirs, successors and assigns, hereby voluntarily discharges and releases
Osteotech and its affiliates, parent and subsidiary companies, officers,
directors, employees, agents, representatives, successors and assigns (the
"Releasees") from any and all claims or liabilities of any kind or description,
known or unknown, suspected or unsuspected, fixed or contingent, which Xxxxxx
ever had, now has or hereafter may have against each or any of the Releasees by
reason of any matter whatsoever arising out of or resulting from Xxxxxx'x
employment at Osteotech and his separation from such employment. This release of
claims specifically includes, but is not limited to, any claim of
discrimination, including any claim
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arising under, or based upon, the Age Discrimination in Employment Act (or the
Older Workers Benefit Protection Act), Title VII of the Civil Rights Act of
1964, the Americans With Disabilities Act and/or the New Jersey Law Against
Discrimination, and any and all contract, quasi-contract, estoppel, tort or
statutory claims under federal, state or local law arising out of or resulting
from Xxxxxx'x employment at Osteotech and his separation from such employment.
(b) Nothing contained in this Agreement shall be deemed to be a release of
any obligation undertaken in this Agreement.
7. In further recognition of the benefits provided to Xxxxxx under this
Agreement, Xxxxxx agrees to consult with Osteotech with respect to matters which
occurred during the period of Xxxxxx'x employment at Osteotech, and to cooperate
with Osteotech in connection with the defense of any claim or proceeding made or
filed against Osteotech (or any officer, director or employee thereof) or the
prosecution of any claim or proceeding made or filed by Osteotech, in each case
relating to Osteotech's business during the period of his employment at
Osteotech. Xxxxxx agrees to make himself available at reasonable times and upon
reasonable notice, consistent with his other business commitments, to be
interviewed or deposed concerning any such claim or proceeding. Xxxxxx further
agrees to promptly notify Xx. Xxxxxxx X. Xxxxx, or his successor or designee, if
Xxxxxx receives any legal notices or requests for information from any person or
entity, other than a representative of Osteotech, concerning matters which arose
during the period of his employment at Osteotech. Osteotech agrees to reimburse
Xxxxxx for reasonable and necessary out-of-pocket expenses incurred in
connection with the satisfaction of his obligations under this section. However,
Xxxxxx shall seek advance approval from Xx. Xxxxxxx X. Xxxxx or his successor or
designee before incurring any significant expense for which Xxxxxx shall seek
reimbursement from Osteotech.
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8. Xxxxxx agrees that he shall not make any public disparaging statements
concerning (a) Osteotech; (b) any officer, director or employee of Osteotech; or
(c) Osteotech's products or services. Osteotech agrees that it, as well as its
officers and directors, shall not make any public disparaging statements
concerning Xxxxxx. Xxxxxx agrees that Xxxxxx'x violation of his obligation under
this Section 8 shall entitle Osteotech to cease making any of the payments and
providing any other benefits to Xxxxxx under this Agreement from the date of
such violation, and entitle Osteotech to seek injunctive relief against Xxxxxx.
Osteotech agrees that Osteotech's violation of its obligations under this
Section 8 will only entitle Xxxxxx to seek injunctive relief against Osteotech.
9. (a) Xxxxxx will not disclose or provide to any person, firm, corporation
or entity (except when authorized by Osteotech in writing) any information,
materials, biologics or animals which are owned by Osteotech or which came into
the possession of Osteotech from a third party under an obligation of
confidentiality, including without limitation, information relating to trade
secrets, business methods, products, processes, procedures, development or
experimental projects, suppliers, customer lists or the needs of customers or
prospective customers, clients, etc. (collectively "Confidential Information"),
which Confidential Information came into his possession or knowledge during the
course of his employment by Osteotech, and Xxxxxx will not use such Confidential
Information for his own purpose or for the purpose of any person, firm,
corporation or entity, other than Osteotech. The provisions of this section
shall not apply to the following Confidential Information: (i) Confidential
Information which at the time of disclosure is already in the public domain;
(ii) Confidential Information which Xxxxxx can demonstrate was in his possession
or known to him prior to the effective date of his employment by Osteotech;
(iii) Confidential Information which subsequently becomes
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part of the public domain through no fault of Xxxxxx; (iv) Confidential
Information which becomes known to Xxxxxx through a third party who is under no
obligation of confidentiality to Osteotech; and (v) Confidential Information
which is required to be disclosed by law or by judicial or administrative
proceedings.
(b) Xxxxxx agrees that, no later than January 31, 2002, he shall deliver to
Xx. Xxxxxxx Xxxxxxxx of Osteotech all books, records, notes, documents and other
written or computer generated materials of any nature whatsoever relating to
Osteotech's business and any other Osteotech property in his possession or
within his control (e.g., credit cards, equipment, office keys, samples). Xxxxxx
agrees that he shall not keep in his possession or control any of Osteotech's
property of any kind.
(c) For the period of time Xxxxxx receives payments as set forth in this
Agreement, Xxxxxx agrees that he shall not directly or indirectly be engaged in
or assist others in engaging in any business or activity which is involved in
selling products, processes or services which compete with any significant
product, process or service which Osteotech is developing, marketing or selling
at the time of such termination, whether his involvement shall be as an owner
(except for passive ownership of up to five percent (5%) of the securities of a
company), officer, director, employee, consultant, partner or agent. For
purposes of this provision, products, processes or services which Osteotech is
marketing or selling shall be deemed "significant" if sales of such products,
processes or services exceed ten percent (10%) of Osteotech's total sales.
(d) Xxxxxx agrees that the restrictions imposed upon him by this Agreement
are reasonable and that they are appropriate and necessary to protect
Osteotech's
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legitimate business interests. Xxxxxx further agrees that such restrictions do
not and will not impose an undue hardship upon him.
(e) Xxxxxx agrees that the post-termination obligations undertaken by him
pursuant to this Agreement are consistent with those undertaken by him pursuant
to his Employment Agreement (the "Employment Agreement"), dated September 13,
1999. Xxxxxx further acknowledges and agrees that the terms set forth in section
2 of this Agreement reflect a modification of the terms set forth in the
Employment Agreement. Xxxxxx further agrees that the post-termination
obligations contained in the Employment Agreement remain in full force and
effect.
(f) Xxxxxx agrees that in the event of a breach or threatened breach by him
of the provisions of this section, in whole or in part, Osteotech shall be
irreparably damaged and shall be entitled to (1) an injunction from a court of
competent jurisdiction to prevent any further breaches, and (2) recovery of
costs and reasonable attorney's fees incurred by Osteotech in connection with
its application for injunctive relief. Nothing contained in this Agreement shall
be construed as prohibiting Osteotech from pursuing any other remedies which may
be available for such breach or threatened breach, including the recovery of
damages from Xxxxxx.
10. Xxxxxx acknowledges and represents that he fully understands this
Agreement, that he has had adequate and reasonable opportunity to review the
Agreement, that he was advised to consult with independent counsel of his choice
before signing it, that he did in fact consult with independent counsel of his
choice before signing it, and that he is signing it voluntarily.
11. The parties acknowledge that as a public company Osteotech will be
required to file a copy of this Agreement as an exhibit to its periodic reports
filed with the
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Securities and Exchange Commission (the "SEC") and to describe the terms of this
Agreement in such periodic reports. Osteotech shall promptly advise Xxxxxx when
it has filed this Agreement with the SEC. Until such time as this Agreement is
filed with the SEC, Xxxxxx agrees not to discuss its terms and conditions with
anyone but his immediate family members, his attorney and/or his other outside
consultants or professionals who have a need to know the terms and conditions of
this Agreement, or as otherwise required by law. Xxxxxx agrees that the
disclosure by him or on his behalf, prior to the time this Agreement is filed
with the SEC, of the terms and conditions of this Agreement to anyone but his
immediate family members, his attorney and/or his other outside consultants or
professionals who have a need to know the terms and conditions of this Agreement
or as otherwise required by law shall entitle Osteotech to recover from Xxxxxx
all of the payments and other benefits provided to him under this Agreement
and/or to seek injunctive relief. However, nothing contained in this Agreement
shall be deemed to preclude Xxxxxx from truthfully testifying in response to an
order issued by a court of competent jurisdiction or a validly issued subpoena.
If Xxxxxx receives a validly issued subpoena or other judicial or quasi-judicial
request calling for the disclosure of the terms and conditions of this
Agreement, or any other information relating to Osteotech's business during the
period of his employment by Osteotech, Xxxxxx shall send copies of the subpoena,
demand or other request with any other accompanying materials by first class
mail and facsimile to Xx. Xxxxxxx X. Xxxxx or his successor at Osteotech. Xxxxxx
shall dispatch such copies promptly (i.e., no later than two days after his
receipt of such subpoena, demand or request and in no event later than the
return of the subpoena, demand or request).
12. Xxxxxx agrees that the benefits provided by this Agreement cannot
continue and will in fact terminate unless, by no later than February 15, 2002,
(a) a signed copy
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of this Agreement is delivered to Xx. Xxxxxxx X. Xxxxx, or his designee, and (b)
all Osteotech property in Xxxxxx'x possession is returned to Xx. Xxxxxxx X.
Xxxxx, or his designee.
13. Xxxxxx acknowledges and agrees that he has been given at least
twenty-one (21) days to consider this Agreement. Xxxxxx further acknowledges and
agrees that he may cancel or revoke this Agreement within seven (7) days after
signing it. To be effective, any notice of cancellation or revocation must be in
writing and delivered either by hand or mail within such seven (7) day period to
Xx. Xxxxxxx X. Xxxxx at Osteotech. If delivered by mail, the notice of
cancellation or revocation must be (a) post-marked within the seven (7) day
period; (b) properly addressed to Xx. Xxxxxxx X. Xxxxx, Osteotech, Inc., 00
Xxxxx Xxx, Xxxxxxxxx, Xxx Xxxxxx 00000; and (c) sent by certified mail, return
receipt requested. Xxxxxx acknowledges and agrees that, if he exercises his
right of cancellation or revocation, Osteotech shall be relieved of all
obligations undertaken in this Agreement.
14. The terms and conditions of this Agreement may not be altered, amended
or modified except by a writing duly executed by both Xxxxxx and Osteotech.
15. The terms and conditions of this Agreement are personal to Xxxxxx and
Osteotech and may not be assigned by either party to any person or entity
without the prior written consent of the other party. However, in the event of
Xxxxxx'x untimely death prior to November 15, 2002, the balance of such payments
shall be made to his wife, and, in the event of her untimely death, the balance
of such payments shall be made to Xxxxxx'x legal heirs. Neither Xxxxxx'x wife
nor heirs shall be entitled to receive any payments relating to the period
subsequent to November 15, 2002.
16. Except as otherwise stated herein, this Agreement contains the entire
understanding between Xxxxxx and Osteotech with respect to the termination of
Xxxxxx'x
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employment at Osteotech. There are no covenants, representations or
undertakings with respect to such termination other than those expressly set
forth or referenced in this Agreement.
17. If any portion of this Agreement is found by a court of competent
jurisdiction to be void and unenforceable, such portions shall be deemed to be
severable from the Agreement and shall have no effect on the remaining sections
of this Agreement.
18. This Agreement shall be governed and construed in accordance with the
laws of the State of New Jersey without regard to its choice of law or conflicts
of law rules.
19. This Agreement has been reviewed and negotiated by both Xxxxxx and
Osteotech, and no provision of this Agreement shall be construed against either
party on the ground that such party was the drafter of that provision or the
Agreement.
20. This Agreement shall be binding upon Xxxxxx and Osteotech upon its
execution by them and shall inure to the benefit of their respective heirs,
successors and permitted assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
dates set forth below.
OSTEOTECH, INC.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
-------------------------------- ------------------------------
Xxxxxxx X. Xxxxx, President XXXXXX X. XXXXXX
and Chief Executive Officer
Date: 2/18/02 Date: 2/1/02
-------------------------------- ---------------------------
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EXHIBIT A
Stock Option Agreement # 1178 for Xxxxxx X. Xxxxxx
Plan ID: 1991 Plan
Grant Date: October 1, 1999
Type: NQ
Price: $12.6250
Granted: 200,000 options
Vested: 100,000 options
Non-Vested: 100,000 options
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EXHIBIT B
Stock Option Agreement #1245 for Xxxxxx X. Xxxxxx
Plan ID: 2000 Plan
Grant Date: December 7, 2000
Type: ISO
Price: $3.5000
Granted: 100,000 options
Vested: 25,000 options
Non-Vested: 75,000 options
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