SEPARATION AGREEMENT
Exhibit
10.1
This
Separation Agreement (the “Agreement”) is entered into by and between Xxxxxx X.
Xxx (“Xxx”) and Apricus Biosciences, Inc. and its affiliates and subsidiaries
(collectively, the “Company”).
BACKGROUND:
X. Xxx
was employed as the Company’s Executive Vice President pursuant to that certain
Amended and Restated Employment Agreement by and between the Company and Liu,
dated as of December 14, 2009 (the “Prior Agreement”) and served as the Chairman
of the Company’s Board of Directors.
B. The
Company and Liu wish to enter into this Agreement to set forth the terms of
Liu’s separation from the Company, effective December 31, 2010 (the “Separation
Date”).
C. Upon
entry into this Agreement, Liu shall simultaneously tender her resignation as an
officer and director of the Company.
AGREEMENT:
In
consideration for the promises to Liu from the Company recited below, and other
good and valuable consideration, including the release of claims pursuant to
this Agreement, the parties agree as follows:
1. Liu Payment and
Release. By the later of (a) January 11, 2011 or (b) five business days
following the expiration of Liu’s seven-day revocation period set forth in
Section 7.b. below, the Company shall provide to Liu company stock with a value
of $165,000 (valued at the fair market value of the stock on the Separation
Date) as consideration hereunder (the “Additional Stock”). Liu
acknowledges that she is not otherwise entitled to receive such consideration.
It is agreed that some or all of the stock provided above as consideration under
this Agreement is paid in settlement of any potential claim by Liu to any Bonus,
as defined in the Prior Agreement, and that Liu accordingly has no separate or
future right to any such Bonus. Pursuant to the Prior Agreement, and
notwithstanding whether Liu signs this Agreement, the Company shall also pay to
Liu (a) any accrued but unpaid Base Salary (as defined in the Prior Agreement),
less applicable deductions, including salary in respect of any accumulated
vacation, due to Liu as of the Separation Date, (b) any amounts owing, but not
yet paid, with respect to reasonable business expenses incurred by Liu, subject
to documentation in accordance with the Company’s policy, (c) the Incentive
Bonus (as defined in the Prior Agreement) of $50,000 payable in cash and 7,540
shares of company common stock (valued at $50,000 based upon the closing sales
price of the company common stock on the approval date of the Incentive Bonus)
due to Liu as of the Separation Date, and (d) the annual grants of common stock
pursuant to Section 3(d)(i) and Section 3(d)(ii) of the Prior Agreement, which
grants shall be made as of the Separation Date. All of Liu’s
outstanding but unvested equity awards granted pursuant to Sections 3(c) and
3(d) of the Prior Agreement, including the awards to be issued as of the
Separation Date under clause (d) of the prior sentence, shall vest immediately
upon the expiration of Liu’s seven-day revocation period set forth in Section
7.b. below.
Except
for the Additional Stock, and in consideration for such Additional Stock, Liu
for herself and her heirs, agents, assigns, executors, successors and each of
them, voluntarily releases and forever discharges the Company, its affiliated
and released entities (including, without limitation, the Company’s parent and
subsidiary entities), its and their respective predecessors, successors and
assigns, its and their respective employee benefit plans and fiduciaries of such
plans, and the current and former officers, directors, shareholders, employees,
attorneys, accountants and agents of each of the foregoing in their official and
personal capacities (collectively referred to as the “Releasees”) generally from
all claims, demands, debts, damage and liabilities of every name and nature,
known or unknown (“Claims”) that, as of the date when Liu signs this Agreement,
Liu ever had, now claims to have or ever claimed to have had against any or all
of the Releasees; provided,
however, that Liu shall not be deemed to release any Claims relating to
any rights provided under this Agreement.
This
Agreement includes, without limitation, all Claims: relating to the Prior
Agreement, Liu’s employment with the Company and the termination of Liu’s
employment; of wrongful discharge; of breach of contract; of retaliation or
discrimination under federal, state or local law, including, but not limited to,
Claims of discrimination or retaliation under Title VII of the Civil Rights Act
of 1964, Claims of disability discrimination or retaliation under the Americans
with Disabilities Act, Claims of discrimination or retaliation under the
California Fair Employment and Housing Act; Claims under the Age Discrimination
in Employment Act or Older Workers Benefit Protection Act; Claims under other
federal or state statutes; of defamation or other torts; of violation of public
policy; for wages, bonuses, incentive compensation, stock, stock options,
warrants, vacation pay or any other compensation or benefit; and for damages or
other legal or equitable remedies of any sort, including, without limitation,
compensatory damages, punitive damages, indirect damages, injunctive relief and
attorney’s fees. Notwithstanding the foregoing, Liu does not release
(a) any rights that cannot be waived, including, without limitation, her right
to indemnity pursuant to California Labor Code Section 2802; (b) her right to
future indemnity pursuant to the Company’s bylaws and Nevada corporation law;
and (c) her rights arising solely as a stockholder of the Company.
Liu
acknowledges that she is familiar with Section 1542 of the California Civil
Code, which reads as follows:
California Civil Code
Section 1542
“A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor
at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”
Liu
agrees that she is releasing unknown claims and waiving all rights that she may
have under Section 1542 of the Civil Code of California or under any statute or
common law principle of similar effect.
2. Mutual
Non-Disparagement.
(a) Liu
agrees that she will not make any written or oral communications that could
reasonably be considered to be disparaging of the Company in any respect,
including, but not limited to, the Company’s business, technology, products,
executives, officers, directors, former executives, consultants or
agents.
(b) The
Company agrees that its directors and officers will not make any written or oral
communications that could reasonably be considered to be disparaging of Liu in
any respect.
3. Resignation. Liu
hereby resigns as an employee and director of the Company, effective December
31, 2010.
4. Negotiation of
Agreement. This Agreement was negotiated for Liu by a representative of
her own choosing. Liu has had an opportunity to negotiate this Agreement with
the Company; accordingly, there shall be no presumption that drafting
ambiguities shall be construed against either party as the drafter. Both the
Company and Liu are voluntarily agreeing to this Agreement. It is agreed that
the payments under this Agreement are not an admission of any liability or
obligation.
5. Understanding of Agreement;
Entire Agreement. Liu expressly states that she has read this Agreement
and understands all of its terms, that the preceding paragraphs recite the sole
consideration for this Agreement, and that this Agreement constitutes the entire
agreement with respect to any matters referred to in it. This Agreement
supersedes any and all other agreements between Liu and the Company regarding
Liu’s employment and the terms of separation, including the Prior Agreement.
This Agreement may only be amended in writing signed by Liu and an officer of
the Company, and it is executed voluntarily and with full knowledge of its
significance.
6. Review and Revocation
Periods.
(a) Liu
has the opportunity to consider this Agreement for twenty-one days before
signing it. To accept this Agreement, Liu must return a signed original of this
Agreement so that it is received by the undersigned at or before the expiration
of this twenty-one day period. If Liu signs this Agreement within less than
twenty-one days of the date of its delivery to Xxx, Xxx acknowledges by signing
this Agreement that such decision was entirely voluntary and that Liu had the
opportunity to consider this Agreement for the entire twenty-one day period. Liu
is advised to consult with an attorney before signing this
Agreement.
(b) For
the period of seven days from the date when this Agreement is signed by Xxx, Xxx
has the right to revoke this Agreement solely with respect to claims released
under the Age Discrimination in Employment Act or Older Workers Benefit
Protection Act; any such revocation shall be effected by written notice to the
Company’s Chief Executive Officer. For such a revocation to be effective, it
must be delivered so that it is received by the undersigned at or before the
expiration of the seven-day revocation period. This Agreement shall become
effective on the first business day following the expiration of the revocation
period.
7. Return of Property.
Liu confirms that, to the best of her knowledge, she has returned or, no later
than the Separation Date, will return to the Company all Company property,
including, without limitation, computer equipment, software, keys and access
cards, credit cards, files and any documents (including computerized data and
any copies made of any computerized data or software) containing information
concerning the Company, its business or its business relationships (in the
latter two cases, actual or prospective). Liu also commits to deleting and
finally purging any duplicates of files or documents that may contain Company
information from any computer or other device that remains her property after
the Separation Date. In the event that Liu discovers that she
continues to retain any such property, she shall return it to the Company
immediately.
8. Legal Representation.
This Agreement is a legally binding document and Liu’s signature will commit her
to its terms. Liu acknowledges that she has been advised to discuss
all aspects of this Agreement with her attorney, that she has carefully read and
fully understand all of the provisions of this Agreement and that she is
voluntarily entering into this Agreement.
9. Absence of Reliance.
In signing this Agreement, Liu is not relying upon any promises or
representations made by anyone at or on behalf of the Company, except as may be
set forth in this Agreement.
10. Enforceability. If
any portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
11. Waiver. No waiver of
any provision of this Agreement shall be effective unless made in writing and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
12. Governing Law;
Interpretation. This Agreement shall be interpreted and enforced under
the laws of the state of California, without regard to conflict of law
principles. In the event of any dispute, this Agreement is intended
by the parties to be construed as a whole, to be interpreted in accordance with
its fair meaning, and not to be construed strictly for or against either you or
the Company or the “drafter” of all or any portion of this
Agreement.
13. Attorneys’ Fees and
Costs. In the event that either party brings an action to enforce or
effect its rights under or relating to this Agreement, the prevailing party
shall be entitled to recover its costs and expenses, including the costs of
mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees
incurred in connection with such an action.
14. Employee Confidentiality and
Assignment Agreement. Liu acknowledges and agrees that she is bound by
and will comply with the Employee Confidentiality and Assignment Agreement that
she has signed with the Company. That Employee Confidentiality and
Assignment Agreement shall remain in full force and effect to the extent not
inconsistent with this Agreement.
15. Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be taken to be an original, but all of which
together shall constitute one and the same document.
16. Address and Contact
Information. The following addresses (which may be changed through
written notice by the parties) shall be used for notices:
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Attn:
Chief Executive Officer
0000
Xxxxx Xxxxx Xx., Xxxxx 000
Xxx
Xxxxx, XX 00000
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With a copy to:
Xxxxxxx
Procter LLP
Attn:
Xxxx Xxxx, Esq.
Three
Xxxxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
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[signature page
follows]
In witness whereof, the parties have
signed this Separation Agreement as of the date(s) set forth below.
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Dated: December
16, 2010
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Xxxxxx
X. Xxx
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/s/
Xxxxxx X. Xxx
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Dated: December
16, 2010
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By:
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/s/
Xxxxxx Xxxxx
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Xxxxxx
Xxxxx
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Chief
Executive Officer
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