Exhibit 10.49
INTRAOP MEDICAL, INC.
October 29, 2008
Xx. Xxxxxx Xxxxxxx
Re: Separation and General Release Agreement
Dear Xxxxxx:
This letter sets forth the terms of the separation and general release agreement
(the "Agreement") between you and Intraop Medical, Inc. (the "Company").
1. Separation. Your last day of work with the Company and your employment
termination date will be October 31, 2008 (the "Separation Date"). Between the
date listed above and the Separation Date, you will continue to work on a
full-time basis, performing your regular and customary duties and all such other
duties that may be reasonably assigned to you. You will continue to abide by all
Company policies and procedures for the remainder of your employment with the
Company.
2. Accrued Salary and Vacation. On the Separation Date, the Company will pay you
all accrued base salary and all accrued and unused vacation earned through the
Separation Date, subject to standard payroll deductions and withholdings. You
are entitled to these payments regardless of whether or not you sign this
Agreement.
3. Expense Reimbursements. Within five (5) business days after the Separation
Date, you agree to submit to the Company your final expense reimbursement
statement reflecting all remaining business expenses incurred by you through the
Separation Date for which you seek reimbursement. The Company will reimburse all
reasonable documented business expenses incurred in accordance with its
governing expense reimbursement policies and procedures.
4. Severance Benefits. This termination of your employment is a "separation from
service" (within the meaning of Treasury Regulations Section 1.409A-1(h)). In
exchange for your entering into and abiding by the terms of this Agreement,
after the Separation Date, the Company will provide you with the severance
benefits described below.
(a) Cash Severance. The Company will pay you cash severance equal to up to
10 months of your last base salary, less applicable payroll deductions and
withholdings (the "Severance"), subject to offset as described below. The
Severance will be paid in the form of continuing base salary payments, paid on
the Company's customary payroll pay dates starting on the first practicable
payroll pay date after the Effective Date (as defined in paragraph 13 (ADEA
Waiver) below). On such first payroll pay date, the Company will pay you the
amount of the Severance that would have been paid to you on or prior to such
date in the ordinary course had the commencement of the payment of the Severance
not been delayed pending the effectiveness of this Agreement, with the balance
of the Severance payable thereafter on the Company's regular payroll schedule,
so that the Severance is paid not later than the date that is the first regular
payroll pay date on or after August 31, 2009. The Severance shall be reduced by
the amount of any and all cash compensation paid or payable to you for work
performed (whether as a self-employed person or as an employee or consultant of
any person or entity) during the 10 month period immediately after the
Separation Date (the "Severance Period"). You agree to notify the Company in
writing (sent to the attention of the Company's Chief Executive Officer (the
"CEO")) no later than five (5) days after you commence any work engagements
during the Severance Period, including the amount of compensation payable to you
for such work.
(b) Paid COBRA Premiums. To the extent provided by the federal COBRA law
or, if applicable, state insurance laws, and by the Company's current group
health insurance policies, you will be eligible to continue your group health
insurance benefits after the Separation Date at your own expense. (Later, you
may be able to convert to an individual policy through the provider of the
Company's health insurance, if you wish.) If you timely elect to continue your
group health insurance coverage pursuant to COBRA, as part of this Agreement and
as an additional severance benefit, the Company will pay on your behalf the
COBRA premiums necessary to continue your current level of health insurance
coverage (for yourself and any covered dependents) in effect until the earlier
of the last day of the Severance Period or until such earlier date as either (i)
you become eligible for health insurance benefits through a subsequent employer
or (ii) you and your covered dependents cease to be eligible for COBRA coverage.
You agree to notify the Company in writing (sent to the attention of the CEO) no
later than five (5) days after you become eligible for benefits through a
subsequent employer.
(c) Compliance with Section 409A. It is intended that each installment of
the payments and benefits provided for in this paragraph 4 (the "Severance
Benefits") is a separate "payment" for purposes of Treasury Regulation Section
1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that payments of
the amounts set forth in this paragraph 4 satisfy, to the greatest extent
possible, the exemptions from the application of Section 409A (any state law of
similar effect) provided under Treasury Regulations 1.409A-1(b)(4) and
1.409A-1(b)(9). However, if the Company determines that the Severance Benefits
provided under this Agreement constitute "deferred compensation" under Section
409A and you are, on the termination of your service, a "specified employee" of
the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code (a
"Specified Employee"), then, solely to the extent necessary to avoid the
incurrence of the adverse personal tax consequences under Section 409A, the
timing of the Severance Benefits that constitute deferred compensation shall be
delayed as follows: (i) on the earlier to occur of (A) the date that is six (6)
months and one day after your "separation from service" (as such term is defined
in Treasury Regulation Section 1.409A-1(h)) or (B) the date of your death (such
earlier date, the "Delayed Initial Payment Date"), the Company (or the successor
entity thereto, as applicable) shall (1) pay you a lump sum amount equal to the
sum of the Severance Benefits that you would otherwise have received through the
Delayed Initial Payment Date if the payment of the Severance Benefits had not
been so delayed pursuant to this paragraph 4(c) and (2) commence paying the
balance of the Severance Benefits in accordance with the applicable payment
schedules set forth in this Agreement.
5. Stock Options. You were granted a total of 1,881,698 options (the "Options")
to purchase shares of the Company's common stock pursuant to the Company's
governing equity incentive plan (the "Plan"). The Options will cease vesting on
the Separation Date, at which time a total of 1,318,608 shares subject to the
Options will be fully vested and exercisable. The remaining unvested shares
shall automatically lapse and terminate. All rights, duties and obligations with
respect to the Options (including your right to exercise any vested shares and
the applicable post-employment exercise period) shall be as set forth in the
Plan and in the written stock option agreements applicable to the Options.
6. Other Compensation or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive any additional compensation,
severance or benefits from the Company after the Separation Date.
7. Return of Company Property. By the Separation Date, you agree to return to
the Company all Company documents (and all copies thereof) and other Company
property that you have had in your possession at any time, including, but not
limited to, all Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
tangible property (including, but not limited to, computers), credit cards,
entry cards, identification badges and keys; and, any materials of any kind that
contain or embody any proprietary or confidential information of the Company
(and all reproductions thereof). Your compliance with the terms of this
paragraph is a condition precedent to receiving any severance benefits.
8. Proprietary Information.
(a) Confidential information. Until the Separation Date and for all times
thereafter, you agree to hold in confidence and not to disclose, use or publish
any of the Company's confidential and proprietary information (collectively,
"Confidential Information"), except as reasonably necessary for the performance
of your duties through the Separation Date or as expressly authorized in writing
by the CEO. For purposes of this Agreement, "Confidential Information" includes
all confidential knowledge, data or information related to the Company's
business or its actual or demonstrably anticipated research or development,
including without limitation (i) trade secrets, inventions, ideas, processes,
computer source and object code, data, formulae, programs, other works of
authorship, know-how, improvements, discoveries, developments, designs, and
techniques; (ii) information regarding products, services, plans for research
and development, marketing and business plans, budgets, financial statements,
contracts, prices, suppliers, and customers; (iii) information regarding the
skills and compensation of Company's employees, contractors, and any other
service providers of Company; (iv) the existence of any business discussions,
negotiations, or agreements between Company and any third party; and (v) any
confidential or proprietary information Company has received from third parties.
You hereby assign to Company any rights you may have in any and all Confidential
Information and recognize that all Confidential Information shall be the sole
and exclusive property of Company and its assigns.
(b) Client Data. You specifically acknowledge and agree that the Company's
client lists, as well as client names, contact information, and other
client-related data (collectively, "Client Data") is highly sensitive,
confidential and proprietary information of the Company which may be used only
as necessary for the performance of your authorized duties on behalf of the
Company and for no other purpose. Accordingly, you acknowledge and agree that
you will not disclose to or use on behalf of yourself or any third party
(including any future employer) any Client Data.
(c) Assignment of Inventions. Except for Inventions that you can prove
qualify fully under the provisions of California Labor Code section 2870, you
hereby assign to Company all your right, title, and interest in and to any and
all Inventions (and all Intellectual Property Rights with respect thereto) made,
conceived, reduced to practice, or learned by you, either alone or with others,
(i) during the period of your employment by Company or (ii) prior to your
employment by Company and intended by you to be used by the Company or
specifically made, conceived, reduced to practice, or learned by you for the
benefit of the Company. For purposes of this Agreement "Invention" means any
ideas, concepts, information, materials, processes, data, programs, know-how,
improvements, discoveries, developments, designs, artwork, formulae, other
copyrightable works, and techniques and all Intellectual Property Rights in any
of the items listed above, and "Intellectual Property Rights" means all trade
secrets, copyrights, trademarks, mask work rights, patents and other
intellectual property rights recognized by the laws of any jurisdiction or
country. Inventions assigned to the Company hereunder are referred to as
"Company Inventions".
(d) Assistance. You agree to assist Company in every proper way to obtain
and enforce United States and foreign Intellectual Property Rights relating to
Company Inventions in all countries. If the Company is unable to secure your
signature on any document needed in connection with such purposes, you hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as your agent and attorney in fact, which appointment is coupled with
an interest, to act on your behalf to execute and file any such documents and to
do all other lawfully permitted acts to further such purposes with the same
legal force and effect as if executed by you.
(e) Other Agreements. The terms set forth in this paragraph 8 (Proprietary
Information) shall be in addition to any other non-disclosure, confidentiality,
proprietary information, and inventions assignment agreements entered into by
you for the benefit of the Company, including that certain Non-Disclosure
Agreement between you and the Company dated July 29, 2002 (the "Confidentiality
Agreement"); provided, however, that in the event of any conflict between the
terms of such other agreements and the terms of this Agreement, this Agreement
shall be controlling.
9. Non-Interference.
(a) Non-Solicitation. For the remainder of your employment and continuing
for 12 months after the Separation Date, you agree that you shall not directly
or indirectly, solicit, induce or encourage any Company employee, agent or
consultant to terminate his, her or its relationship with the Company.
(b) Non-Disruption. For the remainder of your employment and continuing
after the Separation Date, you must not: (a) take any action to disrupt, damage
or interfere with the Company's contractual relationships with its clients,
employees, consultants, agents or vendors, or induce any person or entity to
breach any contractual obligation owed to the Company; or (b) engage in any
unlawful or improper activity to disrupt, damage or interfere with Company's
business, operations or activities.
10. Notification. You understand and agree that the Company may communicate your
obligations under paragraph 8 (Proprietary Information) and paragraph 9
(Non-Interference) of this (and may provide a copy of this Agreement) to any
future employer or other third party, as the Company deems necessary or
appropriate to protect its interests. You further agree that, if, within 18
months of the Separation Date, you accept employment with any entity that, at
the time, is directly competitive with the Company, you will notify the Company
of that fact in writing (sent to the attention of the CEO), including the name
and location of such new employer. Nothing in this Agreement shall prevent you
from competing with the Company or accepting an position with a competitor of
the Company, subject to your continuing obligations hereunder.
11. Non-disparagement. You and the Company (through its officers and directors)
agree not to disparage each other or the other's officers, directors, employees,
shareholders, parents, subsidiaries, affiliates, and agents, in any manner
likely to be harmful to his, it or their business, business reputation or
personal reputation; provided that both parties may respond accurately and fully
to any question, inquiry or request for information when required by legal
process.
12. Release of Claims.
(a) General Release. In exchange for the severance benefits and other
consideration to be provided to you under this Agreement that you are not
otherwise entitled to receive, you hereby generally and completely release the
Company, the Company's co-employer, TriNet Corporation, and the Company's
predecessors, successors, subsidiaries and affiliated entities (collectively,
the "Company Parties") and each of the Company Parties' current and former
directors, officers, employees, shareholders, partners, agents, attorneys and
assigns from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct,
or omissions occurring prior to your signing this Agreement. This general
release includes, but is not limited to: (i) all claims arising out of or in any
way related to your employment with the Company, your activities as an employee
and/or officer of the Company, and the termination of your employment
relationship with the Company; (ii) all claims related to your compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or
any other ownership interests in the Company; (iii) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good faith
and fair dealing; (iv) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy; and (v) all
federal, state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys' fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) ("ADEA"), the California Fair Employment and Housing Act (as
amended), and the California Labor Code.
(b) Exceptions. Notwithstanding the foregoing, you are not releasing: (i)
any rights you have under this Agreement; (ii) any rights that you have to be
indemnified arising under applicable law, the certificate of incorporation or
by-laws (or similar constituent documents of the Company), any indemnification
agreement between you and the Company, or any directors' and officers' liability
insurance policy of the Company; or (iii) any claim that cannot be waived under
applicable state or federal law. Nothing in this Agreement shall prevent you
from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission, the Department of Labor, or the
California Department of Fair Employment and Housing, except that you
acknowledge and agree that you shall not recover any monetary benefits in
connection with any such claim, charge or proceeding with regard to any claim
released herein.
13. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving
and releasing any rights you may have under the ADEA ("ADEA Waiver"). You also
acknowledge that the consideration given for this ADEA Waiver is in addition to
anything of value to which you were already entitled. You further acknowledge
that you have been advised by this writing, as required by the ADEA, that: (a)
your ADEA Waiver does not apply to any rights or claims that arise after the
date you sign this Agreement; (b) you should consult with an attorney prior to
signing this Agreement; (c) you have 21 days to consider this Agreement
(although you may choose to voluntarily sign it sooner); (d) you have seven (7)
days following the date you sign this Agreement to revoke it, with such
revocation to be effective only if you deliver written notice of revocation to
the Company within the seven (7) day period; and (e) the ADEA Waiver will not be
effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after you sign this Agreement
("Effective Date").
14. Section 1542 Waiver. YOU UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS. In giving the release herein, which includes
claims which may be unknown to you at present, you acknowledge that you have
read and understand Section 1542 of the California Civil Code, which reads as
follows:
"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."
You hereby expressly waive and relinquish all rights and benefits under that
section and any law of any other jurisdiction of similar effect with respect to
your release of any unknown or unsuspected claims herein.
15. Representations. You hereby represent that, except as expressly provided in
this Agreement, you have been paid all compensation owed and for all hours
worked for the Company, have received all the leave and leave benefits and
protections for which you are eligible, pursuant to the Family and Medical Leave
Act or otherwise, and have not suffered any on-the-job injury for which you have
not already filed a claim.
16. Arbitration. You and the Company agree that any and all disputes, claims, or
causes of action, in law or equity, arising from or relating to the enforcement,
breach, performance, execution or interpretation of this Agreement shall be
resolved, to the fullest extent permitted by law, by final, binding and
confidential arbitration in San Jose, California before a single arbitrator with
Judicial Arbitration and Mediation Services, Inc. ("JAMS") or its successor,
conducted pursuant to the JAMS Employment Arbitration Rules and Procedures then
in effect. You and the Company acknowledge that by agreeing to this arbitration
procedure, both parties waive the right to resolve any such dispute through a
trial by jury or judge or administrative proceeding. The arbitrator shall: (a)
have the authority to compel adequate discovery for the resolution of the
dispute and to award such relief as would otherwise be permitted by law; and (b)
issue a written arbitration decision including the arbitrator's essential
findings and conclusions and a statement of the award. The arbitrator shall be
authorized to award any or all remedies that the parties would be entitled to
seek in a court of law. The Company shall pay all JAMS' arbitration fees
(including arbitrator fees and administrative fees, but excluding attorneys fees
and costs incurred by you in connection with the arbitration). Nothing herein
shall prevent either party from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any arbitration brought pursuant to
this paragraph.
17. General. This Agreement, together with the Confidentiality Agreement,
constitutes the complete, final and exclusive embodiment of the entire agreement
between you and the Company with regard to this subject matter. It is entered
into without reliance on any promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other such
promises, warranties or representations, including those set forth in your
Employment Agreement with the Company dated December 15, 2002. This Agreement
may not be modified or amended except in a writing signed by you and the CEO.
This Agreement will bind the heirs, personal representatives, successors and
assigns of both you and the Company, and inure to the benefit of both you and
the Company, their heirs, successors and assigns. If any provision of this
Agreement is determined to be invalid or unenforceable, in whole or in part,
this determination will not affect any other provision of this Agreement and the
provision in question will be modified by the arbitrator or court so as to be
rendered enforceable to the fullest extent permitted by law, consistent with the
intent of the parties. This Agreement will be deemed to have been entered into
and will be construed and enforced in accordance with the laws of the State of
California as applied to contracts made and to be performed entirely within
California.
To accept this Agreement, please sign below and return the original to me. You
have 21 days from the date of this Agreement to return the fully-signed
Agreement to me. If we do not receive the fully-signed Agreement from you by
that date, the offer of severance benefits contained herein shall automatically
lapse and terminate.
We wish you good luck in your future endeavors.
Sincerely,
INTRAOP MEDICAL, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxx, President and CEO
UNDERSTOOD AND AGREED:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
10/29/2008
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Date
1106792 v3/SF
