CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 99.1
This CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE (this “Agreement”) is entered into
effective the 15th day of April 2008, by and between Xxxxx X. Xxxxxx (hereinafter “XX.
XXXXXX”), NUCRYST Pharmaceuticals Inc., a Delaware Corporation, and NUCRYST Pharmaceuticals Corp.,
an Alberta corporation (hereinafter collectively referred to as “NUCRYST”).
WHEREAS, XX. XXXXXX has been employed by NUCRYST in the Commonwealth of Massachusetts pursuant
to terms of employment set forth in that certain Offer of Employment, made by NUCRYST
Pharmaceuticals Inc. dated March 16, 2005 and accepted by XX. XXXXXX on March 17, 2005, as amended
by letter agreement date January 17, 2008, between NUCRYST Pharmaceuticals Inc. and XX. XXXXXX (the
“Employment Agreement”); and
WHEREAS, XX. XXXXXX executed an Employee Confidentiality Agreement (the “Confidentiality
Agreement”), dated as of March 17, 2005 made by and between XX. XXXXXX and NUCRYST Pharmaceuticals
Inc.; and
WHEREAS, the Confidentiality Agreement contains post-employment obligations and restrictions;
and
WHEREAS, NUCRYST and XX. XXXXXX desire to terminate amicably XX. XXXXXX’X employment with
NUCRYST; and
WHEREAS, XX. XXXXXX is entitled to certain amounts and benefits provided in his Employment
Agreement upon the termination of his employment in the absence of this Agreement; and
WHEREAS, in this Agreement, in consideration of the mutual promises contained herein, NUCRYST
has offered XX. XXXXXX certain separation payments and benefits in lieu of, and greater than, the
amounts and benefits provided under the Employment Agreement;
IT IS HEREBY AGREED by and between XX. XXXXXX and NUCRYST as follows:
1. The following provisions describe the termination of XX. XXXXXX’X employment with NUCRYST
and the transition of his duties and responsibilities:
a. XX. XXXXXX acknowledges and agrees that his employment with NUCRYST will be permanently and
irrevocably severed, effective April 15, 2008 (“Termination Date”), and that NUCRYST has no
obligation, contractual or otherwise, to hire, rehire or re-employ XX. XXXXXX in the future. The
Termination Date shall be the date of the “qualifying event” under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) and, except as detailed in this Agreement, XX. XXXXXX’X
eligibility to participate in NUCRYST’S benefits programs ends on the Termination Date. XX. XXXXXX
will receive wages for all work performed by him from the last pay period prior to April 15, 2008
through the Termination Date, and all unused vacation pay, if any, less any applicable payroll
withholdings, in a paycheck to be issued to him on April 15, 2008. XX. XXXXXX’X rights and
obligations with regard to any vested Options and/or vested Restricted Stock Options he may have as
of the Termination Date, including his right to exercise any of those vested Options and/or
Restricted Stock Options after the Termination Date, shall be governed by the terms and conditions
set forth in: the Stock Option Agreement, executed by XX. XXXXXX on April 5, 2005(the “2005 Option
Agreement”); the Stock Option Agreement, executed by XX. XXXXXX on May 15, 2007 (the “2007 Option
Agreement”); and, the Restricted Stock Unit Award Agreement, executed by XX. XXXXXX on May 15, 2007
(the “RSU Agreement”). For the purposes of XX. XXXXXX’X right to exercise any of those vested
Options and/or Restricted Stock Options, the provisions relating to termination for reasons other
than Just Cause shall apply.
b. XX. XXXXXX agrees that for the two (2) month period of time commencing on his Termination
Date and continuing to June 15, 2008 (the “Transition Period”), he will use good faith, reasonable
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efforts to achieve an orderly transition of his duties, that he will cooperate with NUCRYST’S
transition efforts and that he will make himself available as requested by NUCRYST for consultation
with NUCRYST regarding matters which arise out of or relate to his duties and responsibilities with
NUCRYST (the “Transition Services”). For greater certainty, XX. XXXXXX acknowledges and agrees
that he shall continue to be bound by the Confidentiality Agreement in all respects including,
without limitation, in respect of all Proprietary Information (as that term is defined in the
Confidentiality Agreement) received by or disclosed to XX. XXXXXX by or on behalf of NUCRYST during
the Transition Period and thereafter.
2. XX. XXXXXX, on behalf of himself, his heirs, executors, administrators and assigns, for and
in consideration of the undertakings of NUCRYST set forth herein, and intending to be legally
bound, does hereby release and forever discharge NUCRYST and The Westaim Corporation, together with
their parent and subsidiaries, affiliates, predecessor and successor corporations and business
entities, joint ventures, and partners, past, present and future, and its and their agents,
directors, officers, employees, stockholders, investors, insurers and reinsurers, assigns,
representatives, and attorneys, past, present and future, and its and their assigns, heirs,
executors, and administrators, past, present, and future (collectively, the “Releasees”), jointly
and severally, of and from and with respect to any and all legally waivable causes of action,
suits, debts, contracts, covenants, agreements, promises, torts, damages, claims, complaints,
demands and liabilities, indemnity, costs, interest, loss or injury whatsoever of any name, kind
and nature, both in law and in equity whether expressed or implied, suspected or unsuspected,
howsoever arising (hereinafter “Claims”), which XX. XXXXXX, or his heirs, executors, administrators
and assigns, may heretofore have had, may now have, ever had, or may in the future have against
each or any of the Releasees by reason of any matter, cause or thing whatsoever arising at any time
prior to and up to and including the effective date of the signing of this Agreement, including,
without limitation, any and all Claims relating to XX. XXXXXX’X employment with NUCRYST or the
termination of that employment, the discipline of XX. XXXXXX by the Releasee, the compensation for
and working conditions of that employment, including, but not limited to, Claims under the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil
Rights Act of 1964, Section 1981 of the Civil Rights Act of 1870, the Americans with Disabilities
Act, the Family Medical Leave Act, the Employee Retirement Income Security Act, M.G.L. c. 151B, and
any and all other federal, state or local statutory or common law Claims, now or hereafter
recognized, including but not limited to, any Claims for economic loss, compensatory damages,
punitive damages, liquidated damages, costs, fees, or other expenses including attorney’s fees
incurred in these matters, any Claims concerning wages, lost pay, discretionary pay, benefits,
bonuses or variable pay under the Releasee’s variable pay program or any gratuitous payments
promised by the Releasee. Notwithstanding the foregoing, this release shall not apply to any
vested rights to retirement, pension, 401(k) plan, or like benefits to which XX. XXXXXX is
otherwise entitled as of April 15, 2008.
3. XX. XXXXXX acknowledges and agrees that in the absence of this Agreement, upon the
Termination Date he would be solely entitled to the amounts and benefits provided for under the
terms of the Employment Agreement. In lieu of the amounts and benefits provided under the
Employment Agreement, and in full consideration of XX. XXXXXX’X execution of this Agreement, and
his agreement to be legally bound by its terms, NUCRYST agrees to make the following payments and
fulfill the following promises after receipt by NUCRYST of XX. XXXXXX’X signature on this
Agreement, and after the expiration of the revocation period set forth in paragraph 13(e) when this
Agreement becomes final and binding:
(a) pay XX. XXXXXX a lump sum payment of $85,500.00, less applicable tax withholding and
deductions within thirty (30) days after the expiration of the revocation period set forth in
paragraph 13(e);
(b) pay XX. XXXXXX the lump sum amount of $1,000.00, less applicable tax withholding and
deductions, on June 30, 2008 provided that XX. XXXXXX fulfills his promises and obligations as set
forth in paragraph 1(b) herein with regard to the Transition Period, as well his other undertakings
in this Agreement, including but not limited to his continuing obligation to abide by the
post-employment obligations and restrictions contained in the Confidentiality Agreement; XX. XXXXXX
understands and agrees that he will not be entitled to receive the payment set forth in this
paragraph 3(b) if he fails to fulfill his promises and obligations as set forth in paragraph 1(b)
herein with regard to the Transition Period, as well his other undertakings in this Agreement,
including but not limited to his continuing post-employment obligations and restrictions contained
in the Confidentiality Agreement;
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(c) pay the employer’s portion of XX. XXXXXX’X COBRA premium payments incurred by XX. XXXXXX
in connection with his group medical insurance coverage for the month of May, 2008; provided that
XX. XXXXXX elects to continue his group medical insurance coverage pursuant to COBRA and executes
this Agreement;
(d) permit XX. XXXXXX to remain covered during the Transition Period by NUCRYST’S directors
and officers liability insurance policy; and
(e) allow Xx. XXXXXX to convert to a personal policy any disability or life insurance policies
that are so convertible, in accordance with the terms of such policies, provided that XX. XXXXXX
shall be responsible for any premiums and conversion costs that may be due on such policies after
the Termination Date.
4. XX. XXXXXX represents that he has returned all property of NUCRYST including, but not
limited to, keys, files, records (and copies thereof), computer hardware and software, cellular
phones, pagers, which are in his possession or control, with the sole exceptions that XX. XXXXXX
may purchase his desktop computer NUCRYST at current market value agreed to by the parties after
any and all NUCRYST information or data has been permanently removed from such computer. XX.
XXXXXX further agrees to leave intact all electronic documents of NUCRYST, including those which he
developed or helped to develop during his employment. XX. XXXXXX represents and agrees that after
the Termination Date, he will continue to abide by the post-employment obligations and restrictions
set forth in the Confidentiality Agreement, and that his obligations under the Confidentiality
Agreement survive the termination of his employment for NUCRYST.
5. Except as expressly set forth in paragraphs 1(a) and 3 of this Agreement, XX. XXXXXX
expressly agrees that he has been paid all remuneration owed to him by NUCRYST or Releasees as a
result of his employment with NUCRYST, the termination of that employment, the termination of the
Employment Agreement, or for any other reason, including but not limited to all accrued salary,
wages, perquisites, variable pay, vacation pay, bonus pay, profit-sharing, stock options,
restricted stock award units, stock, expenses, termination benefits, special incentive payments, or
any other compensation, with the sole exception of any accrued benefits under any qualified
retirement plan maintained by NUCRYST in which XX. XXXXXX has participated, and that NUCRYST and
Releasees do not have, and will not have, any obligation to provide XX. XXXXXX at any time in the
future with any other payments, benefits, or consideration.
6. Except as expressly set forth herein, the parties hereto acknowledge that the undertakings
of each of the parties herein are expressly contingent upon the fulfillment and satisfaction of the
obligations of the other party as set forth herein.
7. XX. XXXXXX acknowledges and agrees that this Agreement is not and shall not be construed to
be an admission of any violation of any federal, state or local statute, regulation or law, or of
any duty owed by Releasees to XX. XXXXXX, or of any wrongdoing to XX. XXXXXX by Releasees, and that
this Agreement is made voluntarily to provide an amicable conclusion of his employment relationship
with NUCRYST.
8. XX. XXXXXX agrees, covenants and promises to keep the terms of this Agreement confidential
and not to take any steps to publicize the fact or terms of this Agreement, even if this Agreement
is disclosed by NUCRYST as part of its reporting obligations. XX. XXXXXX represents that he has
not communicated or disclosed, and will not hereafter communicate, discuss or disclose, the terms
of this Agreement to any persons except, as he may be required by local, state or federal law or
regulation or by compulsory process of law, and provided that in case of such requirement he shall
notify NUCRYST within forty-eight (48) hours of such requirement in writing, and except for
disclosures to members of his immediate family, his attorney, and his accountant or tax advisor,
each of whom shall be informed of this confidentiality obligation and shall agree to be bound by
its terms.
9. Except as may reasonably be required to carry out any Transition Services requested by
NUCRYST during the Transition Period, XX. XXXXXX agrees and covenants that without the written
consent of the Chairman of the Board of NUCRYST, or by written invitation by a member of the board
of directors, XX. XXXXXX will not enter upon or otherwise gain access to NUCRYST’s physical
properties or databases after the Termination Date. XX. XXXXXX further covenants that he will not
take any other action which has the intent or effect of bringing harm to NUCRYST, its businesses,
properties, management, directors or affiliates. Without limiting the
foregoing, XX. XXXXXX agrees not to interfere in any manner with NUCRYST’s relationships with
its customers, suppliers, stockholders or employees.
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10. XX. XXXXXX agrees and covenants not to disparage or to make any statement reflecting
negatively on NUCRYST or any other Releasee, or any product or service offered by NUCRYST or
Releasees, publicly or privately. For purposes of this paragraph 10, NUCRYST shall mean NUCRYST
and any person or entity, which is a subsidiary of, controlling or controlled by or under common
control with NUCRYST. Nothing in this paragraph shall preclude XX. XXXXXX or NUCRYST from
communicating or testifying truthfully to the extent expressly required or protected by law, as a
party in litigation, by the proper inquiry of a state or federal governmental agency, by a subpoena
to testify issued by a court of competent jurisdiction, or in any action to enforce the terms of
this Agreement. Nothing in this paragraph shall preclude any communications internal to NUCRYST,
nor shall this Paragraph preclude NUCRYST or XX. XXXXXX from communicating in confidence to its or
his attorneys, who shall be informed of this confidentiality obligation and shall be bound by its
terms.
11. This Agreement constitutes the entire agreement between XX. XXXXXX and NUCRYST with
respect to the subject matter hereof and supersedes and replaces any and all prior agreements or
understandings, whether written or oral, between the parties, including the Employment Agreement,
except that XX. XXXXXX’X Confidentiality Agreement, 2005 Option Agreement, 2007 Option Agreement,
and RSU Agreement, continue in force and effect and shall survive the termination of the Employment
Agreement and the termination of XX. XXXXXX’X employment according to their respective terms. XX.
XXXXXX acknowledges that neither NUCRYST, Releasees, nor their directors, employees, agents or
attorneys, have made any promise, representation or warranty whatsoever, express or implied,
written or oral, other than the express written representations herein. This Agreement may not be
altered, amended, modified, or otherwise changed in any respect except by another written agreement
signed by both XX. XXXXXX and NUCRYST.
12. XX. XXXXXX acknowledges that breach by him of any of the covenants or provisions set forth
herein, including a breach of his obligations under the Confidentiality Agreement, would cause
NUCRYST severe and irreparable harm. Accordingly, in the event of an actual or threatened breach
by XX. XXXXXX of any of the covenants or provisions set forth herein, in the Confidentiality
Agreement, NUCRYST will be entitled to seek an injunction restraining XX. XXXXXX from violating
such covenants or provisions without the posting of a bond. The seeking of any such injunction
shall not affect NUCRYST’S right to seek and obtain damages on account of any such actual or
threatened breach of the covenants or provisions of this Agreement or the Confidentiality
Agreement. XX. XXXXXX also shall be responsible to pay the costs and expenses to NUCRYST,
including attorneys’ fees, arising out of the commission by XX. XXXXXX of any breach of said
covenants.
13. XX. XXXXXX hereby certifies that:
(a) he has read the terms of this Agreement, and that he understands its terms and effects,
including the fact that he has agreed to release and forever discharge Releasees from any legal
action arising out of his employment relationship with NUCRYST, the terms and conditions of that
employment relationship, and the termination of that employment relationship;
(b) he has signed this Agreement voluntarily and knowingly in exchange for the consideration
described herein, which he acknowledges is adequate and satisfactory to him;
(c) the payments, benefits, promises and undertakings performed, and to be performed, as set
forth in this Agreement exceed and are greater than the payments and benefits, if any, to which he
would have been entitled had he not executed this Agreement;
(d) he has been informed that he has twenty-one (21) calendar days to consider whether or not
to sign this Agreement, and has signed on the date indicated below after concluding that this
Agreement is satisfactory; if XX. XXXXXX elects not to take the full twenty-one (21) days to
consider this Agreement, he agrees that he has done so knowingly, voluntarily, and with full
understanding that he is waiving a statutory right to consider this Agreement for twenty-one (21)
days;
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(e) he has been informed that he has the right to revoke this Agreement for a period of seven
(7) calendar days following his execution of this Agreement by giving written notice to NUCRYST to
the attention of Chairman and Chief Executive Officer, NUCRYST Pharmaceuticals Corp., 00 Xxxxxxx
Xxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, and that this Agreement shall not be effective,
enforceable, final or binding until this seven (7) day period has expired;
(f) he understands and agrees that if he revokes this Agreement, pursuant to paragraph 13(e),
that NUCRYST shall have no obligation to provide XX. XXXXXX with any of the payments or benefits
provided in paragraph 3 of this Agreement other than the amounts that would be required per the
terms of his Employment Agreement, and that no other payments or benefits will be provided in lieu
of such; and
(g) he has been and is hereby advised by NUCRYST to consult with an attorney prior to signing
this Agreement, and he has in fact done so with his counsel of choice.
14. XX. XXXXXX represents and warrants that he has not filed any complaints, claims, charges
or lawsuits against any of the Releasees with any governmental agency or any court and that he will
not do so any time hereafter. To the extent permitted by applicable law, XX. XXXXXX further agrees
that he will not recommend or suggest to any federal, provincial or local government agency or
potential claimants against or employees of Releasee that they initiate any claim or lawsuit
against the Releasee and XX. XXXXXX will not voluntarily aid, assist or cooperate with any
claimants against or employees of the Releasee in bringing such claims and lawsuits. If any agency
or court assumes jurisdiction of any complaint or charge against Releasees on behalf of XX. XXXXXX,
or any class of which he may be a member, he shall request the agency or court to withdraw from the
matter insofar as it affects him. Additionally, he shall not in any way benefit financially from
any litigation brought or conducted by such agency or court and shall take all reasonable steps
necessary to refuse any compensation in connection with any damages claimed in connection
therewith. Nothing in this paragraph shall be construed to prevent XX. XXXXXX from giving truthful
testimony in response to direct questions asked pursuant to a lawful subpoena or other legal
process during any future legal proceeding involving Releasees.
15. This Agreement shall be governed, interpreted and enforced by and under the laws of the
Commonwealth of Massachusetts, without regard to choice of law principles, except where federal law
controls. This Agreement shall be enforced by the federal or state courts located in the
Commonwealth of Massachusetts. XX. XXXXXX consents to the personal jurisdiction of such courts,
and waives any jurisdiction or venue defenses otherwise available to him.
16. Should any term or provision of this Agreement be declared illegal, invalid or
unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be
enforceable, such provision shall immediately become null and void, leaving the remainder of this
Agreement in full force and effect. The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or against any of the
parties.
17. XX. XXXXXX recognizes and acknowledges that Releasees may seek the assistance, cooperation
or testimony of XX. XXXXXX in connection with any investigation, litigation, patent application or
prosecution, or intellectual property or other proceeding arising out of matters within the
knowledge of XX. XXXXXX and related to his position as an employee of NUCRYST, and in any such
instance, XX. XXXXXX represents and warrants that he shall provide such assistance, cooperation or
testimony and Releasee shall pay XX. XXXXXX’X reasonable costs and expenses in connection
therewith.
18. XX. XXXXXX agrees that, for a period of eighteen (18) months after the Termination Date,
he shall notify NUCRYST in writing of any change of residence address and of any subsequent
employment (stating the name and address of the employer and providing a description of the title
and duties of the position) or of any other business activity.
19. Any notice required to be given to any party under any provision of this Agreement shall
be made in writing, by first class mail, to the following addresses:
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To NUCRYST: to the attention of General Counsel, NUCRYST Pharmaceuticals Corp.,
10102 – 000 Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxx X0X 0X0.
10102 – 000 Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxx X0X 0X0.
To XX. XXXXXX: to the attention of Xxxxx X. Xxxxxx, 0 Xxxxxxxxx Xxxx, XX 00000.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the
foregoing Confidential Separation Agreement and General Release to be effective as of the date
written above.
| NUCRYST PHARMACEUTICALS CORP. and NUCRYST PHARMACEUTICALS INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Xxxxxx X. Xxxxxxx | ||||
| Chairman & CEO | ||||
Signed by XX. XXXXXX at Natick, MA on this 21st day of April, 2008 in the presence of:
WITNESS:
/s/ Xxx Xxxxxx |
/s/ Xxxxx X. Xxxxxx |
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