EXHIBIT 10.131
SEPARATION AGREEMENT, MUTUAL RELEASE AND WAIVER OF CLAIMS
This Separation Agreement, Mutual Release and Waiver of Claims
("Agreement") is entered into by and between Xxxxx X. Xxxx (hereafter referred
to as "Xxxx"), on the one hand, and Calypte Biomedical Corporation, its
subsidiary and affiliated entities and the predecessors, successors and assigns
of each (hereafter referred to as the "Company"), on the other hand, effective
upon the expiration of the Revocation Period described in Paragraph 14 below
(the "Effective Date"). Together, Xxxx and the Company shall be referred to
herein as "the Parties".
1) Xxxx resigned her employment as Chief Executive Officer
with the Company effective June 2, 2003 (the "Resignation Date") and she shall
resign her position as a director of the Company effective as of the date both
Parties have executed this Agreement.
2) The text of the press release to be issued by the Company
regarding Xxxx'x resignation as Chief Executive Officer and as a Board Director
is attached hereto as Exhibit A. This press release shall not be issued by the
Company until such date as both Parties have executed this Agreement. The
Company acknowledges and agrees that it will not make (and it will cause its
officers, directors, employees and agents not to make) any statements (whether
written or oral) to the press, third parties (including but not limited to
headhunters and prospective employers of Xxxx and/or their agents) or employees
which are inconsistent with Exhibit A or disparaging of Xxxx in any way.
3) On or before June 30, 2003, the Company shall issue Xxxx a
check in the amount of $23,446.10 plus interest at a rate of 8% per month
accrued as of June 2, 2003, which represents outstanding expenses (plus
interest) due to her from the Company as follows:
a) $17,446.16 in unreimbursed business-related
expenses which were properly incurred by Xxxx during her employment with the
Company; and
b) $6,000 in unreimbursed car allowance payments due
to Xxxx from the Company for the period November 1, 2002 through June 1, 2003
(equivalent to payments of $750 per month during the applicable period)
4) In return for Xxxx'x release and waiver of claims in
Paragraph 8 and the other provisions of this Agreement, the Company agrees to
provide certain benefits to Xxxx as follows:
(a) the Company shall pay Xxxx the amount of
$312,692.32 as follows:
(i) commencing immediately and continuing until such time as
the Company closes funding (whether in a single placement or cumulative
placements) of $5 million or more, which funding total(s) shall be calculated as
of June 2, 2003 (the
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"Funding"), Xxxx will serve as a consultant to the Company and shall be paid
amounts equal to bi-monthly payments of an annual consulting fee of $312,692.32
(e.g., two payments of $13,028.85 each month), in accordance with the timing of
the Company's regular payroll practices, for a period of one year from the
Effective Date such that the full $312,692.32 shall be paid to Xxxx by the
Company on or before the one-year anniversary of the Effective Date. The Company
warrants and represents that these payments shall be prioritized by the Company
for all purposes (including but not limited to disclosure purposes) as payroll
obligations due to Xxxx from the Company, but that such payments in fact are
consulting fees to be paid without any withholdings or deductions and the
Company shall timely issue Xxxx a Form 1099 reporting such payment as other
income; and
(ii) on the effective date of the close the Funding, if any,
the Company shall pay Xxxx the full payment amount of $312,692.32, less any
payments made in accordance with the preceding subparagraph. The Company
warrants and represents that its payment obligation to Xxxx as described herein
shall be prioritized by the Company for all purposes (including but not limited
to disclosure purposes) as a payroll obligation due to her from the Company. The
Parties agree any payment made by the Company to Xxxx under this subparagraph
shall constitute consideration for cancellation of Xxxx'x Employment Agreement
with the Company dated October 31, 2002 (the "Employment Agreement") and that
the payment of such amount does not constitute "wages" or "nonemployee
compensation" for federal or state income or employment tax purposes.
Accordingly, the Company agrees that it shall not withhold any taxes from this
payment and that it shall timely issue Xxxx a Form 1099 misc reporting such
payment as other income.
(b) The Company acknowledges and agrees that Xxxx
shall remain a participant on the Company's health insurance plan with the same
level of coverage and benefits as during her employment as Chief Executive
Officer for such time as she receives payments from the Company pursuant to
subparagraph 4(a), above, and the Company warrants and represents that the
applicable health insurance plan documents permit the Company to allow her to do
so; thereafter, the Company shall timely provide Xxxx with the documentation
necessary for her to continue her coverage under the Company's health insurance
plan through COBRA.
(c) The Company shall pay Xxxx her car allowance of
$750 per month (paid by the Company in the form of a check payable to Xxxx
issued on or before the first day of each month and pro-rated for any partial
month(s)) for such time as she receives payments from the Company payroll
pursuant to subparagraph 4(a), above. The Company warrants and represents that
its payment obligation to Xxxx as described herein shall be prioritized for all
purposes (including but not limited to disclosure purposes) as a payroll
obligation due to her from the Company.
(d) The Company acknowledges and agrees that on May
29, 2003, it granted Xxxx options to purchase a total of 1,544,476 shares of the
Company's common stock pursuant to the Company's 2000 Equity Incentive Plan
("Plan") by means of five separate grants on May 29, 2003 as follows: (1)
146,667 shares (fully vested and
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exercisable as of the date of grant), (2) 165,833 shares (50% vested and
exercisable as of the date of grant and 50% vested and exercisable on the
one-year anniversary of the date of grant), (3) 62,573 shares (fully vested and
exercisable as of the date of grant), (4) 1,084,167 shares (50% vested and
exercisable as of the date of grant and 50% vested and exercisable on the
one-year anniversary of the date of grant) and (5) 85,236 shares (fully vested
and exercisable as of the date of grant) (cumulatively, the "Xxxx Options"). The
Company further acknowledges and agrees that, notwithstanding anything to the
contrary in the Plan, in the stock option grants or agreements, or in any other
agreement between Xxxx and the Company, the Xxxx Options are fully vested and
exercisable by Xxxx and shall remain exercisable by Xxxx for a period of two
years from the Resignation Date (i.e., until June 2, 2005) as to 919,476 of the
shares subject to the Xxxx Options and that the remaining 625,000 shares subject
to the Xxxx Options (e.g., the unvested shares described in (2) and (4) of this
subparagraph 4(d)) shall vest and become exercisable by Xxxx on May 29, 2004 and
shall remain exercisable by Xxxx for a period of two years from that vesting
date (i.e. until May 29, 2006). The Company warrants and represents that it will
use its best efforts to cooperate with Xxxx at such time(s) as she may exercise
all or some of the shares subject to the Xxxx Options in respect of a same day
exercise and sale of such shares in order that cash generated from any such sale
be used for the payment of the exercise price and satisfaction of tax
obligations. The Company acknowledges and agrees that the Xxxx Options have an
exercise price of $0.32 per share, with the exception of the grant of 85,235
shares (e.g., the grant described in (5) of this subparagraph 4(d)), which have
an exercise price of $0.01 per share. The Company warrants and represents that
the Xxxx Options were granted in all respects in accordance with the terms of
the Plan and the Company further warrants and represents that the shares of
common stock underlying the Xxxx Options shall be registered by the Company with
the Securities and Exchange Commission for resale when the shares of common
stock underlying the Plan are so registered. The Company shall make its best
efforts to so register said shares as soon as possible and in no event any later
than July 1, 2003.
5) The Company acknowledges and agrees that Xxxx'x duties and
obligations as an employee of the Company ceased, the Employment Agreement has
been terminated, and Xxxx has no further duties or obligations thereunder or
otherwise, as of June 2, 2003. The Company also acknowledges and agrees that
Xxxx has no continuing obligations as either an officer or director of the
Company and that she has no continuing fiduciary duties whatsoever to the
Company as of the date she executes this Agreement. The Company further
acknowledges and agrees that it will indemnify, defend and hold Xxxx (and her
heirs and representatives) harmless against any and all claims and losses
(including reasonable attorneys fees actually incurred) arising out of her
employment with, and service as a Board member to, the Company to the maximum
extent allowed in accordance with the Certification of Incorporation and by-laws
of the Company, any applicable insurance policies and applicable law.
6) Xxxx has the right to consult an attorney before executing
this Agreement and the general release and waiver of claims contained herein.
Pursuant to the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C.
ss.621 ET SEQ., as amended by the Older Workers Benefit Protection Act, the
Company hereby advises her to do so.
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7) In order to receive the benefits described herein, Xxxx
must sign and return this Agreement no later than twenty-one (21) days after its
June 12, 2003, delivery to her, although she may sign and return this Agreement
before that date if she chooses to do so.
8) MUTUAL RELEASE AND WAIVER OF CLAIMS
a. Except as other expressly provided below in this
Paragraph 8(a), Xxxx, on behalf of herself, her family members, heirs,
successors and assigns hereby fully waives, releases, and forever discharges the
Company, its subsidiary and affiliated entities and anyone connected with them,
including but not limited to their past and present officers, directors,
attorneys, management staff, employees, and agents, and the parent(s),
affiliates, subsidiaries, predecessors, successors, and assigns of each of the
foregoing (collectively, the "Releasees") from any and all claims, past, present
or future (including claims for costs and attorneys' fees), damages, penalties,
demands, actions, liabilities, judgments, liens, losses, indebtedness or causes
of action of any kind, known or unknown, suspected or unsuspected, which she
ever had or now has against one or more of the Releasees up to and including the
date she executes this Agreement. Notwithstanding the foregoing, Xxxx does not
release any rights or claims she may have to indemnity and/or defense as more
fully described in Paragraph 5, above, or otherwise as a matter of contract, law
or equity arising out of or relating to her employment with, or service as a
Board Member to, the Company.
b. The Company, on behalf of itself, its subsidiary
and affiliated entities and anyone connected with them, including but not
limited to its and their past and present officers, directors, attorneys,
management staff, employees, and agents, and the parent(s), affiliates,
subsidiaries, predecessors, successors, and assigns of each of the foregoing,
hereby fully waives, releases, and forever discharges Xxxx from any and all
claims, past, present or future (including claims for costs and attorneys'
fees), damages penalties, demands, actions, liabilities, judgments, liens,
losses, indebtedness or causes of action of any kind, known or unknown,
suspected or unsuspected, which it and/or they ever had or now have against Xxxx
up to and including the date it executes this Agreement. For avoidance of doubt,
this release does not include a release of any claims Company shareholders may
have against Xxxx in her capacity as an officer or director of the Company.
c. Except as otherwise specifically provided in
Paragraphs 8(a) and 8(b), the releases contained in Paragraphs 8(a) and 8(b)
include, but are not limited to, all claims arising out of the negotiation and
execution of this Agreement and any and all claims which the Parties may have
against each other, up to and including the date they execute this Agreement,
including but not limited to any and all employment-related claims, such as
claims for damages arising from claims of age discrimination under the ADEA,
claims under California Fair Employment and Housing Act, claims under the
California Labor Code, claims under Title VII of the 1964 Civil Rights Act, the
Americans with Disabilities Act, and any claims in tort or contract related to
Xxxx'x employment with the Company, or the termination of Xxxx'x employment with
the Company, or to any acts or omissions of the Releasees, or anyone connected
with them.
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d. It is possible that other injuries or damages not
now known to Xxxx or the Company will develop or be discovered after the date of
this Agreement, and this Agreement is expressly intended to cover and include
all such injuries or damages, including all rights of action therefor which
arise out of or relate to, directly or indirectly, the claims released by this
Agreement. Xxxx and the Company hereby expressly, knowingly, and voluntarily
waive the provisions of Section 1542 of the California Civil Code and any
similar provision of state or federal law now in effect or in effect in the
future. Section 1542 provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor."
Xxxx understands that any rights or claims under the ADEA that may arise after
the date she executes this Agreement are not waived
9) The Parties will not xxx or initiate against each other any
action or proceeding, or participate in same, individually or as a member of a
class, under any contract (express or implied), law, or regulation, federal,
state, or local, pertaining in any manner whatsoever to the released claims,
except to enforce the terms of this Agreement. The Parties specifically warrant
and represent that neither of them have any pending complaint or charge against
the other in any state or federal court or any local, state or federal agency
based on Xxxx'x employment with the Company, or on any other events occurring
prior to their execution of this Agreement.
10) The Parties warrant and represent that they have not
assigned or transferred to any person not a party to this Agreement any released
claim or portion thereof.
11) The Parties understand that each of them believes that she
or it has acted properly, and not unlawfully in any respect. Nothing in this
Agreement is intended to be nor will it be alleged to constitute evidence of or
be an admission by either Party of any liability, omission, or wrongdoing or any
kind whatever, nor shall this Agreement be offered or received into evidence or
otherwise filed or lodged in any proceeding against the other Party, except as
may be necessary to prove the terms of this Agreement or to enforce the same.
12) The Parties acknowledge and agree that the exclusive
jurisdiction and venue for any dispute arising out of or relating to this
Agreement shall be the state or federal courts located in the county of Alameda,
California. The prevailing party in any such action shall be awarded its fees
and costs, including but not limited to its attorney's fees, expert fees, and
all costs of suit, whether or not recoverable by statute or rule.
13) This Agreement constitutes the entire agreement between
the Parties and supersedes all prior or contemporaneous agreements,
representations or understandings, regarding Xxxx'x employment and the
termination thereof, with the exception of the stock option agreements between
Xxxx and the Company (and any
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documents related thereto). In entering this Agreement, neither Party has relied
on any representations made by the other Party (or any of that Party's
representatives), except as expressly set forth herein in writing. This
Agreement may not be changed orally but only in a writing signed by Xxxx and an
authorized representative of the Company. This Agreement shall be construed
under and governed by the laws of the State of California, without regard for
its conflict of law provisions. If any part of this Agreement shall be
determined to be illegal, invalid or unenforceable, the remaining parts of the
Agreement will not be affected thereby and any such illegal, invalid or
unenforceable part shall not be deemed to be a part of this Agreement. This
Agreement may be signed in counterparts, each of which shall be deemed an
original of one and the same agreement, and facsimile signatures shall be
acceptable as originals.
14) Xxxx shall have up to seven (7) days from the date
immediately following her execution of this Agreement during which she may
revoke her acceptance (the "Revocation Period"). Any such revocation must be
communicated to the Company in writing within the Revocation Period. Xxxx hereby
is advised in writing that this Agreement shall not become effective or
enforceable until the Revocation Period has expired.
Date: June 26, 2003 /s/ XXXXX X. XXXX
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XXXXX X. XXXX
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CALYPTE BIOMEDICAL CORPORATION
Date: June 27, 2003 /s/ XXXXXXX X. XXXXXXX
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XXXX XXXXXXX
Chairman, Board of Directors
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