Sipex Corporation Separation Agreement and General Release
Exhibit 10.1
Sipex Corporation
Separation Agreement and General Release
This Separation Agreement and General Release (this “Agreement”) is made by and between Xxxxx
Xxxxxx (“Employee”) and Sipex Corporation, a Delaware corporation (the “Company”). Employee and
the Company are collectively referred to herein as the “Parties.”
RECITALS
WHEREAS, Employee was employed by the Company;
WHEREAS, the Employee and the Company entered into an Employment Agreement dated September 9,
2002, (“the Confidentiality Agreement”);
WHEREAS, the Company and Employee entered into a Stand-Alone Stock Option Agreement dated
September 17, 2002, as amended by that certain memorandum authored by the Company’s Director of
Human Resources, dated September 23, 2003 and subsequently approved by the Company’s Board of
Directors, and a Non-Qualified Stock Option Agreement dated September 10, 2003, granting Employee
the option to purchase shares of the Company’s common stock subject to the terms and conditions of
the Company’s 1997 Stock Option Plan and the Stock Option Agreement (collectively, the “Stock
Agreements”);
WHEREAS, Employee’s employment with the Company terminated on April 26, 2005;
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions and demands that the Employee may have against the Company as defined
herein, including, but not limited to, any and all claims arising out of, or related to, Employee’s
employment with, or separation from, the Company;
NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as
follows:
COVENANTS
1. Termination of Employment. Company and Employee acknowledge and agree that
Employee’s employment with the Company terminated on April 26, 2005 (the “Termination Date”).
2. Consideration.
(a) The Company agrees to pay Employee sixty-six thousand, seven hundred fifty dollars,
($66,750), less applicable withholding, in accordance with the Company’s regular payroll practices.
This payment will be made to Employee within ten (10) business days after the Effective Date of
this Agreement. Employee acknowledges that Company will issue to him a Form W-2 in connection with
said payment.
(b) The Company agrees to pay Employee’s attorney Xxxx Xxxxxxx the amount of fourteen
thousand, two hundred and fifty dollars ($14,250) representing attorneys’ fees incurred with
regard to the negotiation and preparation of this Agreement. This payment will be made directly to
1
Employee’s attorney (Xxxx Xxxxxxx, 000 Xxxxxxxxxx Xx #000, Xxx Xxxxxxxxx, XX 94104) within
ten (10) business days after the Effective Date of this Agreement. The Company will issue to
Employee’s attorney a Form 1099 in connection with said payment
(b) Stock. The Parties agree that for purposes of determining the number of shares
of the Company’s common stock which Employee is entitled to purchase from the Company, pursuant to
the exercise of outstanding options, the Employee will be considered to have vested only up to the
Termination Date. The exercise of any stock options shall continue to be subject to the terms and
conditions of the Stock Agreements and the 1997 Stock Option Plan.
(c) Benefits. Employee’s health insurance benefits ceased on April 30, 2005, subject
to Employee’s right to continue his health insurance under COBRA. The Employee has the option, at
the Employee’s own expense, to extend the health insurance coverage currently provided by the
Company for a period of 18 months from the Termination Date pursuant to the terms and conditions of
COBRA. The Employee acknowledges that the Employee has sixty (60) days from the Termination Date
(or receipt of this notice, whichever is later) to notify the Company in writing of the Employee’s
election to so continue such coverage. Employee’s participation in all other benefits and
incidents of employment (including, but not limited to, the accrual of vacation and paid time off,
and the vesting of stock options) ceased on the Termination Date.
(d) Tax Treatment. The Company makes no representations or warranties with respect
to the tax consequences of the payment of any sums to Employee under the terms of this Agreement,
including the payment made to Employee’s attorney. Employee agrees and understands that, with the
exception of the employer withholding addressed in paragraph 1(a) above, he is responsible for
payment of any local, state and/or federal taxes on the sums paid hereunder by the Company and any
penalties or assessments thereon. Employee further agrees to indemnify and hold the Company
harmless from any claims, demands, deficiencies, penalties, assessments, executions, judgments, or
recoveries by any government agency against the Company for any amounts claimed due on account of
Employee’s failure to pay federal or state taxes or damages sustained by the Company by reason of
any such claims, including reasonable attorney fees.
3. Confidential Information. Employee shall continue to comply with the terms and
conditions of the Confidentiality Agreement (a copy of which is attached hereto as Exhibit A) and
maintain the confidentiality of all of the Company’s confidential and proprietary information.
Employee shall also return to the Company all of the Company’s property, including all confidential
and proprietary information, and all documents and other information that Employee obtained in
connection with his employment with the Company, on or before the Effective Date of this Agreement.
Such information includes, but is not limited to, all customer lists, equipment, records, data,
notes, reports, proposals, correspondence, specifications, drawings, blueprints, sketches,
materials, or other documents or property belonging to the Company, that were in the Employee’s
possession or control. The Employee represents that the Employee has not retained reproductions or
copies of any of the above, whether in tangible, electronic, or other form.
4. Payment of Salary. Employee acknowledges and represents that the Company has paid the
Employee all salary, wages, bonuses, incentive pay, commissions, profit-sharing, reimbursable
expenses, accrued vacation, interest, stock, stock options, outplacement costs, fees and any and
all other benefits and compensation due to Employee. The Employee acknowledges that the Company
does not owe the Employee any additional amount (other than the consideration provided for in
paragraph 1 of this Agreement) and will not owe the Employee any additional amounts based on the
occurrence of any future events.
2
5. Release of Claims. The Parties agree that the foregoing consideration represents
settlement in full of all outstanding obligations owed by each party to the other, including their
respective current and former: officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations and assigns (the “Releasees”). The Parties, on behalf of themselves and on behalf of
their respective current and former: officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, heirs, family members, executors, agents, and assigns, hereby fully and forever
release each other and the other Releasees from, and agrees not to xxx concerning, any claim, duty,
obligation or cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that they may possess arising from any omissions, acts or facts
that have occurred up until and including the Effective Date of this Agreement including, without
limitation:
(a) any and all claims relating to or arising from Employee’s employment relationship with
the Company or the termination of that relationship (with the exception of any claims for
unemployment or workers’ compensation to the extent applicable law provides that those claims may
not be released);
(b) any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of, shares of Company stock, including, but not limited to, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;
(c) any and all claims under the law of any jurisdiction, including, but not limited to,
wrongful discharge of employment; constructive discharge from employment; termination in violation
of public policy; discrimination; harassment; breach of contract, both express and implied; breach
of a covenant of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; and conversion;
(d) any and all claims for violation of the federal, or any state, constitution, and claims
for violation of any federal, state or municipal statute, including, but not limited to, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Older Workers Benefit Protection Act, the Americans with Disabilities Act of 1990,
the Rehabilitation Act of 1973, the Fair Labor Standards Act, the Employee Retirement Income
Security Act of 1974, the Family and Medical Leave Act, the Worker Adjustment and Retraining
Notification Act, the Fair Credit Reporting Act, the California Fair Employment and Housing Act,
the California Family Rights Act, and the California Labor Code;
(e) any and all claims arising out of any other laws and regulations relating to employment
or employment discrimination;
(f) any and all claims for any loss, cost, damage, or expense arising out of any dispute over
the non-withholding or other tax treatment of any of the proceeds received by Employee, as a result
of this Agreement; and
(e) any and all claims for attorneys’ fees and costs.
3
The Company and Employee agree that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters released.
Notwithstanding, the Parties agree that nothing herein shall constitute a waiver or release of any
claims the Company may have against Employee for fraud, embezzlement, or any other criminal
conduct. This release does not extend to any obligations incurred under this Agreement.
6. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”) and that this waiver and release is knowing and voluntary. Employee and the Company agree
that this waiver and release does not apply to any rights or claims that may arise under the ADEA
after the Effective Date of this Agreement. Employee acknowledges that the consideration given for
this waiver and release Agreement is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing that:
(a) he should consult with an attorney prior to executing this Agreement;
(b) he has up to twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this Agreement to revoke this Agreement;
(d) his ADEA waiver shall not be effective until the revocation period has expired; and,
(e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically authorized by federal
law.
7. Civil Code Section 1542. The Parties represent that they are not aware of any claims
against any of the Releasees. The Parties also acknowledge that they have been advised to consult
with legal counsel and are familiar with the provisions of California Civil Code Section 1542,
which provide 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.
The Parties, being aware of this code section, agree to expressly waive any rights they may have
thereunder, as well as under any other statute or common law principles of similar effect.
8. No Pending or Future Lawsuits. The Parties represent that they have no lawsuits,
claims, or actions pending in their respective names, or on behalf of any other person or entity,
against the other party or any of the other Releasees. The Parties also represent that they do not
intend to bring any claims on their own behalf or on behalf of any other person or entity against
the other party or any of the other Releasees.
4
9. Nondisparagement. The Employee agrees to refrain from any defamation, libel or slander
of the Company or its products, services, officers, directors, employees, or other representatives.
The Employee further agrees to refrain from any tortious interference with the contracts and
relationships of the Company. All inquiries by potential future employers of Employee will be
directed to Sipex’s Human Resources Department, and the Company will only state the following:
Employee’s last position and dates of Employment, and any other information and/or documentation
legally required to be disclosed.
10. Application for Employment. Employee understands and agrees that, as a condition of
this Agreement, he shall not be entitled to any employment with the Company, its subsidiaries, or
any successor, and he hereby waives any alleged right of employment or re-employment with the
Company, its subsidiaries or related companies, or any successor. Employee further agrees that he
will not apply for future employment with the Company.
11. Confidentiality of this Agreement. The Parties acknowledge that Employee’s agreement
to keep the terms and conditions of this Agreement confidential was a material factor on which the
Company relied in entering into this Agreement. Employee agrees to use his best efforts to
maintain in confidence the contents and terms of this Agreement, including the consideration for
this Agreement (hereinafter collectively referred to as “Settlement Information”). Employee agrees
to take every reasonable precaution to prevent disclosure of any Settlement Information to third
parties, and agrees that there will be no publicity, directly or indirectly, concerning any
Settlement Information. Employee is permitted to disclose Settlement Information only to those
attorneys, accountants, governmental entities, and family members who have a reasonable need to
know of such Settlement Information.
12. No Cooperation With Third Parties. Employee agrees that he will not counsel or assist
any attorneys or their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the other party and/or any
officer, director, employee, agent, representative, shareholder or attorney of Company, unless
under a subpoena or other court order to do so. Employee further agrees to immediately notify
Xxxxxx Xxxxxxx, General Counsel of the Company, upon receipt of any such court order, subpoena, or
any legal discovery device, including any such court order, subpoena or legal discovery device that
seeks or might require the disclosure or production of the existence or terms of this Agreement.
Employee further agrees to furnish, within three (3) business days of its receipt, a copy of such
court order, subpoena or legal discovery device to the Company. Notwithstanding the foregoing or
any other provision of this Agreement, each Party understands and agrees that both the Company and
Employee shall cooperate fully with the Securities and Exchange Commission with respect to any
inquiry or investigation it undertakes in connection with the Matter of Sipex Corporation (SF2938),
any other governmental investigations or actions that might be brought by the Securities and
Exchange Commission or the Department of Justice or any related issues. Notwithstanding, nothing
herein shall be construed so as to limit Employee’s right to assert any constitutional rights or
privileges he may enjoy in connection with said investigations, actions or matters.
13. Cooperation with Company. Employee agrees that Employee shall cooperate fully
with the Company in the resolution of any matters in which Employee was involved in during the
course of Employee’s employment, or about which Employee has knowledge, including but not limited
to any inquiry or investigation undertaken by the Securities and Exchange Commission with respect
to the Matter of Sipex Corporation (SF2938), any other governmental investigations or actions that
might be brought by the Securities and Exchange
5
Commission or the Department of Justice any other legal matters, including the defense or
prosecution of any claims or actions now in existence or which may be brought or threatened in the
future against or on behalf of the Company, including any claims or actions against its officers,
directors and employees.
Employee’s cooperation in connection with such matters, actions and claims shall include, without
limitation, being available to consult with the Company regarding legal matters in which Employee
has been involved or about which Employee has knowledge; assisting the Company in preparing for any
proceeding related to such matters (including, without limitation, depositions, consultation,
discovery, hearings or trial); to provide affidavits reflecting truthful written testimony; to
assist with any audit, inspection, hearing, proceeding or other inquiry; and to act as a witness to
provide truthful testimony in connection with any hearing, litigation or other legal proceeding
affecting the Company. Employee further agrees that should Employee be contacted (directly or
indirectly) by any person or entity adverse to the Company, or any representative of such person or
entity, Employee shall promptly (no later than within 48 hours of such contact), notify Xxxxxx
Xxxxxxx, General Counsel at the Company. Employee shall be reimbursed for any documented and
reasonable fees and expenses incurred in connection with providing such cooperation under this
Section. Specifically, the Company agrees that it shall reimburse Employee for his time at the
hourly rate of $125 per hour, provided that in order to be reimbursed, and Company request for
service or assistance must be made in writing. Notwithstanding, nothing herein shall be construed
so as to limit Employee’s right to assert any constitutional rights or privileges he may enjoy in
connection with said investigations, actions or matters.
14. Non-Solicitation. Employee agrees that for a period of twelve (12) months immediately
following the Effective Date of this Agreement, Employee shall not directly or indirectly solicit
any of the Company’s employees to leave their employment at the Company.
15. No Admission of Liability. The Parties understand and acknowledge that this Agreement
constitutes a compromise and settlement of disputed claims. No action taken by the Parties,
previously or in connection with this Agreement, shall be construed to be: (a) an admission of the
truth or falsity of any claims made, or (b) an admission by either party of any fault or liability
whatsoever to the other party or to any third party. This Agreement will be given the maximum
protection allowable under California Evidence Code Section 1152 and/or any other state or Federal
provisions of similar effect.
16. Breach. The Parties acknowledge and agree that any breach of any provision of this
Agreement, except as permitted by paragraph 6(e), shall constitute a material breach of this
Agreement and shall entitle the Company immediately to recover and/or cease the consideration
provided to Employee under this Agreement.
17. Costs. With the exception of the payment referenced in paragraph 1(b) above, the
Parties shall each bear their own costs, expert fees, attorney fees and other fees incurred in
connection with the preparation of this Agreement.
18. Arbitration. The Parties agree that any and all disputes arising out of, or relating
to, the terms of this Agreement, their interpretation, and any of the matters herein released,
shall be subject to binding arbitration in Santa Xxxxx County before the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes. The Parties agree
that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of
competent jurisdiction to enforce the arbitration award. The Parties agree that the prevailing
party in any
6
arbitration shall be awarded its reasonable attorney fees and costs. The Parties hereby agree to
waive their right to have any dispute between them resolved in a court of law by a judge or jury.
This section will not prevent either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute
relating to the Parties’ obligations under this Agreement and the agreements incorporated herein by
reference.
19. Attorney’s Fees. If any action at law or in equity is brought to interpret or enforce
the terms of this Agreement, the prevailing party will be entitled to recover its costs and
expenses from the other party, including the costs of mediation, arbitration, litigation, court
fees, plus reasonable attorneys’ fees, incurred in connection with such action, in addition to any
other relief to which such prevailing party may be entitled.
20. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Parties concerning the subject matter of this Agreement and the Employee’s relationship
with the Company, and supersedes and replaces any and all prior understandings, negotiations and
agreements, written or oral, concerning the subject matter of this Agreement and Employee’s
relationship with the Company, with the exception of the Confidentiality Agreement, and the Stock
Agreements.
21. No Oral Modification. Any modification or amendment of this Agreement, or additional
obligation assumed by either party in connection with this Agreement, shall be effective only if
placed in writing and signed by both Parties or their authorized representatives.
22. No Representations. Each party represents that it has had the opportunity to consult
with an attorney, and has carefully read and understands the scope and effect of the provisions of
this Agreement. Neither party has relied upon any representations or statements made by the other
party hereto which are not specifically set forth in this Agreement.
23. No Waiver. The failure of the Company insist upon the performance of any of the terms
and conditions in this Agreement, or the failure to prosecute any breach of any of the terms and
conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms or
conditions. This entire Agreement shall remain in full force and effect as if no such forbearance
or failure of performance had occurred
24. Severability. In the event that any provision in this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall
continue in full force and effect without said provision so long as the remaining provisions remain
intelligible and continue to reflect the original intent of the Parties.
25. Governing Law. This Agreement shall be construed, interpreted, governed and enforced
in accordance with the laws of the State of California, without regard for choice-of-law
provisions.
26. Effective Date. This Agreement is effective after it has been signed by both parties
and after eight (8) days have passed following the date Employee signed the Agreement, provided
Employee does not revoke the Agreement before that time per paragraph 6(c), (the “Effective Date”).
27. Counterparts. This Agreement may be executed in counterparts, and each counterpart
shall have the same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.
7
28. Voluntary Execution of Agreement. This Agreement is executed voluntarily and with the
full intent of releasing all claims, and without any duress or undue influence by any of the
Parties. The Parties acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily declined to
seek such counsel;
(c) They understand the terms and consequences of this Agreement and of the releases
it contains; and
(d) They are fully aware of the legal and binding effect of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates set forth below.
| Xxxxx Xxxxxx | Sipex Corporation | |||||||||
| Dated: July 13, 2005 | Dated: July ___, 2005 | |||||||||
| /s/ Xxxxx X. Xxxxxx | /s/ Xxxxx Xxxxxxx | |||||||||
| Signature | Signature | |||||||||
| Xxxxx X. Xxxxxx | Xxxxx Xxxxxxx, CEO | |||||||||
| Printed
Name Address: 0000 Xxxxxxxx Xx. Xxxxxxxxx, XX 00000 |
Printed Name and
Title Address: 000 Xxxxx Xxxxxxxx Xx. Xxxxxxxx, XX 00000 |
|||||||||
8
