SEPARATION AGREEMENT
EXHIBIT
10.5
This
Separation Agreement (“Agreement”)
is
made and entered into as of April 4, 2005 (the “Effective
Date”),
by
and among Xxxxxx Xxxxxx (“Executive”),
Chiral Quest, Inc., a Minnesota corporation (“Company”),
and
VioQuest Pharmaceuticals, Inc., a Minnesota corporation (“Parent”).
RECITALS
A. Executive
is a member of the Board of Directors of Parent and is employed by Company
as
its President and Chief Executive Officer and serves as an officer and member
of
the Board of Directors of certain subsidiaries of Parent.
B. The
parties have determined to mutually agree regarding the terms and conditions
of
Executive’s separation from Company and Parent.
NOW,
THEREFORE, in consideration of the foregoing, and the terms and conditions
set
forth below, the parties agree as follows.
AGREEMENT
1. Separation
from Company.
Executive agrees to, and hereby does, resign as President and Chief Executive
Officer of the Company, effective as of 11:59 p.m. (Eastern Time) on April
4,
2005 (the “Separation
Date”).
Executive agrees to, and hereby does, resign from the Board of Directors of
the
Company and Parent and from all directorships and officer positions in all
subsidiaries of the Company, Parent and all other companies or entities where
he
is serving as a representative of either the Company or Parent, effective as
of
the Effective Date. The parties acknowledge that Executive’s separation from
Company and Parent is the result of an agreement to separate on mutually
agreeable terms. Except as expressly provided herein, the Employment Agreement
between Executive and Company dated June 17, 2004 (the “Employment
Agreement”),
is
terminated by mutual agreement of the parties as of the Effective Date and,
except as otherwise set forth in this Agreement, has no further force or
effect.
2. Benefits
and Payments.
Company
will extend to Executive the following consideration:
(a) Payments.
Provided that Executive does not exercise any of his rights to revoke his
release of discrimination claims pursuant to Section
9
hereof
and otherwise complies with his obligations hereunder, Company agrees that
as
separation pay it will pay to Executive an aggregate cash payment equal to
$105,000 (the “Separation
Payment”).
The
Separation Payment shall be paid in installments over a six month period in
accordance with the Company’s normal payroll practices commencing on the first
Company payday following the expiration of Executive’s right to revoke the
release provided in Section 9 of this Agreement. The parties understand that,
in
accordance with the terms of the Employment Agreement, the Company, following
Executive’s termination of employment in certain circumstances, may off-set any
severance obligation that would be owing to Executive by actual amounts earned
by Executive from other employment during the 6-month period following such
termination. Notwithstanding any such provision in the Employment Agreement,
Company hereby waives any right it would otherwise have under the Employment
Agreement to reduce the amount of the Separation Payment. Executive understands
that the Separation Payment is subject to applicable federal and state income
tax and FICA withholding.
(b) No
Other Remuneration.
Except
as otherwise provided in this Agreement, Executive agrees that he is not
entitled to any remuneration from Company, except as provided in this Agreement.
This includes back pay, sick pay, vacation pay, bonuses, health, life and
disability insurance benefits or any other compensation.
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(c) COBRA
Insurance Coverage.
In
addition to such payment, Company and Parent will, for a period of six (6)
months following the Separation Date, continue to provide Executive with health
insurance coverage in the same manner as currently provided by Company or Parent
to Executive. If Executive elects any insurance coverage under COBRA beyond
such
6-month period, then Executive shall be responsible for all amounts due for
such
insurance coverage under COBRA.
(d) Stock
Options.
Executive agrees that all stock options previously granted to him by Parent
shall terminate or expire in accordance with their respective terms as of the
Separation Date.
(e) Out-of-Pocket
Expenses.
Executive shall submit to Company, by no later than April 10, 2005, all claims
for reimbursement of out-of-pocket expenses incurred by Executive through the
Separation Date in the course of his employment by Company, including all
appropriate receipts or other documentation evidencing such expenses. Company
will promptly reimburse Executive for such expenses; provided, that Company
shall have no obligation to reimburse Executive for any such expenses for which
Executive has not submitted a reimbursement claim by April 10, 2005, except
that
Company shall reimburse Executive for one airline ticket in the amount invoiced
by Executive. Following the Separation Date, Executive shall have no right
to
incur, nor be reimbursed for, any out-of-pocket expense.
3. Non-Disparagement.
Executive will not disparage Company, Parent, their respective affiliated
businesses, or their respective officers, board members, or employees, and
Company and Parent will not disparage Executive. In response to any request
from
a prospective employer for information relating to Executive, Company and Parent
will confirm, in writing if requested, Executive’s former title(s), length of
employment and ending salary and related compensation terms. It is otherwise
the
Company’s and Parent’s policy to refrain from providing any reference
information to prospective employers.
4. Employment
Agreement.
Sections 5 and 6 of the Employment Agreement shall continue to have full force
and effect; provided,
however,
that
notwithstanding anything to the contrary contained in the Employment Agreement,
the provisions of paragraph (a) of Section 6 of the Employment Agreement
(concerning competition by Executive) shall (x) survive only for a period a
six
months from the Separation Date. and (y) shall be amended to delete the
second-to-last sentence and replace it with the following second-to-last
sentence.
For
purposes of this Agreement, the Company shall be deemed to be actively engaged
in the business of chiral catalytic chemistry, including the development,
application, and manufacturing of catalysts used to develop and manufacture
chiral molecules, intermediates, and building blocks and providing consulting
services in connection therewith, and in the future, in any other business
in
which the Company devotes substantive resources to study, develop or pursue
during the Restricted Period of which business Executive was aware during the
course of his employment.
The
Employment Agreement, in every other respect, is hereby terminated.
5. Records,
Documents and Property.
Executive has returned or will return to Company within 3 days hereafter all
of
Company’s and Parent’s property (including without limitation computers),
records (including without limitation computer disks and computer files)
correspondence, and documents in Executive’s possession or in Executive’s
control. Company has returned or will return within 3 days hereafter all
personal effects and possessions of Executive in Company’s possession, and will
make reasonable efforts to provide copies of Executive’s personal data or
documents in the Company’s information systems as requested by
Executive.
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6. Non-Admission.
Nothing
in this Agreement is intended to be, nor will be deemed to be, an admission
of
liability by Company, Parent or Executive that they have violated any state
or
federal statute, local ordinance, or principal of common law, or that Company,
Parent or Executive has engaged in any wrongdoing.
7. Release.
In
consideration of the payments and other benefits of this Agreement, Executive
hereby fully and finally releases, waives, and otherwise relinquishes any and
all claims that he has or believes he has against Company or Parent through
the
date of this Agreement. Executive will not bring any lawsuits or make any other
demands against Company or Parent, except as necessary to enforce this Agreement
or any stock option agreement between Parent and Executive that survives
Executive’s separation from the Company and Parent. The payments and other
benefits that Executive will receive under this Agreement is full and fair
consideration for the release of such claims. Neither Company nor Parent owes
Executive anything other than what is set forth in this Agreement except that
Executive is entitled to indemnification and defense of any claims made against
him as allowable by law and consistent with Parent’s and Company’s By-laws that
arise out of the period of his employment. The payments and other benefits
that
Executive will receive hereunder constitute consideration in excess of that
to
which he is entitled.
For
purposes of this section 7, “Company”
means
Chiral Quest, Inc., a Minnesota corporation, Parent and any subsidiary or any
other company related to either the Company or Parent in the past or present,
and each of them; and past or present officers, directors, agents and employees
of Company and Parent and any other person who acted on behalf of Company or
Parent or on instructions from Company or Parent.
The
claims that Executive is releasing, waiving, and otherwise relinquishing
hereunder include all of the rights he has now to any relief of any kind from
Company, including but not limited to, claims for breach of contract; breach
of
fiduciary duty; fraud or misrepresentation; rights and claims for age
discrimination under the Age Discrimination in Employment Act (“ADEA”),
the
Americans with Disabilities Act (“ADA”),
the
Family and Medical Leave Act (“FMLA”),
or
any other federal, state, or local civil rights laws; defamation; infliction
of
emotional distress; unlawful or wrongful termination of employment; and any
other claims for unlawful employment practices.
In
consideration of the benefits of this Agreement, Company hereby agrees that
it
will not bring any lawsuits or press any claims or make any other demands
against Executive, and otherwise relinquishes and waives any and all claims
against Executive that are known to the executive officers of Company through
the date of this Agreement; provided,
however,
notwithstanding the foregoing, that Company may bring lawsuits or press claims
against Executive (a) as necessary to enforce this Agreement or Sections 5
and 6
of the Employment Agreement and (b) nothing herein shall be deemed to release
Executive for claims by Company against Executive for contribution and/or
indemnification of any action or claim brought by any third party person arising
out of Employee’s acts or omissions while employed by Company.
8. Rights
Concerning Release.
Company
hereby advises Executive to consult with an attorney prior to signing this
Agreement containing a waiver of claims under the ADEA.
Executive
acknowledges that he has had more than twenty-one (21) days to consider his
waiver of rights and claims of age discrimination under the ADEA. Executive
understands that, upon signing this Agreement, he may revoke his waiver of
age
discrimination rights and claims under the ADEA within seven (7) days
thereafter, and his waiver of age discrimination rights and claims under the
ADEA will not be effective or enforceable until this seven-day period has
expired.
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Executive
understands that if he revokes his waiver as set forth in this Paragraph 8,
Company’s obligations hereunder will cease.
9. Entire
Agreement.
This
Agreement and the employee benefits plans in which Executive may be a
participant, constitute the entire Agreement between the parties with respect
to
the termination of Executive’s employment relationship with Company and Parent,
and the parties agree that there were no other inducements or representations
leading to the negotiation, drafting, and execution of this
Agreement.
10. Invalidity.
In case
any one or more of the provisions of this Agreement should be invalid, illegal,
or unenforceable in any respect, the validity, legality, and enforceability
of
the remaining provisions contained in this Agreement will not in any way be
affected or impaired.
11. Voluntary
and Knowing Action.
Executive, Company and Parent acknowledge that they have read and understand
this Agreement and voluntarily enter into this Agreement.
12. Heirs
and Successors.
This
Agreement shall inure to the benefit of and shall bind the parties, their heirs,
successors, representatives, and assigns.
13. Governing
Law.
This
Agreement shall be construed and interpreted in accordance with the laws of
the
state of New Jersey. Each
of the parties to this Agreement hereby waives their respective rights to a
trial by jury.
14. Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which will be deemed an original, but all of which together will constitute
one
and the same instrument.
16. Notices/Communications.
Any
notice, request, demand, or communication permitted, required or given relating
to this Agreement either by Company to Executive or by Executive to Company
shall be in writing and, unless otherwise required under the terms of a separate
agreement or law or regulation shall be deemed to have been given by either
party to the other when the party by whom such notice or communication is given
deposits such notice or communication in the U.S. Postal Service mail, postage
prepaid, certified mail, return receipt requested, properly addressed to the
party to whom it is directed. Either party may, by notice sent in like manner,
designate a different address for notices and communications.
|
If
Sent to Company:
Xxxxxx
Xxxxxxxxx
0
Xxxx Xxxx Xxxxx, Xxxxx X
Xxxxxxxx
Xxxxxxxx, XX 00000
with
a copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
00
Xxxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxx, Esq.
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If
Sent to Executive:
Xxxxxx
Xxxxxx
00
Xxxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxx,
XX 00000
with
a copy to:
Xxx
Xxxxx, Esq.
Green
& Savits
00
Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
|
Signature
page follows.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed on the
day
and year written below.
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Chiral
Quest, Inc.
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Dated:
June 14, 2005
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By:
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/s/
Xxxxx Xxxx
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Xxxxx
Xxxx
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Chief
Financial Officer
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Dated:
June 14, 2005
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By:
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/s/
Xxxxxx Xxxxxxxxx
|
|
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Xxxxxx
Xxxxxxxxx
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President
& Chief Executive Officer
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Executive:
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Dated:
May 27, 2005
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/s/
Xxxxxx Xxxxxx
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Xxxxxx
Xxxxxx
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