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EXHIBIT 10.32
SEVERANCE AND SETTLEMENT AGREEMENT
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AGREEMENT made as of the 5th day of March, 1997, by and between Immulogic
Pharmaceutical Corporation (the "Company") and Xxxxxxx X. Xxxxxx, Ph.D. ("Xx.
Xxxxxx").
WHEREAS, the parties wish to cancel and terminate the Agreement effective
January 1, 1996 ("Prior Agreement") by and between the Company and Xx. Xxxxxx,
to resolve amicably Xx. Xxxxxx'x separation from the Company and to establish
the terms of Xx. Xxxxxx'x xxxxxxxxx arrangement;
NOW, THEREFORE, in consideration of the foregoing, and the agreements set
forth herein, the sufficiency of which is hereby acknowledged, the Company and
Xx. Xxxxxx agree as follows:
1. TERMINATION DATE. Xx. Xxxxxx'x termination date will be March 4, 1997
(the "Termination Date"). Xx. Xxxxxx agrees to submit to the Company
simultaneously with the execution of this Agreement, and the Company agrees to
accept, Xx. Xxxxxx'x letter of resignation as an officer and director of the
Company in the form attached hereto as Exhibit A.
2. CANCELLATION OF PRIOR AGREEMENT. The Company and Xx. Xxxxxx agree that,
as of the Termination Date, the Prior Agreement shall terminate and be of no
further force or effect, and neither of the parties shall have any further
obligations or rights thereunder, except that the provisions of Sections 6.1,
6.2, 6.3 and 6.4 of the Prior Agreement shall survive, and the terms of such
Sections are reaffirmed and are incorporated herein by reference and shall
continue in full force and effect as if set forth fully herein, it being
understood and agreed that for purposes of such Sections (as incorporated
herein) the "Agreement Term" shall be deemed to have ended on March 4, 1997. The
parties further agree that Schedule I, referenced in Section 6.3(b) of the Prior
Agreement, shall be and hereby is amended to delete paragraph (a) thereof.
3. Monetary Consideration.
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3.1 SEVERANCE PAYMENT. Concurrently with the execution of this Agreement,
and in consideration of Xx. Xxxxxx'x agreement to terminate the Prior Agreement,
the Company agrees to pay Xx. Xxxxxx $1,054,166.00, less all applicable state
and federal income and employment taxes required to be withheld (for a total net
payment of $680,527.28), as severance pay. The severance pay will be paid to Xx.
Xxxxxx on the business day following with the execution of this Agreement, by
wire transfer of immediately available funds to an account previously designated
by Xx. Xxxxxx to the Company.
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3.2 FRINGE BENEFITS. All fringe benefits previously provided to Xx. Xxxxxx
by the Company as of March 4, 1997 including but not limited to medical, dental,
and disability insurance, will be discontinued as of the Termination Date and
the Company shall have no further obligation to provide to Xx. Xxxxxx fringe
benefits of any kind. The provisions of this paragraph shall not apply to the
Directors and Officers Insurance Coverage provided pursuant to Section 3.4
below.
3.3 Amendment of Stock Option Agreement.
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(a) OUTSTANDING OPTIONS. Xx. Xxxxxx currently holds the following
five stock options: (a) a Stock Option to purchase 49,200 shares of Common Stock
of the Company (the "First Option") pursuant to an Incentive Stock Option
Agreement dated March 4, 1993 (the "First Option Agreement"); (b) a Stock Option
to purchase 125,800 shares of Common Stock of the Company (the "Second Option")
pursuant to a Non-Qualified Stock Option Agreement dated March 4, 1993 (the
"Second Option Agreement"); (c) a Stock Option to purchase 46,152 shares of
Common Stock of the Company (the "Third Option") pursuant to an Incentive Stock
Option Agreement dated November 10, 1994 (the "Third Option Agreement"); (d) a
Stock Option to purchase 128,848 shares of Common Stock of the Company (the
"Fourth Option") pursuant to a Non-qualified Stock Option Agreement dated
November 10, 1994 (the "Fourth Option Agreement"); and (e) a Stock Option to
purchase 43,750 shares of Common Stock of the company (the "Fifth Option")
pursuant to a Non-Qualified Stock Option Agreement dated January 31, 1996 (the
"Fifth Option Agreement"). The Company and Xx. Xxxxxx agree as follows:
(i) Notwithstanding the exercise provisions of the First Option
Agreement, all outstanding options to purchase Common Stock
provided by the First Option shall on the Termination Date
immediately vest and shall be exercisable in full for a period
of two (2) years following the Termination Date; however, such
outstanding options shall be subject to termination in the
event that it is determined through the procedure described in
Section 3.3(b) of this Agreement, that Xx. Xxxxxx has
materially breached any of the surviving provisions of
Sections 6.1, 6.2, 6.3 or 6.4 of the Prior Agreement. The
provisions of this Section 3.3(i) shall constitute a written
amendment to the First Option Agreement in accordance with the
provisions of paragraph 14(a) of the First Option Agreement.
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(ii) Notwithstanding the exercise provisions of the Second Option
Agreement, all outstanding options to purchase Common Stock
provided by the Second Option shall on the Termination Date
immediately vest and shall be exercisable in full for a period
of two (2) years following the Termination Date; however, such
outstanding options shall be subject to termination in the
event that it is determined through the procedure described in
Section 3.3(b) of this Agreement, that Xx. Xxxxxx materially
breached any of the surviving provisions of Sections 6.1, 6.2,
6.3 or 6.4 of the Prior Agreement. The provisions of this
Section 3.3(ii) shall constitute a written amendment to the
Second Option Agreement in accordance with the provisions of
paragraph 14(a) of the Second Option Agreement.
(iii) Notwithstanding the exercise provisions of the Third Option
Agreement, all outstanding options to purchase Common Stock
subject to the Third Option shall on the Termination Date
immediately vest and shall be exercisable in full for a period
of two (2) years following the Termination Date; however, such
outstanding options shall be subject to termination in the
event that it is determined through the procedure described in
Section 3.3(b) of this Agreement, that Xx. Xxxxxx has
materially breached any of the surviving provisions of
Sections 6.1, 6.2, 6.3 or 6.4 of the Prior Agreement. The
provisions of this Section 3.3(iii) shall constitute a written
amendment to the Third Option Agreement in accordance with the
provisions of paragraph 14(a) of the Third Option Agreement.
(iv) Notwithstanding the exercise provisions of the Fourth Option
Agreement, all outstanding options to purchase Common Stock
subject to the Fourth Option shall on the Termination Date
immediately vest and shall be exercisable in full for a period
of two (2) years following the Termination Date; however, such
outstanding options shall be subject to termination in the
event that it is determined through the procedure described
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in Section 3.3(b) of this Agreement, that Xx. Xxxxxx has
materially breached any of the surviving provisions of
Sections 6.1, 6.2, 6.3 or 6.4 of the Prior Agreement. The
provisions of this Section 3.3(iv) shall constitute a written
amendment to the Fourth Option Agreement in accordance with
the provisions of paragraph 14(a) of the Fourth Option
Agreement.
(v) Notwithstanding the exercise provisions of the Fifth Option
Agreement, all outstanding options to purchase Common Stock
subject to the Fifth Option shall on the Termination Date
immediately vest and shall be exercisable for a period of two
(2) years following the Termination Date; however, such
outstanding options shall be subject to termination in the
event that it is determined through the procedure described in
Section 3.3(b) of this Agreement, that Xx. Xxxxxx has
materially breached any of the surviving provisions of
Sections 6.1, 6.2, 6.3 or 6.4 of the Prior Agreement. The
provisions of this Section 3.3(v) shall constitute a written
amendment to the Fifth Option Agreement in accordance with the
provisions of paragraph 14(a) of the Fifth Option Agreement.
Accordingly, the Company and Xx. Xxxxxx agree that the total number of
shares of Common Stock that have vested as of the Termination Date and are
exercisable pursuant to the Option Agreements referred to above, as amended
hereby, is as set forth on EXHIBIT B attached hereto.
(b) PROCEDURE FOR TERMINATION OF OPTIONS. In the event that it is
determined that Xx. Xxxxxx materially breached the provisions of Section 6.1,
6.2, 6.3 or 6.4 of the Prior Agreement by a Requisite Majority of the Board at a
meeting of which Xx. Xxxxxx has received at least seven (7) days prior written
notice (which notice shall include a statement specifying in reasonable detail
the facts relating to such material breach) and has had a reasonable opportunity
to be heard (and to be represented by counsel), Xx. Xxxxxx'x right to exercise
all outstanding stock options held by him shall immediately terminate. For
purposes of this Agreement, the term "Requisite Majority" is defined to mean a
majority of the following members of the Board: (i) all members of the Board who
are not employees of the Company; and (ii) the Chief Executive Officer (if he or
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she then serves on the Board). If Xx. Xxxxxx disputes the determination of a
Requisite Majority of the Board, as indicated in a written statement to the
Company specifying in reasonable detail the facts upon which Xx. Xxxxxx relies
(the "Gefter Dispute Statement"), such statement to be provided to the Company
within five (5) days after the applicable meeting of the Board, then the issue
of whether Xx. Xxxxxx materially breached the provisions of Section 6.1, 6.2,
6.3 or 6.4 of the Prior Agreement shall be determined by binding arbitration in
accordance with the procedures set forth below. Any such arbitration shall be
conducted on an expedited basis by a single arbitrator mutually acceptable to
the parties, or, if the parties are unable to agree upon a single arbitrator, by
a panel of three arbitrators, one of whom is selected by each of Xx. Xxxxxx and
the Company and the third to be selected by the other two arbitrators (it being
understood that the arbitrator(s) shall be selected by the parties within ten
(10) days after receipt by the Company of the Gefter Dispute Statement). As a
condition to accepting the position of arbitrator, each arbitrator designated by
he parties shall agree to render a decision within thirty (30) days after
commencement of arbitration proceedings, and to commence such proceedings
promptly. Each party shall submit a written statement to the arbitrator(s)
setting forth his or its position, and the arbitrator(s) may, at his or her
discretion, hold a hearing which will not exceed four (4) hours. The ruling of
the arbitrator(s) shall be final and conclusive. In the event that the
arbitrator(s) rules in favor of Xx. Xxxxxx, the outstanding stock options will
again be exercisable to the extent set forth in Section 3.3(a) above. In the
event the arbitrator(s) rules in favor of the Company, all outstanding options
shall remain terminated as of the date of the Board meeting referred to above.
All arbitration costs and reasonable fees and expenses of counsel for both
parties shall be borne by the Company if the arbitrator(s) rules in favor of Xx.
Xxxxxx, or by Xx. Xxxxxx if the arbitrator(s) rules in favor of the Company.
3.4 DIRECTORS AND OFFICERS INSURANCE COVERAGE. Notwithstanding the
provisions of Section 3.2, the Company agrees to maintain Directors and Officers
Liability Insurance Prior Acts coverage for a period of three (3) years after
the Termination Date on substantially the same terms and conditions presently
maintained by the Company as of the Termination Date.
4. Release.
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4.1 RELEASE. Xx. Xxxxxx hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Company, its
officers, directors, subsidiaries, agents and employees from any and all
claims, charges, complaints, demands, actions, causes of action, suits,
rights, debts, sums of money,
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costs, accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature which he ever
had or now has against the Company, its officers, directors, subsidiaries,
agents and employees arising out of any event, circumstance, action or inaction
on or prior to the date hereof, including without limitation, Xx. Xxxxxx'x
employment with the Company or the termination of such employment, all
employment discrimination claims under Title VII of the Civil Rights Act of
1964, 42 U.S.C. ss.2000e et seq., the Massachusetts Civil Rights Act, the Age
Discrimination in Employment Act, 29 U.S.C. ss.621 et. seq., the Americans With
Disabilities Act, 29 U.S.C. ss.706 et. seq., and the National Labor Relations
Act, 29 U.S.C. ss.151 et seq.; claims arising under Xx. Xxxxxx Retirement Income
Act, 29 U.S.C. ss.1001 et seq., and the Family and Medical Leave Act, 29 U.S.C.
ss.2601 et seq., wrongful discharge claims, employment-related breach of
contract claims and all other employment-related statutory or common law claims
and damages; provided, however, that the foregoing release shall not include,
and nothing in this provision or in this Agreement shall be construed as in any
way barring, any event, circumstance, action or inaction on or prior to the date
hereof, including without limitation, Xx. Xxxxxx'x claims based upon the
Company's gross negligence or willful misconduct or claims for alleged breaches
of this Agreement; and provided further that Xx. Xxxxxx shall retain his rights
to indemnification as described in paragraph 9 below.
4.2 THE COMPANY'S RELEASE. The Company, for itself, its officers,
directors, subsidiaries, agents, employees, legal representatives, successors
and assigns, does hereby fully, forever, irrevocably and unconditionally
release, remise and discharge Xx. Xxxxxx and his heirs, successors and assigns
from any and all claims, charges, complaints, demands, actions, causes of
action, suits, rights, debts, sums of money, costs, accounts, reckonings,
covenants, contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including attorneys' fees
and costs) of every kind and nature whatsoever, at law, in equity or otherwise,
which it or they ever had or now have against Xx. Xxxxxx arising out of any
event, circumstance, action or inaction on or prior to the date hereof, except
to the extent that any such claim is based upon Xx. Xxxxxx'x actions or
inactions which do not meet the standard of conduct required for indemnification
as set forth in EXHIBIT C referred to in Section 10 (whether such actions or
inactions were taken or omitted to be taken in his capacity as an employee,
officer or director).
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5. Covenants Not To Xxx.
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5.1 COVENANT NOT TO XXX. Xx. Xxxxxx further represents and warrants
that he has not filed any complaints, charges, or claims for relief against the
Company, its officers, directors, subsidiaries, agents or employees with any
local, state or federal court or administrative agency which currently are
outstanding. If he has done so, he will forthwith dismiss all such complaints,
charges, or claims for relief with prejudice. Xx. Xxxxxx further agrees and
covenants not to bring any complaints, charges or claims against the Company,
its officers, directors, subsidiaries, agents or employees with respect to any
matters within the scope of the release set forth in Section 4.1.
5.2 THE COMPANY'S COVENANT NOT TO XXX. The Company, its officers,
directors, subsidiaries, agents and employees, represent and warrant that they
have not filed any complaints, charges or claims for relief against Xx. Xxxxxx
with any local, state or federal court or administrative agency. If any has done
so he will forthwith dismiss all such complaints, charges or claims for relief
with prejudice. The Company, its officers, directors, subsidiaries, agents and
employees, further agree and covenant not to bring any complaints, charges or
claims against Xx. Xxxxxx with respect to any action taken by Xx. Xxxxxx within
the scope of the release set forth in Section 4.2.
6. NATURE OF AGREEMENT. The Company and Xx. Xxxxxx each represent and
warrant that this Agreement is a severance and settlement agreement and does not
constitute an admission of liability or wrongdoing on the part of either the
Company or Xx. Xxxxxx.
7. AMENDMENT; PARTIES IN INTEREST. This Agreement shall be binding upon
the parties and may not be abandoned, supplemented, changed or modified in any
manner, orally or otherwise, except by an instrument in writing of concurrent or
subsequent date signed by a duly authorized representative of the parties
hereto. This Agreement is binding upon and shall inure to the benefit of the
parties and their respective agents, assigns, heirs, executors, successors and
administrators. In the event of any Change of Control (as defined in the Prior
Agreement), any successor shall succeed to all of the Company's duties,
obligations, rights and benefits hereunder. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise and whether or not after a Change of Control) to all or substantially
all of the business or assets of the Company to assume in writing prior to such
succession and to agree to perform its obligations under this Agreement in the
same manner and to the extent that the
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Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain an assumption of this Agreement prior to the
effectiveness of succession shall be a material breach of this Agreement. As
used in this Agreement, "Company" shall mean the Company as defined above and
any successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
8. VALIDITY. Should any of the provisions of this Agreement or Sections
6.1, 6.2, 6.3 or 6.4 of the Prior Agreement (to the extent they survive pursuant
to Section 2 of this Agreement) be declared or be determined by any court of
competent jurisdiction to be illegal or invalid, the validity of the remaining
parts, terms, or provisions shall not be affected thereby and said illegal and
invalid part, term or provision shall be deemed not to be a part of this
Agreement.
9. CONFIDENTIALITY. Xx. Xxxxxx and the Company understand and agree that,
except as contemplated by Section 12 hereof, the terms and contents of this
Agreement, and the contents of the negotiations and discussions resulting in
this Agreement, shall be maintained as confidential by both parties, their
agents and representatives, and, as to the Company, its officers, directors and
employees, and that none of the above shall be disclosed, except as contemplated
by Section 12 hereof, as may be required by applicable law or legal process or
as otherwise agreed to in writing by each party.
10. INDEMNIFICATION. The Company will indemnify, and advance expenses to,
Xx. Xxxxxx to the full extent provided in (and without limitation of) Article
Eighth of the Company's Bylaws and Charter, a copy of which Article is attached
hereto as EXHIBIT C. The indemnification and expense advancement provisions set
forth in Article Eighth are incorporated herein by reference and shall be fully
effective as if set forth herein, shall constitute an agreement between the
Company and Xx. Xxxxxx and shall not be subject to amendment or revision except
as agreed to in writing by Xx. Xxxxxx and the Company.
11. NON-DISPARAGEMENT. Xx. Xxxxxx understands and agrees that he shall not
make any false, disparaging or derogatory statements in public or private
regarding the Company or any of its officers, directors, employees, agents or
representatives or the Company's business affairs or financial condition nor
engage in conduct intended to be detrimental to the interests of the Company.
The Company agrees that it will not make any false, disparaging or derogatory
statements in public or private, or engage in conduct intended to be detrimental
to the interests of Xx. Xxxxxx, in connection with or concerning Xx. Xxxxxx'x
service
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to the Company or his separation therefrom. Notwithstanding the foregoing,
nothing contained in this Section 11 shall prohibit Xx. Xxxxxx or the Company
from making any statement or engaging in conduct to the extent such statement or
conduct is required by applicable law or legal process.
12. PUBLICITY. Xx. Xxxxxx and the Company will issue a mutually agreeable
press release announcing Xx. Xxxxxx'x separation from the Company, such press
release to be in the form of Exhibit D to this Agreement.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
and agreement between the parties hereto with respect to the severance and
settlement and cancels all previous oral and written negotiations, agreements,
commitments, and writings between the Company and Xx. Xxxxxx, except for the
Option Agreements referred to in Section 3.3 which shall continue, as amended
hereby, in full force and effect.
14. APPLICABLE LAW. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
15. VOLUNTARY ASSENT. Xx. Xxxxxx affirms that no other promises or
agreements of any kind have been made to or with him by any person or entity
whatsoever to cause him to sign this Agreement, and that he fully understands
the meaning and intent of this Agreement. Xx. Xxxxxx states and represents that
he has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney. Xx. Xxxxxx further states and represents that he has
carefully read this Agreement, understands the contents herein, freely and
voluntarily assents to all of the terms and conditions hereof, and signs his
name of his own free act.
16. REIMBURSEMENT OF LEGAL FEES. The Company agrees to pay the legal fees
and expenses incurred by Xx. Xxxxxx in the review and negotiation of this
Agreement in an amount not to exceed $5,000.
17. EXECUTION. This Settlement Agreement may be executed in counterparts,
each of which when so executed shall be deemed to be an original, and which
together shall constitute but one and the same instrument.
18. DUE AUTHORIZATION, VALID AND BINDING. The Company represents and
warrants that this Agreement has been duly authorized by the Company's Board of
Directors, and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
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IN WITNESS WHEREOF, all parties have set their hand and seal to this
Agreement as of the date written above.
IMMULOGIC PHARMACEUTICAL CORPORATION
By: /s/ J. Xxxxxx Xxxx Date: 4 Mar 97
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/s/ Xxxxxxx X. Xxxxxx Date: March 4, 1997
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XXXXXXX X. XXXXXX
The undersigned, for itself and on behalf of Amerindo Technology Growth Fund and
Amerindo Technology Growth Fund II, hereby releases Xx. Xxxxxx to the same
extent as the Company has released Xx. Xxxxxx pursuant to Section 4.2 of this
Agreement, and agrees to be bound by the provisions of Sections 5.2, 9 and the
last two sentences of Section 11 of this Agreement as if it were the Company.
AMERINDO INVESTMENT ADVISORS INC.,
By: /s/ [illegible]
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Name:
Title:
Xx. Xxxxxx hereby releases Amerindo Investment Advisors Inc., Amerindo
Technology Growth Fund and Amerindo Technology Growth Fund II (collectively the
"Amerindo Entities") to the same extent as Xx. Xxxxxx has released the Company
pursuant to Section 4.1 of this Agreement, and agrees to be bound by the
provisions of Sections 5.2, 9 and the first and last sentences of Section 11 of
this Agreement as if the Amerindo Entities were the Company.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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