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Exhibit 10.17
TRANSITION AGREEMENT AND MUTUAL RELEASE
This Transition Agreement and Mutual Release ("Agreement") is made by
and between Anergen, Inc. (the "Company"), and Xxxx X. Xxxxxx ("Executive").
WHEREAS, Executive was employed by the Company.
WHEREAS, the Company and Executive have mutually agreed to terminate the
employment relationship with the Company as of April 30, 1997 (the "Effective
Date") and to release each other from any claims arising from or related to the
employment relationship.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Executive (collectively referred to as the "Parties") hereby agree
as follows:
1. Resignation. Executive shall resign from his position as Vice
President, Finance and Chief Financial Officer of the Company effective as of
the Effective Date.
2. Consideration.
(a) Salary. The Company will pay Executive on the Effective Date
all salary earned through the Effective Date less applicable withholding. In
addition, the Company agrees to pay to Executive on the Effective Date in lieu
of any other compensation payable a lump sum of One Hundred Thirteen Thousand
Two Hundred Fifty Dollars ($113,250) (less applicable withholding). The
Executive will not participate in any bonus plan or any other executive
compensation program other than as provided in this Section.
(b) Benefits. Executive's COBRA benefit period shall begin on May
1, 1997. Through October 31, 1997, the Company shall pay the cost of Executive's
COBRA coverage. Notwithstanding the foregoing, in the event comparable benefits
(including pregnancy and child birth coverage) are provided by other employment
during the foregoing period, Executive shall immediately notify the Company, and
the Company will no longer be obligated to pay the cost of Executive's COBRA
coverage beginning on the first day of the month next following the
notification. The Company shall pay the annual premium for the term insurance on
Executive's life, which will become due on approximately September 30, 1997.
(c) Stock Options. The Company shall amend all of Executive's
Incentive Stock Option Agreements effective as of the date hereof to (i)
accelerate and immediately vest Executive with all options to acquire shares of
the Company's Common Stock which were unvested as of such date, and (ii) extend
the period of exercisability of all options to acquire shares of the Company's
Common Stock to two (2) years from the Effective Date. Executive acknowledges
that such amendment to his Incentive Stock Option Agreements will convert all
such options from Incentive
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Stock Options as defined under Section 422 of the Internal Revenue Code into
Nonstatutory Stock Options. No stock options will be granted to Executive for
fiscal year 1996 or 1997 performance. The exercise of the options herein will
continue to be subject to all of the provisions of the Incentive Stock Option
Agreement.
(d) Conferences. The Company shall pay the registration fees for
Executive's attendance at the ABFO Conference to be held in San Diego,
California, June 3-6, 1997. The Company shall reimburse Executive for all
reasonable expenses incurred by him in attending the ABFO Conference such as
airfare, hotel and meals. All such expense reimbursement requests must be
submitted in standard expense report format and are subject to standard review
for reasonableness.
The Company confirms that it has paid the registration
fees and airfare for Executive's attendance at the BIO conference to be held in
Houston, Texas, June 8-13, 1997. All other expenses incurred by Executive in
attending the BIO conference shall be his responsibility, subject to payment by
the Company pursuant to Paragraph 13 below.
(e) Vacation Pay; Expense Reimbursement. Within three (3)
business days following the Effective Date, the Company shall pay to Executive
all accrued but unused vacation time and all reasonable and appropriate expense
reimbursement requests which have been submitted in standard expense report
format.
3. Confidential Information. Executive shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Executive and the Company. Executive shall
return all the Company property and confidential and proprietary information in
his possession to the Company on the date of this Agreement.
4. Release of Claims. Executive agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Executive
by the Company. Executive and the Company, on behalf of themselves, and their
respective heirs, family members, executors, officers, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns, hereby fully and forever
release each other and their respective heirs, family members, executors,
officers, directors, employees, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessor and successor corporations, and
assigns to the extent permitted by law and the articles of incorporation or
bylaws of the Company, from, and agree 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 any of them may
possess arising from any omissions, acts or facts that have occurred up until
and including the Effective Date including, without limitation,
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(a) any and all claims relating to or arising from Executive's
employment relationship with the Company and the termination of that
relationship;
(b) any and claims relating to, or arising from, Executive's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, 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 for wrongful discharge of employment;
termination in violation of public policy; discrimination; 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 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 Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, Older Workers Benefit Protection
Act; the California Fair Employment and Housing Act, and Labor Code section 201,
et seq. and section 970, et seq.;
(e) any and all claims for violation of the federal, or any
state, constitution;
(f) any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and
(g) any and all claims for attorneys' fees and costs.
The Company and Executive 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. This release does not extend to any obligations incurred under
this Agreement or any of Executive's Stock Option Agreements.
5. Civil Code Section 1542. The Parties represent that they are not
aware of any claim by either of them other than the claims that are released by
this Agreement. Executive and the Company acknowledge that they have been
advised by legal counsel and are familiar with the provisions of California
Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO
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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.
Executive and the Company, being aware of said 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.
6. No Pending or Future Lawsuits. Executive represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Executive also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
7. Application for Employment. Executive 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 right,
or alleged right, of employment or re-employment with the Company. Executive
further agrees that he will not apply for employment with the Company, its
subsidiaries or related companies, or any successor.
8. Confidentiality. The Parties represent and warrant that they have not
disclosed to anyone other than their attorneys, tax advisors or Executive's
spouse the proposed monetary consideration involved in the negotiations that led
to this Agreement or the terms of this Agreement, and except that they may
provide testimony or documents pursuant to a valid subpoena as provided for
below, the parties agree that they will keep the existence of this Agreement and
the terms and amounts contained in this Agreement completely confidential and
will not hereafter disclose any information contained in this Agreement to
anyone, other than to their attorneys, Executive's spouse or tax advisors, and,
as for the Company, those who have a reasonable business-related need to know
such information, and in each instance only if each said person to whom
disclosure is made first agrees to maintain full confidentiality in accordance
with the terms of this Agreement. Notwithstanding the foregoing, the Parties may
make disclosure as may be required by Rules and Regulations of the Securities
and Exchange Commission or other governmental agency.
9. No Cooperation. Executive agrees he will not act in any manner that
might materially damage the business of the Company. Executive agrees that he
will not counsel, cooperate with 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 Company and/or any
officer, director, employee, agent representative, shareholder or attorney of
the Company, unless under a subpoena or other court order to do so. If served
with any subpoena requiring the giving of testimony or documents related to the
matters covered by this Agreement, a party hereto or his or its attorney will
give written notice of same to the other party within five (5) working days of
receipt of such subpoena, providing that such notice shall in no event be
received less than seventy-two (72) hours before the obligation to testify or
produce documents matures, unless the subpoena does not afford such time, in
which case notice shall be given immediately. Notwithstanding the foregoing,
Executive shall not be precluded from accepting employment with a company which
may compete
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fairly and non-tortiously with the Company, nor shall it preclude Executive from
performing the normal duties which may be required by such employment.
10. Non-Disparagement. Each Party agrees to refrain from any
disparagement, criticism, defamation, libel or slander of the other, or tortious
interference with the contracts and relationships of the other. All inquiries by
potential future employers of Executive will be directed to the Company's Human
Resources Consultant. The Company's Human Resources Consultant shall stress the
positive aspects of Executive's employment with the Company, and shall not
disparage, criticize. defame, liable or slander Executive.
11. Tax Consequences. The Company makes no representations or warranties
with respect to the tax consequences of the payment of any sums to Executive
under the terms of this Agreement. Executive agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid hereunder by the Company and any penalties or assessments thereon.
Executive 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 Executive's failure to pay federal or state taxes or damages
sustained by the Company by reason of any such claims, including reasonable
attorneys' fees.
12. 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 hereto, or either of them, either previously or
in connection with this Agreement shall be deemed or construed to be (a) an
admission of the truth or falsity of any claims heretofore made or (b) an
acknowledgment or admission by either party of any fault or liability whatsoever
to the other party or to any third party.
13. Costs. Except as set forth in this Paragraph 13, the Parties shall
each bear their own costs, expert fees, attorneys' fees and other fees incurred
in connection with this Agreement. Executive shall submit to the Company
invoices for (i) the expenses incurred in attending the BIO conference in
Houston, Texas (in addition to the registration fees and airfare already paid by
the Company), (ii) costs in maintaining a home office, and (iii) attorney's fees
and costs incurred in negotiating this Agreement. The Company shall pay all such
submitted invoices direct to the respective vendors up to an aggregate of
$3,500.
14. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, shall be subject to binding arbitration in San Mateo County
before the American Arbitration Association under its California Employment
Dispute Resolution Rules, or by a judge to be mutually agreed upon. 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
arbitration shall be awarded its reasonable attorney's fees and costs. Any
litigation brought in
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connection with this Agreement shall be filed and maintained in the California
Superior Court for the County of San Mateo.
15. Authority. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Executive represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.
16. 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. The titles contained in
this Agreement are for the convenience of the parties, are not part of this
Agreement and shall not be used in interpreting its terms.
17. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, it shall be adjusted, if possible, in order to achieve the intent of the
parties to this Agreement to the extent possible; and this Agreement shall
continue in full force and effect with such adjusted provision, or if necessary,
without said provision.
18. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning Executive's
separation from the Company, and supersedes and replaces any and all prior
agreements and understandings concerning Executive's relationship with the
Company, the termination thereof, and his compensation by the Company.
19. No Oral Modification. This Agreement may only be amended in writing
signed by Executive and the President of the Company.
20. Governing Law. This Agreement shall be governed by the laws of the
State of California, without regard to conflict of laws principles.
21. 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.
22. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
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(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.
ACCEPTED AND AGREED TO:
Dated: April __, 1997 By
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Xxxxx X. Xxxxxxx, M.D.
President and Chief Executive Officer
EXECUTIVE
Dated: April 14, 1997 --------------------------------------
Xxxx X. Xxxxxx
