Exhibit 99.1
SEPARATION AGREEMENT
AGREEMENT dated as of September 16, 2004 (the "Effective Date") between
IPIX Corporation, a Delaware corporation with its principal offices at 0000 Xxxx
Xxxxxx Xxxx, Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000 (the "Company") and
Xxxxxx X. Xxxxxxxxxx ("Employee").
WHEREAS, IPIX Corporation and Employee are parties to an employment
agreement dated July 1, 2001 (the "Employment Agreement");
WHEREAS, the Company and Employee desire to terminate the Employment
Agreement; and
WHEREAS, the Company and Employee desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
Section 1. Termination of Employment Agreement. The Company and Employee
mutually agree to terminate the Employment Agreement, and all rights and duties
arising from it or under it, effective as of September 16, 2004 (the
"Termination Date"), except as specifically provided herein.
Section 2. Severance Payments to Employee; Other Matters.
(a) Within thirty (30) days of the Termination Date, the Company shall pay
any portion of Employee's base salary, vacation time and travel, entertainment
or other business expenses incurred or accrued but not paid, as of the
Termination Date. In addition, the Company shall pay to Employee a severance
payment in cash (the "Severance Payment") equal to $167,500, which will be paid
in six (6) monthly installments, with the first installment beginning on October
1, 2004.
(b) The Company may withhold from any amounts payable under this Agreement
any U.S. federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation. The Company's obligations to make
any payments pursuant to this Section 2 are expressly conditioned on Employee's
continued compliance with the provisions of this Agreement. Employee will
provide to the Company within thirty (30) days of the Termination Date
documentation reasonably required to substantiate the business-related expenses
described in Section 2(a) of this Agreement.
(c) From the Effective Date through March 16, 2005, any options issued to
Employee shall continue to vest in accordance with their terms. Such options
must be exercised on or before June 14, 2005, at which time they shall expire.
(d) The Company shall reimburse Employee for the amount of Employee's
premium payments for group health coverage, if any, elected by Employee pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that Employee shall be solely responsible for all
matters relating to Employee's continuation of coverage pursuant to COBRA,
including (without limitation) Employee's election of such coverage and
Employee's timely payment of premiums; provided further, that upon the earlier
to occur of (A) the time that Employee no longer constitutes a Qualified
Beneficiary (as such term is defined in Section 4980B(g)(1) of the Internal
Revenue Code of 1986, as amended) and (B) March 16, 2005.
Section 3. Conditional Nature of the Severance Payment; Non-Competition
Agreement.
(a) Conditional Nature of the Severance Payment; Non-Competition.
Notwithstanding anything in this Agreement, Employee acknowledges that the
provisions of (i) any confidentiality and invention assignment agreement in
effect as of the Termination Date (the "Confidentiality Agreement") and (ii)
Sections 6.5 (Cooperation), 8 (Post-Employment Activities), 9 (Remedies) and
10.6 (Assistance in Litigation) of the Employment Agreement (the "Employment
Agreement Provisions") shall remain in full force and effect for the time
periods specified therein. Employee agrees and acknowledges that the Employee's
right to receive and keep the severance payments and other benefits set forth in
Section 2 is conditioned upon Employee continuing to observe, and not be in
breach of, the provisions of the Confidentiality Agreement and the Employment
Agreement Provisions. Upon any breach of the Confidentiality Agreement or the
Employment Agreement Provisions, all severance payments pursuant to Section 2 of
this Agreement shall immediately cease, or if already paid, shall be recoverable
in full by the Company.
(b) Exclusions. No provision of this Agreement shall be construed to
preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Employment Agreement or the Confidentiality Agreement.
Section 4. Remedies. Employee's obligations under Section 3 of this
Agreement shall survive the Termination Date. Employee acknowledges that a
remedy at law for any breach or threatened breach by Employee of Section 3 of
this Agreement would be inadequate and Employee therefore agrees that the
Company shall be entitled to injunctive relief in any court of competent
jurisdiction in the case of any such breach or threatened breach. Employee
acknowledges that this Section 4 does not limit the Company's right to seek
monetary damages for breach of this Agreement.
Section 5. Golden Parachute Excise Tax.
(a) Reimbursement. In the event that it shall be determined that any
payment or other benefit by the Company to or for the benefit of Employee under
this Agreement or otherwise, whether paid or payable, but determined without
regard to any additional payments required under this Section (the "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Internal
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Revenue Code (the "Excise Tax"), then Employee shall be entitled to receive (i)
an additional payment from the Company (the "Reimbursement Payment") sufficient
to pay the Excise Tax, and (ii) an additional payment from the Company
sufficient to pay the Excise Tax and federal and state income taxes arising from
the payments made by the Company to Employee pursuant to this sentence.
(b) Determination. Unless the Company and Employee otherwise agree in
writing, any determination required under this Section 5 shall be made in
writing by the Company's primary independent public accounting firm (the
"Accountants"), whose determination shall be conclusive and binding upon
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section 5, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Internal Revenue Code. The Company and Employee shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make their determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section.
Section 6. Release. For and in consideration of the payment to be made and
for other valuable consideration to be provided to Employee pursuant to this
Agreement, Employee, for himself, his heirs, executors, administrators,
trustees, legal representatives, successors and assigns (hereinafter,
collectively referred to as "Releasors"), hereby forever releases and discharges
the Company and any of its past, present or future parent entities, and all of
the partners, subsidiaries, affiliates, divisions, employee benefit and/or
pension plans or funds, successors and assigns of each and any of its or their
past, present or future directors, officers, attorneys, agents, trustees,
administrators, employees, or assigns (whether acting as agents for the Company
or in their individual capacities) (hereinafter collectively referred to as
"Releasees") from any and all claims, demands, causes of action, and liabilities
of any kind whatsoever (upon any legal or equitable theory, whether contractual,
common-law, statutory, federal, state, local, or otherwise), whether known or
unknown, by reason of any act, omission, transaction or occurrence which
Releasors ever had, now have or hereafter can, shall or may have against
Releasees up to and including the Termination Date. Without limiting the
generality of the foregoing, Releasors hereby release and discharge Releasees
from:
(a) any and all claims relating to Employee's employment ("employment" in
this Agreement refers to any remunerative relationship, including without
limitation, any form of independent contractor or consultant relationship);
(b) any and all claims of employment discrimination, harassment and/or
retaliation under any federal, state or local statute or ordinance, including
without limitation, any and all claims under Title VII of the Civil Rights Act,
the Age Discrimination in Employment Act, the Fair Labor Standards Act, the
Family and Medical Leave Act, the Americans with Disabilities Act, the Employee
Retirement Income Security Act, the New York State Executive Law, the New York
City Administrative Code;
(c) any and all claims for tortious conduct, wrongful discharge and/or
breach of employment contract or commission agreement; and
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(d) any all claims for attorney's fees, costs, disbursements and the like
which Employee ever had, now has or hereafter can, shall or may have against
Releasees for, upon or by reason of any act, omission, transaction or occurrence
up to and including the Termination Date.
Section 7. Miscellaneous.
(a) Governing Law/Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the state of Tennessee, without
reference to principles of conflict of laws.
(b) Entire Agreement/Amendments. This Agreement shall supersede the
Employment Agreement in its entirety and contains the entire understanding of
the parties with respect to the termination of the Employment Agreement and any
rights and duties arising under or from it. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein or therein. This Agreement may not be altered, modified, or amended
except by written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Employee and may
be assigned by the Company without the consent of Employee; provided, however,
that the Company shall require any successor to substantially all of the stock,
assets or business of the Company to assume this Agreement.
(f) Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon the personal or legal representatives, executors,
administrators, successors, including successors to all or substantially all of
the stock, business and/or assets of the Company, heirs, distributees, devisees
and legatees of the parties.
(g) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the execution page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the
Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
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(h) Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
By: /s/ Xxxxx X. Xxxxx
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IPIX Corporation
Title: Chairman
Address: 0000 Xxxx Xxxxxx Xxxx
Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
/s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Address: 00000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
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