RETIREMENT AND CONSULTING AGREEMENT
This Retirement and Consulting Agreement (this "Agreement") is
made by and between XXXXXXXXXX LABORATORIES, INC., a Texas
corporation ("Xxxxxxxxxx"), and XXXXX X. XXXXX, M.D., Ph.D.
("Xxxxx"), for the purpose of documenting the terms of Xxxxx'x
retirement as an officer and employee of Xxxxxxxxxx and his
engagement as a consultant to Xxxxxxxxxx, all as set forth below:
1. Retirement. Effective as September 30, 1997 (the
Retirement Date ), (a) Xxxxx hereby voluntarily retires from all
positions that he now occupies as an employee and/or officer of
Xxxxxxxxxx and any of its subsidiary corporations, including but not
limited to his position as Executive Vice President, Research and
Development, of Xxxxxxxxxx; and (b) the letter agreement between
Xxxxxxxxxx and Xxxxx dated December 12, 1994, and signed by Xxxxx on
December 14, 1994, is hereby terminated in its entirety.
(a) Compensation and Benefits. Through the Retirement
Date, Xxxxxxxxxx shall continue to pay Xxxxx his regular
compensation at the rate currently in effect, less all legal
deductions, and all benefits to which he is currently entitled
under Xxxxxxxxxx'x existing employee benefit plans and policies.
Xxxxxxxxxx shall pay Xxxxx for any vacation time that is accrued
and unused as of the Retirement Date. Xxxxx acknowledges that
he is not and will not be entitled to receive anything under
Xxxxxxxxxx'x 1995 Management Compensation Plan.
(b) Reimbursement of Expenses. Xxxxxxxxxx shall reimburse
Xxxxx for all reasonable and properly reimbursable business
expenses incurred by him prior to the Retirement Date promptly
a f ter Xxxxx timely submits a proper expense report and
supporting documentation to Xxxxxxxxxx.
(c) Stock Options. On the Retirement Date, Xxxxx shall
surrender to Xxxxxxxxxx all of the stock options previously
granted to him by Xxxxxxxxxx that are then outstanding (the "Old
Options"), subject to his receipt of the New Options provided
for in Section 4(d) of this Agreement.
(d) Authority. After the Retirement Date, (i) Xxxxx will
not be, and will not hold himself out as being, a director,
officer or employee of Xxxxxxxxxx or any of its subsidiary
c o r porations, and (ii) Xxxxx will not be obligated or
authorized, and will not hold himself out as being authorized,
t o make any representations, enter into any contracts,
commitments, or obligations, or perform any other acts of any
kind whatsoever on behalf of Xxxxxxxxxx or any of its subsidiary
corporations, except to the extent, if any, that the President
or a Vice President of Xxxxxxxxxx expressly authorizes him to do
so in connection with his performance of Services, as that term
is defined in Section 3 of this Agreement.
2. Consulting Term. Beginning on October 1, 1997, Xxxxx shall
serve as a consultant to Xxxxxxxxxx for a term (the "Consulting
Term") that shall end on the earliest to occur of the following
dates:
(a) the first anniversary of the Retirement Date;
(b) the date of Xxxxx'x death;
(c) the date on which Xxxxxxxxxx'x Board of Directors
elects to terminate the Consulting Term for "Cause,"
as hereinafter defined;
(d) the date on which Xxxxx elects to terminate the
Consulting Term by written notice to Xxxxxxxxxx due to
a material breach of this Agreement by Xxxxxxxxxx; or
(e) the date on which Xxxxxxxxxx and Xxxxx mutually agree
in writing to terminate the Consulting Term.
The Consulting Term shall not terminate solely by reason of
Xxxxx'x becoming a part-time or full-time employee of a third party,
provided he complies with the terms of this Agreement.
This Agreement may be renewed for up to five (5) additional
one-year terms upon the written agreement of both parties.
As used in this Agreement, the term "Cause" shall mean (i)
any act by Xxxxx that is, in the good faith opinion of Xxxxxxxxxx'x
Board of Directors, adverse to the best interests of Xxxxxxxxxx, or
(ii) the breach by Xxxxx of any of his obligations under this
Agreement or the Confidentiality Agreement referred to in Section 8
hereof.
The expiration or termination of the Consulting Term shall
not terminate any rights of either party that shall have accrued at
or prior to the time of such expiration or termination, including but
not limited to the right of either party to recover damages from the
other party due to the other party's breach of this Agreement.
3. Consulting Services. During the Consulting Term, Xxxxx
shall perform for Xxxxxxxxxx such consulting services as Xxxxxxxxxx
from time to time reasonably requests ("Services"). The amount of
time to be spent by Xxxxx in performing Services requested by
Xxxxxxxxxx shall be agreed to by Xxxxx and Xxxxxxxxxx in advance of
the performance of such Services. The Services requested by
Xxxxxxxxxx shall be of the same general nature as the services that
Xxxxx performed for Xxxxxxxxxx while in its employ and may include
designing, or advising and assisting in the designing of, clinical
trials and selecting, or advising and assisting in the selection of,
clinical research organizations. The Services shall be performed by
Xxxxx at such times and upon such schedule as shall be mutually
agreeable to Xxxxx and Xxxxxxxxxx. Notwithstanding the foregoing,
however, Xxxxx shall not be required to perform Services for more
than fifteen (15) days during any "Contract Quarter," as that term is
hereinafter defined, unless he and Xxxxxxxxxx so agree. As used
herein, the term "Contract Quarter" means a period of three (3)
consecutive months beginning on the first day of the first, fourth,
seventh or tenth month of the Consulting Term. Xxxxxxxxxx shall not
be obligated to request the performance of any Services by Xxxxx.
4. Consulting Compensation and Benefits.
(a) Compensation. The compensation payable by Xxxxxxxxxx
to Xxxxx for his agreement to perform and his performance of Services
under this Agreement shall be as follows:
(i) Retainer. During the Consulting Term, Xxxxxxxxxx
shall pay Xxxxx a retainer of $3,333.33 per month, payable on
the fifteenth day of each calendar month (or, if the fifteenth
day of a month is a Saturday, Sunday or holiday, on the last
business day preceding the fifteenth day of such month).
Xxxxxxxxxx shall deduct from such retainer the cost payable by
Xxxxx for participating in Xxxxxxxxxx'x group insurance plan(s)
as contemplated by Section 4(c) of this Agreement.
(ii) Fees for Services. The retainer payments made by
Xxxxxxxxxx pursuant to Section 4(a)(i) hereof shall constitute
payment in full to Xxxxx for his performance of Services for up
to fifteen (15) days during each Contract Quarter. If
Xxxxxxxxxx and Xxxxx agree that he shall spend in excess of
fifteen (15) days during any Contract Quarter performing
Services, Xxxxxxxxxx shall pay Xxxxx an additional consulting
fee at the rate of $375 per hour for the excess time that he
spends performing such Services. Any such additional consulting
fees shall be paid by Xxxxxxxxxx to Xxxxx promptly after he
submits to Xxxxxxxxxx a proper xxxx for the Services performed.
(b) Reimbursement of Expenses. Xxxxxxxxxx shall reimburse
Xxxxx for all reasonable and properly reimbursable business expenses
incurred by him during the Consulting Term in connection with his
performance of Services (including reasonable expenses for travel,
meals and lodging, if he is required to travel in connection with the
performance of Services), provided (i) Xxxxx obtains advance written
authorization from the President or a Vice President of Xxxxxxxxxx to
incur such expenses and (ii) Xxxxx timely submits a proper expense
report and supporting documentation to Xxxxxxxxxx.
(c) Group Insurance. During the Consulting Term, Xxxxx
may participate in Xxxxxxxxxx'x group insurance plan(s), subject to
the terms of such plan(s) and provided he timely pays any cost that
he is required to pay in connection therewith. Unless earlier
terminated in accordance with the terms of such plan(s), Xxxxx'x
participation in such plan(s) shall terminate upon the expiration or
termination of the Consulting Term, except to the extent (if any)
that he is entitled, and elects, to continue insurance coverage
thereafter at his own expense pursuant to the Consolidated Omnibus
Budget Reconciliation Act.
(d) Stock Options. In consideration of Xxxxx'x agreement
to all of the terms and conditions of this Agreement, and also in
consideration of and subject to Xxxxx'x surrender to Xxxxxxxxxx on
the Retirement Date of all of the Old Options, Xxxxxxxxxx shall grant
to Xxxxx, effective as of the first day of the Consulting Term and
pursuant to Xxxxxxxxxx'x 1995 Stock Option Plan, as amended (the
"Option Plan"), new stock options (the "New Options") having
substantially the same terms and conditions as the unexercised
portions of the Old Options, including the right to purchase the same
numbers of shares of Xxxxxxxxxx'x Common Stock at the same times and
for the same prices as he would have been entitled to purchase them
under the Old Options if he had continued as an employee of
C a r r i n g ton and the Old Options had remained in effect.
Notwithstanding the foregoing, the New Options (i) shall not be
incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, (ii) shall expire and
become null and void no later than upon the expiration of thirty (30)
days from the date on which the Consulting Term expires or
terminates, for any reason other than Xxxxx s death, and (iii) shall
comply with the provisions of Article V and all other applicable
provisions of the Option Plan.
5. Independent Contractor. During the Consulting Term, Xxxxx
shall be an independent contractor of Xxxxxxxxxx and shall not be
considered an employee of Xxxxxxxxxx for any purpose whatsoever.
Accordingly, Xxxxxxxxxx will not withhold any amounts for income or
employment taxes from the retainer payments or fees that it pays him
under Section 4(a) of this Agreement, and Xxxxx shall be responsible
for paying all income and self-employment taxes payable with respect
to such compensation.
6. A. General Release. Xxxxx and his family members, heirs,
successors, and assigns (hereinafter referred to collectively as the
"Releasing Parties") hereby release, acquit, and forever discharge
C a r rington, its subsidiary corporations and their respective
shareholders, directors, officers, fiduciaries, agents, servants,
employees, representatives, attorneys, insurers, successors, and
assigns (collectively, the "Released Parties") from any and all
claims, demands, and causes of action of every kind and character,
whether vicarious, derivative, or direct, that any of the Releasing
Parties now has or may hereafter have or assert against any or all of
the Released Parties growing out of, resulting from, or connected in
any way with Xxxxx'x employment or his retirement from employment
with Xxxxxxxxxx, including but not limited to any and all claims for
damages (actual, exemplary, liquidated, or unliquidated), back pay,
future pay, deferred compensation, bonuses, commissions, severance
p a y ments, vacation and leave benefits, unreimbursed business
expenses, overtime compensation, reinstatement or priority placement,
past and future medical or other employee benefits for Xxxxx or his
dependents, employee retirement benefits, contributions to company-
sponsored 401(k) plans (except as presently vested in any savings
plan sponsored by Xxxxxxxxxx in which Xxxxx is a participant),
medical and counseling costs, injunctive relief, declaratory relief,
attorney's fees, costs of court, disbursements, interest, or any
other form whatsoever of legal or equitable relief to which any of
the Releasing Parties claims or might claim entitlement as a result
of any alleged act or omission of any of the Released Parties,
including but not limited to any alleged unlawful age discrimination
or any other form of unlawful employment discrimination, retaliation,
wrongful termination, breach of contract (express or implied),
tortious interference with contract, promissory estoppel, detrimental
reliance, negligent or intentional infliction of emotional distress,
negligent hiring and supervision, assault, battery, defamation of
character, any alleged act of harassment or intimidation, negligent
or intentional misrepresentation or fraud, invasion of privacy, or
any other intentional or negligent tort, or any alleged violation of
the Age Discrimination in Employment Act of 1967, Title VII of the
Civil Rights Act of 1964, the Americans With Disabilities Act of
1990, the Family and Medical Leave Act of 1993, the Employee
Retirement Income Security Act of 1974, the Fair Labor Standards Act,
the Fair Credit Reporting Act, the Texas Commission on Human Rights
Act, the Texas Wage Payment Statute, the public policy of the United
States, the State of Texas, or any other state, or any other federal
or state statutory or common law, or any other alleged adverse
employment action by any of the Released Parties, and all other loss,
expense, or detriment of every kind and character, whether past or
future, that any of the Releasing Parties may have sustained or may
hereafter sustain by reason of any act or omission of any of the
Released Parties growing out of, resulting from, or connected in any
way with Xxxxx'x employment or his retirement from employment with
Xxxxxxxxxx. IT IS THE EXPRESS INTENTION AND AGREEMENT OF THE PARTIES
THAT THE FOREGOING PROVISIONS OF THIS SECTION 6 RELEASE THE RELEASED
PARTIES FROM ANY AND ALL LIABILITY FOR THEIR OWN NEGLIGENCE. The
preceding provisions of this Section 6 do not apply to any rights or
claims that may arise after the date this Agreement is executed by
Xxxxx.
B. Release by Xxxxxxxxxx. Xxxxxxxxxx hereby releases,
acquits and forever discharges Shand from any and all claims, demands
and causes of action of every kind and character that Xxxxxxxxxx now
has or may hereafter have or assert against Xxxxx growing out of,
resulting from or connected in any way with Xxxxx s employment or the
termination of his employment with Xxxxxxxxxx. This general release
does not apply to any rights or claims that may arise after the date
the Agreement is executed by Xxxxxxxxxx.
7. Nondisparagement. Xxxxx shall not make any statements,
orally or in writing, or engage in any other acts that would directly
or indirectly cause any harm or damage to Xxxxxxxxxx or any of the
other Released Parties. Likewise, Xxxxxxxxxx shall not make any
statements, orally or in writing, or engage in any other acts that
would directly or indirectly cause any harm or damage to Xxxxx.
8. Confidentiality Obligations. All agreements and
obligations, including the obligation of confidentiality, set forth
in the Employee's Confidentiality Agreement dated January 16, 1995
between Xxxxxxxxxx and Xxxxx (the "Confidentiality Agreement") shall
continue in effect notwithstanding Xxxxx'x retirement from employment
with Xxxxxxxxxx and shall be applicable during the Consulting Term.
To the extent that the Confidentiality Agreement imposes obligations
upon Xxxxx for any period(s) following the termination of his
employment with Xxxxxxxxxx, those obligations shall continue in
effect for equal period(s) following the expiration or termination of
the Consulting Term. In addition, Xxxxx shall hold in confidence the
terms of this Agreement and shall not disclose the same to any
person, except that he may disclose the same to his spouse, attorney,
and accountant or tax return preparer if such persons have agreed to
keep such information confidential, and he may disclose the same if
and to the extent that such disclosure is required by law or judicial
process.
9. Attorneys' Fees. If either party to this Agreement
institutes any action or proceeding in any court to enforce any
provision hereof or to recover any damages by reason of the breach of
any provision hereof or seeking any other judicial remedy with
respect hereto, the prevailing party shall be entitled to collect
from the other party hereto such costs incurred in connection with
such action or proceeding (including but not limited to court costs
and reasonable attorneys' fees) as the court shall allow.
10. Effective Period of Offer. Xxxxxxxxxx'x offer of the terms
set forth in this Agreement will expire at 12:01 a.m. on the twenty-
second day following the date of Xxxxxxxxxx'x execution of this
Agreement, i.e., on September 5, 1997 Xxxxx may accept this offer at
any time before such expiration by executing this Agreement and
returning it to Xxxxxxxxxx.
11. Effective Date of Agreement. This Agreement will become
effective and enforceable on the expiration of seven (7) days after
Xxxxx'x execution of this Agreement (the "Effective Date"). At any
time before the Effective Date, Xxxxx may revoke his acceptance of
this Agreement.
12. Consultation with an Attorney. Xxxxxxxxxx hereby advises
Xxxxx that he has the right to consult an attorney before executing
this Agreement.
13. Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed given when
delivered to the addressee in person, sent to the addressee by
telefacsimile transmission to the telephone number at which the
a d d r essee normally receives telefacsimile communications, or
deposited in the United States mail, postage prepaid, certified or
r e g istered mail, return receipt requested, addressed to the
appropriate party at the address set forth opposite such party's name
below, or at such other address as such party shall have theretofore
designated by written notice given to the other party in accordance
with this section:
Xxxxxxxxxx: Xxxxxxxxxx Laboratories, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Xxxxx: Xx. Xxxxx X. Xxxxx
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
14. Miscellaneous. Xxxxx and Xxxxxxxxxx agree that this
Agreement and the Confidentiality Agreement (which are hereinafter
collectively called the "Final Agreement") (a) contain and constitute
the entire understanding and agreement between them regarding the
subject matter hereof; (b) contain captions and definitions that are
included only for convenience of reference and are not intended and
shall not be construed to change the express provisions of the Final
Agreement; (c) supersede and cancel any previous negotiations,
agreements, commitments and writings regarding the subject matter of
the Final Agreement; (d) may not be released, discharged, abandoned,
supplemented, changed or modified in any manner except by a writing
of concurrent or subsequent date signed by both parties hereto; (e)
are binding on and shall inure to the benefit of Shand, his heirs,
successors and assigns, and Xxxxxxxxxx and its successors and
assigns, and that the terms of Section 6 hereof shall inure to the
benefit of and be enforceable by all of the Released Parties; and (f)
shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States.
Xxxxx and Xxxxxxxxxx further agree that (i) if any
provision of this Agreement is held to be unenforceable, such
provision shall be considered to be separate, distinct, and severable
from the remaining provisions of this Agreement and shall not affect
the validity or enforceability of such remaining provisions, all of
which shall remain in full force and effect; and (ii) if any
provision of this Agreement is held to be unenforceable as written
but may be made to be enforceable by limitation thereof, then such
provision shall be deemed to be so limited and shall be enforceable
to the maximum extent permitted by applicable law.
SIGNED on the dates set forth below.
XXXXXXXXXX LABORATORIES, INC.
Dated: August 14, 1997 By: /s/ Xxxxxxx X Xxxxxx
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Xxxxxxx X. Xxxxxx, Ph.D., X.Xx.
President & Chief Executive Officer
Dated: August 14, 1997 By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX, M.D., Ph.D.
