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Exhibit 10.16
SEVERANCE AGREEMENT AND MUTUAL RELEASE
This Severance Agreement and Mutual Release ("Agreement") is made by and
between SALIX PHARMACEUTICALS, INC. and SALIX PHARMACEUTICALS, LTD. (the
"Company") and Xxxxx Xxxxx ("Employee").
WHEREAS, Employee was employed by the Company;
WHEREAS, the Company and Employee have entered into a Employment,
Confidential Information, Invention Assignment and Arbitration Agreement (the
"Confidentiality Agreement"); and
WHEREAS, the Company and Employee have mutually agreed to terminate the
employment relationship 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 Employee (collectively referred to as "the Parties") hereby agree as
follows:
1. Consideration. The Company agrees to continue Employee's current base
salary, less applicable withholdings, in accordance with the Company's payroll
practices through the earlier of: (a) April 11, 1999 or (b) the date Employee
obtains other Employment (the "payment period"). Employee shall remain an
employee and officer of the Company during the payment period subject to all of
the standard terms and conditions of employment. Employee will resign effective
the earlier of April 11, 1999 or when Employee begins other employment. Employee
agrees to notify the Company immediately after obtaining other employment.
2. Duties. During the payment period, Employee must perform transitional
and other duties during regular business hours as reasonably requested by Xxxxx
X. Xxxxxxxx or any other designated person. Employee understands that the
payments in Paragraph 1, above, are in excess of that which the Company would
normally owe Employee for the performance of transitional and other duties.
3. Vesting of Stock. The Parties agree that for purposes of determining
the number of shares of the Company's common stock which Employee is entitled to
purchase from the Company, Employee will be entitled to continue vesting of
stock until April 11, 1999. Employee agrees that the exercise of any vested
options must be pursuant to the terms and conditions of the Company's Stock
Option Plan and the Stock Option Agreement(s) between Employee and the Company.
4. Benefits. Employee will be entitled to accrual of employee benefits,
including health benefits, until April 11, 1999. Employee shall have the right
to convert his health insurance benefits to individual coverage pursuant to
COBRA at the end of the payment period.
5. Conditions to Payment of Salary and Benefits. The payments, stock
vesting, and benefits set forth in Paragraphs 1, 3 and 4, above, will cease
immediately if Employee begins working or consulting elsewhere, regardless of
the salary or job duties being performed by Employee elsewhere.
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6. Confidential Information. Employee 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 Employee and the Company. Employee shall
return all the Company property and confidential and proprietary information in
his possession to the Company within three business days of the earlier of (a)
the request of the Company or (b) his resignation.
7. Payment of Salary. Employee acknowledges and represents that the
Company has paid all salary, wages, accrued vacation, commissions and any and
all other benefits due to Employee.
8. Release of Claims. The Parties agree that the foregoing consideration
represents settlement in full of all outstanding obligations owed by either one
to the other. Employee 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, 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 of this Agreement including, without limitation,
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to, or arising from, Employee'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; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
defamation; 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 California Fair Employment and Housing Act, and Labor Code
section 201, et seq.;
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(e) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(f) any and all claims for attorneys' fees and costs.
The Company and Employee 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.
9. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has at least
forty-five (45) days within which to consider this Agreement; (c) upon request,
he will be advised in writing of the class, unit, or group of individuals
covered by the voluntary retirement program by the Company, and the job titles
and ages of all individuals who participated and did not participate in the
program; (d) he has at least seven (7) days following the execution of this
Agreement by the parties to revoke the Agreement; and (e) this Agreement shall
not be effective until the revocation period has expired.
10. 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. Employee 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 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.
Employee 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.
11. Application for Employment. Except as provided for herein, Employee
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
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employment or re-employment with the Company. Employee further agrees that he
will not apply for employment with the Company, its subsidiaries or related
companies or any successor.
12. Confidentiality. The Parties hereto each agree to use their best
efforts to maintain in confidence the existence of this Agreement, the contents
and terms of this Agreement, and the consideration for this Agreement
(hereinafter collectively referred to as "Settlement Information"). Each Party
hereto agrees to take every reasonable precaution to prevent disclosure of any
Settlement Information to third parties, and each agrees that there will be no
publicity, directly or indirectly, concerning any Settlement Information. The
Parties hereto agree to take every reasonable precaution to disclose Settlement
Information only to those employees, officers, directors, attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Settlement Information.
13. Non-Disparagement.The Parties agree to refrain from any defamation,
libel or slander of the other and agree not to interfere with the other's
relationships with third parties.
14. No Admission of Liability. The Parties understand and acknowledge that
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.
15. 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 Santa Xxxxx 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.
16. 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.
Employee 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.
17. No Representations. Neither party has relied upon any representations
or statements made by the other party hereto which are not specifically set
forth in this Agreement.
18. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision. 19.
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19. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning Employee's separation
from the Company, and supersedes and replaces any and all prior agreements and
understandings concerning Employee's relationship with the Company and his
compensation by the Company.
20. No Oral Modification. This Agreement may only be amended in writing
signed by Employee and the President of the Company.
21. Governing Law. This Agreement shall be governed by the laws of the
State of California.
22. Effective Date. This Agreement is effective seven days after it has
been signed by both Parties.
23. Counterparts. This Agreement may be executed in counterparts or by
facsimile, and each counterpart or facsimile copy 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.
24. 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:
(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.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
SALIX PHARMACEUTICALS, INC. and
SALIX PHARMACEUTICALS, LTD.
Dated: January 6, 1999 By /s/ Xxxxx Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Xxxxx Xxxxx, an individual
Dated: January 6, 1999 By /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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