Exhibit 99.3
TERMINATION, SETTLEMENT AND RELEASE AGREEMENT
This Termination, Settlement and Release Agreement (the "Termination
Agreement") is made this 31st day of October, 2004 ("Effective Date"), by and
between PharmaFrontiers Corp., a Texas corporation (the "Company" or "Pharma"),
and R. Xxxxx Xxxxxxxxx ("Xxxxxxxxx").
R E C I T A L S
WHEREAS, Xxxxxxxxx is engaged as the Vice President of Corporate
Development under that certain Employment Agreement between Xxxxxxxxx and the
Company (the "Employment Agreement");
WHEREAS, Xxxxxxxxx is a member of the Scientific Advisory Board of the
Company;
WHEREAS, the Company and Xxxxxxxxx desire to terminate the Employment
Agreement and, in connection with such termination, as of the Effective Date,
Xxxxxxxxx agrees to settle any claims that he may have with the Company and
release the Company and Pharma from any liability he may claim;
WHEREAS, the Company has agreed to repurchase from Xxxxxxxxx certain of
shares of Company Securities (as defined below), as provided in this Termination
Agreement, in full and complete satisfaction of any compensation which Xxxxxxxxx
may be entitled to as contemplated by the Employment Agreement or any other
verbal agreement with the Company;
WHEREAS, upon the Effective Date, Xxxxxxxxx agrees to resign from his
positions as Vice President of Corporate Development and member of the
Scientific Advisory Board of the Company;
NOW, THEREFORE, in consideration of the execution, delivery and
performance of this Termination Agreement, and for other good and valuable
consideration, the parties hereto intending to be legally bound, mutually agree
as follows:
1. CAPITALIZED TERMS. Unless otherwise defined herein, capitalized
terms shall have the meanings set forth in the Employment Agreement which was
signed by Xxxxxxxxx on April 28, 2004.
2. CONTINUED OBLIGATIONS, TERMINATION, RESIGNATION AND PAYMENT.
(A) TERMINATION OF EMPLOYMENT AGREEMENT. As of the Effective
Date, the parties hereby terminate the Employment Agreement and the
Company hereby releases Xxxxxxxxx from any and all further obligations
arising under the Employment Agreement; provided, however, that
Xxxxxxxxx shall continue to be bound by the Confidential and
Proprietary Information, Inventions and Other Intellectual Property
provisions and any other provision that by its terms survive the
expiration of the Employment Agreement, except the
Noncompetition/No-Hire provision.
(B) RESIGNATION. Xxxxxxxxx hereby resigns his position as Vice
President of Corporate Development and member of the Scientific
Advisory of the Company effective as of the Effective Date.
(C) PAYMENT BY THE COMPANY. The Company agrees to repurchase
from Xxxxxxxxx 400,000 of Xxxxxxxxx'x options to purchase Company
common stock ("Company Securities") for $37,500 upon the closing of the
sale of securities resulting in gross proceeds of at least $5 million
in one or a series of equity or debt financings by the Company
commencing after July 1, 2004 ("Financings"), which Financings include
the Company's exchangeable, convertible, subordinated notes. Xxxxxxxxx
agrees that the Company Securities owned by Xxxxxxxxx are free and
clear of any liens, pledges, restrictions or security interests.
3. WAIVER AND RELEASE.
(A) WAIVER AND RELEASE BY XXXXXXXXX. Xxxxxxxxx hereby waives
any and all claims, charges, complaints, liabilities, obligations,
promises, agreements, contracts, damages, actions, causes of action,
suits, accrued benefits or other liabilities of any kind or character,
whether known or hereafter discovered (the "Claims"), arising in
connection with or otherwise relating to the Employment Agreement, his
relationship with the Company and his termination therefrom or his
resignation as Vice President of Business Development and member of the
Scientific Advisory Board of the Company, that he has or may have
against the Company, and its officers, directors, shareholders, agents
and employees and its successors and assigns, and all other persons,
firms, partnerships, or corporations in control of, under the direction
of, or in any way presently or formerly associated with the Company
(the "Released Parties") of any kind whatsoever, including, but not
limited to, allegations of wrongful termination, breach of contract
(other than in connection with this Termination Agreement), intentional
infliction of emotional distress, negligent infliction of emotional
distress, defamation, invasion of privacy, any action in tort or
contract (including any action under the Company's charter documents),
any claims arising under and/or for any alleged violation of any
federal, state, or local law (including, but not limited to, Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. ss. 2000e et
seq., the Civil Rights Act of 1866, 42 U.S.C. ss. 1981 et seq., the
Equal Pay Act, 29 U.S.C. ss. 206; the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") 29 U.S.C. ss. 1001 et seq.
(non-vested rights), the Americans with Disabilities Act, 42 U.S.C. ss.
12101 et seq., the Age Discrimination Employment Act of 1967, as
amended ("ADEA"), 29 U.S.C. ss. 621 et seq., the Fair Labor Standards
Act, as amended, 29 U.S.C. ss. 201 et seq., the National Labor
Relations Act, 29 U.S.C. xx.xx. 151 et seq., the Family and Medical
Leave Act of 1993, 29 U.S.A. ss. 2601 et seq., the Worker Adjustment
and Retraining Notification Act (WARN), 29 U.S.C., ss. 2101 et seq.,
the Occupational Safety and Health Act, as amended, the Texas
Commission on Human Rights Act, Texas Labor Code ss. 21.001 et seq.,
the Texas Payday Act, Texas Labor Code, ss. 61.01 et seq., the Texas
Workers' Compensation Statute, Texas Labor Code ss. 451.0001 et seq.,
and any other employment or civil rights act) and any and all claims
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for severance pay, bonus payments, stock options or rights to acquire
shares of common stock, of the Company and, except as provided by law,
benefits under any compensation or employee benefit plan, program,
policy, contract, agreement or other arrangement of the Company
(including the Employment Agreement) and does hereby release and
forever discharge all of the Released Parties of and from any and all
debts, claims, demands, damages, actions, causes of action, or
liabilities of any nature whatsoever arising in connection with or
otherwise relating to the Employment Agreement, his relationship with
the Company and his termination therefrom or his resignation as Vice
President of Corporate Development and member of the Scientific
Advisory Board of the Company, that Xxxxxxxxx shall or may have against
any of the Released Parties. Xxxxxxxxx will submit all reimbursable
expenses due to him by the company within 10 days of the effective date
of this agreement.
(B) WAIVER AND RELEASE BY THE COMPANY. The Company, on its own
behalf and on behalf of its successors and assigns, hereby waives any
and all Claims arising in connection with or otherwise relating to the
Employment Agreement, Xxxxxxxxx'x relationship with the Company and his
termination therefrom or his resignation as Vice President of Corporate
Development and member of the Scientific Advisory Board of the Company,
that it has or may have against Xxxxxxxxx and does hereby release and
forever discharge Xxxxxxxxx of and from any and all debts, claims,
demands, damages, actions, causes of action, or liabilities of any
nature whatsoever arising in connection with or otherwise relating to
the Employment Agreement, Xxxxxxxxx'x relationship with the Company and
his termination or his resignation as Vice President of Corporate
Development and member of the Scientific Advisory Board of the Company,
that the Company shall or may have against Xxxxxxxxx; provided,
however, that such waiver and release by the Company shall not apply to
any Claims relating to (i) the Company's enforcement of the Survival
Provisions of the Employment Agreement which provisions hall survive
Xxxxxxxxx'x termination and execution of the Termination Agreement, or
(ii) any intentional or willful misconduct, gross negligence or illegal
activity by Xxxxxxxxx during his employment with the Company.
4. CONFIDENTIALITY. Each party agrees to hold and maintain confidential
and not disclose to any third party the terms and conditions of this Termination
Agreement including, without limitation, the consideration provided for by this
Termination Agreement; provided, however, that the foregoing shall not apply to
any disclosure: (i) that may be required to the extent compelled by legal
process, a government agency or court order or otherwise required by applicable
laws or regulations, (ii) that may be required to enforce either party's rights
hereunder, or (iii) to either party's attorneys, accountants and other
professional advisors to whom disclosure is necessary to accomplish the
professional purposes for which such party has consulted such professional
advisors. Each party understands and agrees that in the event such party
breaches any of the terms of this Section 4, such party shall be liable to the
other party for actual damages suffered by such other party caused by such
breach.
5. COMPANY REPRESENTATIONS AND WARRANTIES. The Company has all
requisite power, authority (corporate and other) and legal right to execute,
deliver, enter into, consummate and perform this Termination Agreement. The
execution, delivery and performance of this Termination Agreement by the Company
have been duly authorized by all required corporate
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and other actions. The Company has duly executed and delivered this Termination
Agreement. This Termination Agreement constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to the rights of creditors generally.
6. EFFECTIVE DATE. INSOFAR AS THIS TERMINATION AGREEMENT RELATES TO THE
WAIVER AND RELEASE OF ANY CLAIMS UNDER ADEA, SUCH WAIVER AND RELEASE WILL BECOME
EFFECTIVE ON THE NEXT BUSINESS DAY FOLLOWING SEVEN (7) DAYS FROM THE EFFECTIVE
DATE. IN ALL OTHER RESPECTS, THE TERMS AND PROVISIONS OF THIS TERMINATION
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL OTHER WAIVERS AND RELEASES OF
XXXXXXXXX CONTAINED HEREIN, ARE EFFECTIVE AS OF THE EFFECTIVE DATE.
7. GOVERNING LAW/VENUE. This Termination Agreement shall be governed by
the laws of the State of Texas and both parties consent to jurisdiction by the
federal or state courts in the State of Texas.
8. PAYMENT OF LEGAL FEES. If any party is required to engage in any
proceedings, legal or otherwise, to defend or enforce its rights under this
Termination Agreement, such party, if successful, shall be entitled to recover
from the other party which is in breach of its duties hereunder, in addition to
any other remedy or sums due, the reasonable attorneys' fees and disbursements
and costs of such proceeding incurred in connection therewith.
9. COUNTERPARTS. This Termination Agreement may be executed in more
than one counterpart, each of which shall be an original, but all of which,
taken together, shall be and remain one instrument.
10. HEADINGS. The headings of the several sections of this Termination
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
11. SEVERABILITY. IF ONE OR MORE OF THE PROVISIONS IN THIS TERMINATION
AGREEMENT ARE DEEMED VOID BY LAW, THEN THE REMAINING PROVISIONS WILL CONTINUE IN
FULL FORCE AND EFFECT.
12. TIME FOR REVIEW; REVOCATION. Xxxxxxxxx understands that insofar as
it relates to the waiver and release of any claims under the ADEA, he has
forty-five (45) days within which to consider this Termination Agreement and
that the portion of this Termination Agreement relating to the waiver and
release of any claims under the ADEA is revocable by him for a period of seven
(7) days following the execution of this Termination Agreement, and if not so
revoked, will become effective and enforceable after such period of seven (7)
days.
13. REVIEW BY XXXXXXXXX AND COUNSEL. Xxxxxxxxx expressly represents and
warrants to the Company that he has (i) completely read this Termination
Agreement prior to executing it; (ii) been free to, and has been advised by
representatives of the Company, including, but not limited to, Xxxxxx &
Xxxxxxxxx, PC, counsel for the Company to, consult with independent legal
counsel of his own choosing regarding his rights and obligations under this
Termination Agreement; (iii) had an opportunity to review the Termination
Agreement with his counsel, if any; and (iv) entered into this Termination
Agreement knowingly and voluntarily.
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IN WITNESS WHEREOF, the parties hereto have caused this Termination
Agreement to be executed as of the day and year set forth above.
PHARMAFRONTIERS CORP.
By: /s/ Xxxxx XxXxxxxxxx
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Xxxxx XxXxxxxxxx
President, PharmaFrontiers Corp.
XXXXXXXXX
/s/ R. Xxxxx Xxxxxxxxx
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R. Xxxxx Xxxxxxxxx
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