SEPARATION AND RELEASE AGREEMENT
Exhibit
10.16
THIS
SEPARATION AND RELEASE AGREEMENT (this “Agreement”)
is
entered into by and among XXXXXX XXXXXXXXX (the “Executive”),
with
an address at 000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx 00000; and VIOQUEST
PHARMACEUTICALS, INC. (the “Employer”),
with
its principal executive offices located at 000 Xx. Xxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxx Xxxxxx 00000, and together with its parents, divisions, affiliates,
and subsidiaries and their respective officers, directors, employees,
shareholders, members, partners, plan administrators, attorneys, and agents,
as
well as any predecessors, future successors or assigns or estates of any of
the
foregoing (collectively referred to herein as the “Company”).
RECITALS
A. The
Executive is employed by the Employer pursuant to an Employment Agreement dated
February 1, 2005 (the “Employment
Agreement”),
serving as the Employer’s President and Chief Executive Officer;
B. The
Executive wishes to resign from his employment with Employer, and Employer
wishes to accept Executive’s resignation, such that Executive’s employment will
be terminated effective the close of business November 9, 2007 (the
“Separation
Date”);
and
C. The
Executive and the Employer (collectively referred to herein as the “Parties”)
believe it to be in their respective best interests to enter into this Agreement
to set forth the terms of their respective rights and obligations relating
to
the Executive’s separation from the Employer.
AGREEMENT
1. Separation
of Employment.
Except
as otherwise provided herein, the Parties agree that the Employment Agreement,
and Executive’s employment by the Company, shall be terminated as of the
Separation Date. Executive further acknowledges and understands that Executive’s
last day of employment with Employer was the Separation Date and that Executive
has received all compensation and benefits to which Executive is entitled under
the Employment Agreement or otherwise as a result of Executive’s employment with
Employer, except as otherwise provided in this Agreement. Employer agrees to
pay
Executive his base salary through November 15, 2007. Effective as of the
Separation Date, the Executive shall be deemed to have resigned from all
positions that the Executive held (a) as an officer and/or director of the
Employer, (b) as a member of any other governing body of the Employer, and/or
(c) as a member of any committee of the Employer or its boards of directors
or
other governing bodies; provided, however, the Executive agrees to take all
actions that are deemed reasonably necessary by the Company to effectuate or
evidence such resignations. Executive understands that, except as otherwise
provided in this Agreement, Executive is entitled to nothing further from
Company (whether arising under the Employment Agreement or otherwise), including
reinstatement by Employer.
2. Executive
Release of Company.
In
consideration of the payments, compensation, and other benefits set forth below
in Section 4(A) through 4(F) and the release set forth in Section 6, Executive
hereby releases, waives, discharges and gives up any and all Claims (as defined
below) that Executive may have against Company, arising on or prior to
Executive’s execution and delivery of this Agreement to Employer. “Claims”
means
any and all actions, charges, controversies, demands, causes of action, suits,
rights, and/or claims whatsoever for debts, sums of money, wages, salary,
severance pay, commissions, bonuses, incentive compensation, unvested stock
options, restricted stock awards, vacation pay, sick pay, expense reimbursement,
fees and costs, attorneys fees, losses, penalties, damages, including damages
for pain and suffering and emotional harm, arising, directly or indirectly,
out
of any promise, agreement (including, without limitation, the Employment
Agreement), offer letter, contract, understanding, common law, tort, the laws,
statutes, and/or regulations of the State of New Jersey, the State of Delaware,
or any other state and the United States, including, but not limited to, federal
and state wage and hour laws, federal and state whistleblower laws, Title VII
of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act,
the Americans with Disabilities Act, the Family and Medical Leave Act, the
Employment Retirement Income Security Act (excluding COBRA), the Vietnam Era
Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Fair
Labor Standards Act, the Age Discrimination in Employment Act, OSHA, the
Xxxxxxxx-Xxxxx Act of 2002, the New Jersey Law Against Discrimination, the
New
Jersey Family Leave Act, the New Jersey Conscientious Employee Protection Act,
the New Jersey Civil Rights Act, the Delaware Discrimination in Employment
Act,
the Delaware Handicapped Persons Employment Protection Act, as each may be
amended from time to time, whether arising directly or indirectly from any
act
or omission, whether intentional or unintentional. This releases all Claims
including those of which Executive is not aware and those not mentioned in
this
Agreement. Executive specifically releases any and all Claims arising out the
Employment Agreement, Executive’s employment with Employer, and/or the
separation thereof or therefrom. Executive expressly forfeits and waives his
right to any stock options that have not vested as of the Separation Date,
details of which are provided on the attached Schedule
A.
Nothing
in this Agreement shall preclude Executive from: (A) participating in any manner
in an investigation, hearing or proceeding conducted by the Equal Employment
Opportunity Commission, but Executive hereby waives any and all rights to
recover under, or by virtue of, any such investigation, hearing or proceeding;
(B) exercising Executive’s rights, if any, under Section 601-608 of the Employee
Retirement Income Security Act of 1974, as amended, popularly known as COBRA
and/or the New Jersey Small Employer Health Benefits Act of 1992 (“NJSEHBA”);
(C)
exercising any stock options that have vested as of the Separation Date within
12 months of the Separation Date; or (D) exercising Executive’s rights under
this Agreement.
3. Representations;
Covenants.
Executive hereby represents and warrants to Company that: (A) Executive has
not
filed, caused or permitted to be filed any pending proceeding (nor has Executive
lodged a complaint with any governmental or quasi-governmental authority)
against Company, nor has Executive agreed to do any of the foregoing; (B)
Executive has not assigned, transferred, sold, encumbered, pledged,
hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed
to
any third party any right or Claim against Company that has been released in
this Agreement; (C) Executive has not directly or indirectly assisted any third
party in filing, causing or assisting to be filed, any Claim against Company,
and (D) Executive is unaware of any potential Claims that any third party may
have against Company which Executive has not previously disclosed to Company.
In
addition, Executive shall not encourage or solicit or voluntarily assist or
participate in any way in the filing, reporting or prosecution by itself or
any
third party of a proceeding or Claim against Company based upon or relating
to
any Claim released by Executive in this Agreement.
4. Consideration.
In
consideration of Executive’s
execution, delivery and non-revocation of this Agreement:
(A) Commencing
six months and one day after the Separation Date, Employer shall provide
Executive his base salary at a rate of $360,000 (if annualized) for a period
of
six (6) months, less applicable withholdings and other customary payroll
deductions, and in accordance with Employer’s normal payroll
practices;
(B) A
lump
sum payment of $70,000 (less applicable withholdings and other customary payroll
deductions), payable no later than March 31, 2008, at the same time that other
executives of Employer receive their respective bonuses;
(C) Provided
Executive elects coverage under NJSEHBA, Employer shall reimburse Executive
the
premiums that Executive incurs from the Separation Date through the twelve
(12)
month anniversary of the Separation Date, unless Executive obtains health
insurance from a new employer or any other source, in which case Executive
shall
be obligated to obtain such coverage from the alternate source and Employer
shall discontinue reimbursing Executive for such premiums;
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(D) Include
in a press release, anticipated to be released on or about November 13, 2007
the
language contained in Schedule
B;
(E) Employer
agrees to forgo and/or waive its right to enforce the non-competition provisions
contained in Section 7(a)(ii) and (iv) of the Employment Agreement with respect
to Executive’s ability to accept future employment opportunities. Except as
expressly waived, the parties acknowledge and agree that all of the other
provisions of Section 7 of the Employment Agreement remain in full force and
effect; and
(F) Employer
agrees to make a letter of reference available to Executive in the form provided
on Schedule
C.
Executive
acknowledges, understands, and agrees that Executive
is not
otherwise entitled to receive all of the payments, compensation, and other
benefits set forth above in Section 4(A) through 4(F), and further acknowledges,
understands, and agrees that nothing in this Agreement shall be deemed to be
an
admission of liability on the part of Company. Executive
agrees
that Executive
will not
seek any further payments, benefits, or other consideration or relief from
Company.
5. Taxes,
Indemnification.
Executive acknowledges, understands, and agrees that he shall be solely
responsible for complying, and expressly agrees to comply, with all federal,
state, local or other laws applicable to Executive and/or Company concerning
the
reporting of income, payment of taxes, and otherwise, with respect to the
payments and other compensation set forth above in Section 4. Executive agrees
to indemnify Company for any liability for taxes, interest or penalties assessed
by any government or governmental revenue agency against Company as a result
of
Executive’s failure to pay taxes that may be due and owing on the payments and
other compensation set forth above in Section 4.
6. Employer
Release of Executive.
Employer
hereby releases, waives, discharges and gives up any and all claims and rights
which it may have against Executive arising out of Executive’s employment with
Employer or separation therefrom or the circumstances related thereto or by
reason of any other matter, cause or thing whatsoever from the date of
Executive’s employment through the date of this Agreement. Notwithstanding the
foregoing, nothing herein shall be deemed to release Executive from any of
Executive’s acts or omissions involving or arising from fraud, theft, criminal
acts, or violations of securities law while employed by Employer or from any
and
all actions and claims by Company for contribution and/or indemnification of
any
action or claim brought by any third party person arising out of Executive’s
acts or omissions involving or arising from acts of fraud, theft, criminal
acts,
or violations of securities law while employed by Employer.
7. Cooperation
With Investigations/Litigation.
Executive agrees, upon Company’s request, to reasonably cooperate in any Company
investigations, inquiries, and/or litigation regarding events that occurred
during Executive’s tenure with Employer. Employer will compensate Executive for
reasonable expenses that Executive incurs in extending such cooperation to
Company, so long as Executive provides advance written notice of Executive’s
request for compensation.
8. Non-Disparagement;
Restrictions on the Executive.
Executive agrees not to make any defamatory or derogatory statements concerning
Company or its products. Company agrees to instruct VioQuest's current
directors and officers not to make any defamatory or derogatory statements
concerning Executive. Executive
acknowledges, understands, and agrees that Company’s rights and Executive’s
obligations under Section 6 (“Confidential
Information and Inventions”)
and
all provisions within Section 7 of the Employment Agreement (“Non-Competition,
Non-Solicitation and Non-Disparagement”)
shall
survive the termination of the Employment Agreement, except as otherwise
provided in Section 4(E) hereof.
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8. Remedies.
If
Executive
breaches
any term or condition of this Agreement, it shall constitute a material breach
of this Agreement and in addition to and not instead of Company’s other remedies
hereunder or otherwise at law or in equity, Executive
shall be
required to immediately, upon written notice from Company, return all payments
and benefits paid by Employer pursuant to Sections 4, less 10% of the payments
paid by Employer thereunder. Executive
agrees
that if Executive
is
required to return these payments, this Agreement shall continue to be binding
on Executive,
and
Company shall be entitled to enforce the provisions of this Agreement as if
such
payments had not been repaid by Executive and Employer shall have no further
payment obligations to Executive
pursuant
to Section 4 hereof.
9. Surrender
of Company Property.
Executive
agrees
that he will surrender to Employer, no later than the Separation Date, all
property belonging to, or purchased with the funds of, Company, and any
equipment (including computers and cell phones), employee or security
identification or access codes, pass codes, keys, credit cards, swipe cards,
client data bases, computer files, Company proposals, computer access codes,
documents, memoranda, records, files, letters, specification or other papers
(including all copies and other tangible forms of the foregoing) acquired by
Executive by reason of his employment with Employer and in Executive’s
possession or under his custody or control relating to the operations, business
or affairs of Company or its customers. Executive agrees that Executive will
not
retain any copies, duplicates, reproductions, computer disks, or excerpts
thereof of Company documents.
10. Who
is
Bound.
Employer
and
Executive
are
bound by this Agreement. Anyone who succeeds to Executive’s
rights
and responsibilities, such as the executors of Executive’s
estate, is bound and anyone who succeeds to Employer’
rights
and responsibilities, such as their respective successors and assigns, is also
bound.
11. Construction
of Agreement.
In the
event that one or more of the provisions contained in this Agreement shall
for
any reason be held unenforceable in any respect under the law of any state
of
the United States, such unenforceability shall not affect any other provision
of
this hereof or thereof, but this Agreement shall then be construed as if such
unenforceable provision or provisions had never been contained herein or
therein. If it is ever held that any restriction hereunder is too broad to
permit enforcement of such restriction to its fullest extent, such restriction
shall be enforced to the maximum extent permitted by applicable law. This
Agreement
shall be
governed by, and construed and interpreted in accordance with, the laws of
the
State of New Jersey, without giving effect to its principles of conflicts of
laws. Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than a breach involving Company’s
rights and/or Executive’s obligations under Section 6 (“Confidential
Information and Inventions”)
and/or
Section 7 (“Non-Competition,
Non-Solicitation and Non-Disparagement”)
of the
Employment Agreement),
or
regarding the interpretation thereof, shall be finally settled by arbitration
conducted in Newark, New Jersey in accordance with the rules of the American
Arbitration Association then in effect before a single arbitrator appointed
in
accordance with such rules. Judgment upon any award rendered therein may be
entered and enforcement obtained thereon in any court having jurisdiction.
The
arbitrator shall have authority to grant any form of appropriate relief, whether
legal or equitable in nature, including specific performance. For the purpose
of
any judicial proceeding to enforce such award or incidental to such arbitration
or to compel arbitration and for purposes of Company’s
rights and/or Executive’s obligations under Section 6 (“Confidential
Information and Inventions”)
and/or
Section 7 (“Non-Competition,
Non-Solicitation and Non-Disparagement”)
of the
Employment Agreement),
the
Parties hereby submit to the exclusive jurisdiction of the Superior Court of
the
State of Jersey, or the appropriate federal court in the State of New Jersey.
The costs of such arbitration shall be borne proportionate to the finding of
fault as determined by the arbitrator. Judgment on the arbitration award may
be
entered by any court of competent jurisdiction.
12. Opportunity
For Review.
Executive represents and warrants that Executive: (i) has had sufficient
opportunity to consider this Agreement; (ii) has read this Agreement, (iii)
understands all the terms and conditions hereof, (iv) is not incompetent or
had
a guardian, conservator or trustee appointed for Executive, (v) has entered
into
this Agreement of Executive’s own free will and volition, (vi) has duly executed
and delivered this Agreement, (vii) understands that Executive is responsible
for Executive’s own attorney’s fees and costs, (viii) has had the opportunity to
review this Agreement with counsel, (ix) understands that if Executive does
not
sign and return this Agreement to Employer
(Attn:
Chairman of the Board of Directors) within the time frame provided, Employer
shall
have no obligation to enter into this Agreement, Executive shall not be entitled
to the payments, compensation, or other benefits set forth in Section 4(A)
through 4(F) of this Agreement, and the Separation Date shall be unaltered,
and
(x) this Agreement is valid, binding and enforceable against the Parties in
accordance with its terms.
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Agreed
to
and accepted by, on this 12th day of November, 2007
EXECUTIVE:
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Agreed
to
and accepted by, on this 14th day of November, 2007
| EMPLOYER: | ||
| VIOQUEST PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxx | |
|
Name: Xxxxx Xxxx |
||
| Title: Chief Financial Officer | ||
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Schedule
A
|
|
Total
Stock
|
Vested
Stock Options
|
Vested
Stock Options
|
Unvested
& Forfeited Options
|
|
Total
|
||||||||||||||||
|
Grant
Date
|
Options
Granted
|
2/1/06
Vesting Date
|
2/1/07
Vesting
Date
|
2/1/08
Vesting
Date
|
Total
Vested
|
Unvested
& Forfeited
|
Exercise
Price
|
|||||||||||||||
|
2/1/2005
|
891,396
|
297,132
|
297,132
|
297,132
|
594,264
|
297,132
|
0.88
|
|||||||||||||||
|
10/18/2005
|
1,445,080
|
481,693
|
481,693
|
481,693
|
963,386
|
481,693
|
0.89
|
|||||||||||||||
|
10/18/2006
|
394,580
|
-
|
197,290
|
197,290
|
197,290
|
197,290
|
0.56
|
|||||||||||||||
|
Total
|
2,731,056
|
778,825
|
976,115
|
976,115
|
1,754,940
|
976,115
|
||||||||||||||||
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Schedule
B
Xxxxxx
Xxxxxxxxx Departs VioQuest After Job Well Done
"We
would
like to thank Xxxxxx Xxxxxxxxx for his service to the Company over the last
three years. Xxx successfully guided us through our difficult transition from
a
chemistry company to a biopharmaceutical company with three promising product
candidates in human clinical trials," said Xxxxxxx Xxxxxxxxx,
chairman.
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Schedule
C
November
14, 2007
To
Whom
It May Concern:
Xxx
Xxxxxxxxx served as our President and Chief Executive Officer for approximately
three years.
During
his tenure, Xx. Xxxxxxxxx was assigned the difficult task of turning a chemistry
services company, with 45 employees and manufacturing facilities in both the
United States and China, into a valuable targeted oncology drug development
company. Under Xx. Xxxxxxxxx’x leadership, we accomplished this goal through the
successful completion of several transactions. First, we completed a merger
with
Greenwich Therapeutics, a transaction that brought us two pre-clinical oncology
products. Next, Xxx successfully recruited an experienced, multidisciplinary
oncology drug development team that initiated several human clinical trials
with
these compounds - the same compounds that we are currently advancing through
the
FDA approval process. It is also during Xx. Xxxxxxxxx’x tenure that we were able
to secure our third product candidate in early 2007.
Additionally,
it is under Dan’s leadership that we were able to form relationships with the
United States Army and GSK that lead to our first Orphan Drug designation and
may enable us to file our first NDA with the FDA. To finance our operations
during this difficult time, Xx. Xxxxxxxxx was instrumental in securing
approximately $16M in private financing and approximately $1M in State funding.
Finally, it was under Xx. Xxxxxxxxx’x leadership that we were able to sell our
chemistry services business for total consideration of approximately $3M, thus
completing our difficult transformation.
Xx.
Xxxxxxxxx is a recognized leader in the State of New Jersey’s biopharmaceutical
community serving on two of the State’s two most influential Boards - BIO NJ and
Health Industries of New Jersey. A dedicated family man, he has also earned
the
respect and admiration of many of his employees, colleagues and peers. He has
developed many close relationships on Wall Street and was instrumental in
securing our first research analyst coverage.
It
is our
pleasure to recommend to you Xx. Xxxxxxxxx. On behalf of the Board of Directors,
I am,
Sincerely
yours,
Xxxxxxx
Xxxxxxxxx
Chairman
of the Board
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