EXHIBIT 10(a)
CONSULTING AGREEMENT AND RELEASE OF CLAIMS
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This Consulting Agreement and Release of Claims (this "Consulting
Agreement") is made by and between OXIS International, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx, Ph.D. ("Employee") as of March
6, 1998. The Company and the Employee may be hereinafter collectively referred
to as the "Parties" and each may be individually referred to as a "Party".
WHEREAS, Employee was employed as President and Chief Executive Officer of
the Company and is a member of the Company's Board of Directors;
WHEREAS, the Company and Employee have previously entered into oral
agreements and other arrangements from time to time relating to the Employee's
employment with the Company (such agreements and arrangements are hereinafter
collectively referred to as the "Employment Agreements");
WHEREAS, the Company and Employee each seek to, and have each agreed to,
modify their relationship such that it will become a consulting relationship
where Employee will be providing consulting services to the Company pursuant to
the terms and conditions set forth in this Consulting Agreement;
WHEREAS, the Company and Employee have previously entered into an Employee
Patent and Confidential Information Agreement dated as of June 1, 1994 (the
"Confidentiality Agreement"); and
WHEREAS, in connection with their agreement to modify the nature of their
relationship, the Company and Employee have mutually agreed to terminate any and
all Employment Agreements and to release each other from any claims arising
therefrom or otherwise related to the employment relationship.
NOW THEREFORE, in consideration of the mutual promises made herein, the
Parties agree as follows:
1. Modification of Employment Relationship.
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(a) Termination of Employment Agreements. Except as otherwise
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specified herein, Company and Employee agree that any and all
Employment Agreements are terminated (the "Termination") effective as
of the Effective Date (defined in Section 23). As of the Effective
Date, the Employee shall cease to be an employee or officer of the
Company.
(b) Entry into Consulting Arrangements.
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(i) General. From the Effective Date until the nine month
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anniversary thereof (the "Consultation Period"), Employee shall,
upon reasonable notice, perform services as a consultant to the
Company as reasonably requested by the Company (and as
reasonably acceptable to Employee) and make herself available on
an independent contractor basis as a consultant to the Company
on an as-needed basis and in such capacity consult with the
Company with respect to matters which are reasonably within the
realm of her expertise and training (the "Consulting
Arrangement"), provided that Employee shall not be required to
make herself available more than 15 hours per month. In
connection with her consulting activities under this Consulting
Agreement, the Company will provide Employee with limited office
space and secretarial support. Nothing in this Consulting
Agreement shall in any way be construed to constitute Employee
as an agent, employee or representative of the Company during
the Consultation Period, and Employee shall perform all services
hereunder during the Consultation Period as an independent
contractor. Employee acknowledges and agrees that Employee is
obligated to pay all self employment and other taxes relating to
her compensation paid hereunder during the Consultation Period.
The Company and Employee may extend the Consultation Period by
mutual agreement.
(ii) Restricted Activities. During the Consultation Period,
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Employee agrees that she will not (whether as an employee,
consultant, proprietor, partner, director or otherwise), engage
in or have any ownership interest in, or participate in the
operation, management or control of any person, firm,
corporation or business ("Entity") that competes with the
Company. Employee or Entity shall be deemed to compete with the
Company if she or it is engaged in the research, development,
manufacturing, marketing, distribution and/or selling of
compounds, drugs, pharmaceuticals, nutraceuticals, or
nutritional supplements competitive with products currently
being developed or marketed by the Company. Ownership of 10% or
less of the outstanding stock of an Entity shall not constitute
a violation of this provision. The Company acknowledges that
Employee is free to pursue any activity in the cancer market,
and that such activity shall not be deemed to be competitive
with the Company.
2. Compensation and Benefits.
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(a) Employment Related Compensation. On the Effective Date, the
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Company shall pay the Employee all accrued compensation, including
without limitation, accrued salary and vacation due the Employee
through the Effective Date. Employee shall be eligible for COBRA
health insurance coverage at Employee's expense during the period the
Company is required to make such coverage available. The computer and
the other office equipment which the
Company has provided for Employee's use during the course of her
employment will be transferred to Employee as of the Effective Date.
Employee agrees that the compensation to be paid to her under this
Section 2(a) will constitute all amounts due to her under any and
all Employment Agreements she may have or have had with the Company
through the date hereof.
3. Consulting Related Compensation. So long as Employee has not
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commenced full time employment at another organization, during the
Consultation Period the Company shall pay the Employee the amount of
$15,416.67 per month, payable on the 15th and the last day of each month, or
the preceding business day should such day fall upon a weekend or a nationally
recognized holiday (the "Consulting Compensation"). In the event that Employee
commences full time employment at another organization, the Consulting
Compensation shall be reduced by the monthly amount received as compensation
by Employee from such other organization. Employee shall be deemed to be
engaged in "full time employment" if she provides 25 hours of service per week
to an organization. Cessation of payments under this Section 3 shall terminate
Employee's requirement to provide consulting services hereunder. In the event
Employee shall breach the terms of Section 1(b)(ii) of the this Agreement, or
breaches the Confidentiality Agreement or resigns in her capacity as a
consultant to the Company, the Company's obligation to pay the Employee
pursuant to the terms of this Section 2(b) shall terminate.
4. Stock Options; Vesting; Period for Exercise. The Company affirms the
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options granted to Employee under the Employee's Company Stock Option
Agreements, including, without limitation, to those stock options dated June 16,
1994, June 26, 1995, March 28, 1996, October 11, 1996, and September 4, 1997 and
a Stock Option Agreement dated September 7, 1994 (the "Option Agreements").
Notwithstanding any vesting provisions contained in the Option Agreements, the
Employee shall become fully vested with respect to such options upon the
execution of, and Employee's entry into, this Consulting Agreement. The
Employee shall have the right to exercise the option rights granted under the
Option Agreements for the period beginning on the Effective Date and ending two
years after the end of the Consultation Period. In the event of the death of
Employee, Employee's estate shall have the maximum time available under the
Option Agreements to exercise the options and shall be entitled to effect the
exercise of all or a portion of the options by any permissible means under the
terms of the Option Agreements.
5. Confidential Information. Employee shall continue to maintain the
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confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of Paragraph E of the
Confidentiality Agreement. Employee shall return all Company property and
confidential and proprietary information in her possession to the Company no
later than on the Effective Date of this Consulting Agreement.
6. Non-Solicitation of Employees. Employee agrees that for a period of
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nine (9) months from the end of the Effective Date, Employee shall neither
directly nor indirectly solicit, induce, recruit or encourage any of the
employees of the Company to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage or take away
employees of the Company other than Xxxxx Xxxxxx, either for the Employee or
for any other
person or entity.
7. Mutual Release of Claims. Employee and Company agree that this
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Consulting Agreement and the Option Agreements, which consideration and
agreements have induced each Party to enter into this agreement with the other
Party, represents settlement in full of all outstanding obligations owed to
Employee by the Company and by the Employee to the Company existing on the
date hereof. 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:
(a) relating to or arising from Employee's employment relationship
with the Company, or except as noted below, status as an officer or
director of the Company and the termination of that relationship or
status;
(b) 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 and/or securities
law, and securities fraud under any state or federal law;
(c) relating to claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of
contract, both express and implied; breach of a covenant of good faith
and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; negligent or
intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices;
defamation; libel; slander; negligence; personal injury; assault;
battery; invasion of privacy; false imprisonment; and conversion;
(d) relating to claims for violation of any federal, 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 Employee Retirement Income Security Act of
1974, the Worker Adjustment and Retraining Notification Act, and the
Older Workers Benefit Protection Act;
(e) relating to claims of violation of the federal, or any state,
constitution;
(f) relating to claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(g) relating to claims for attorneys' fees and costs.
In addition to the foregoing, the Company and the Employee fully and
forever release each other from, and agree not to xxx concerning, any other
claim, duty, obligation or cause of action relating to any other matter 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 (except as provided below). 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 or arising
out of this Consulting Agreement provided however this release shall not affect
Employee's rights to indemnification by the Company or under a policy of
insurance for claims made against the Employee arising from her having been an
officer, director or employee of the Company.
8. Acknowledgment of Waiver of Claims under ADEA and the Older Workers'
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Benefit Protection Act. Employee acknowledges that she is waiving and releasing
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any rights she may have under the Age Discrimination in Employment Act of 1967
("ADEA") or the Older Workers' Benefit Protection Act (collectively with the
ADEA and any other applicable age discrimination statutes, the "Age
Discrimination Statutes") 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 the Age Discrimination
Statutes after the Effective Date. Employee acknowledges that the consideration
given for this waiver and release contained in this Consulting Agreement is in
addition to anything of value to which Employee was already entitled. Employee
further acknowledges that she has been advised by this writing that: (a) she
should consult with an attorney prior to executing this Consulting Agreement;
(b) she has had at least twenty one (21) days within which to consider this
Consulting Agreement; (c) she has seven (7) days following the execution of this
Consulting Agreement by the Parties to revoke the Agreement; and (d) this
Consulting Agreement shall not be effective until the revocation period has
expired.
9. No Pending or Future Lawsuits. Employee represents that she has no
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lawsuits, claims, or actions pending in her name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that she does not intend to bring any claims
on her own behalf or on behalf of any other person or entity against the Company
or any other person or entity referred to herein.
10. Public Disclosure of Consulting Agreement. Company and Employee agree
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that, prior to publication or dissemination and subject to the Company's
obligations under federal and state securities laws, they shall discuss and
agree upon any public disclosures relating to the modification of Employee's
employment relationship with the Company and this Consulting Agreement.
11. Non-Disparagement. Each Party agrees to refrain from any defamation,
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libel or
slander of the other, or tortious interference with the contracts and
relationships of the other.
12. Tax Consequences. The Company makes no representations or warranties
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with respect to the tax consequences of the payment of any sums to Employee
under the terms of this Consulting Agreement. Employee agrees and understands
that she is responsible for payment, if any, of local, state and/or federal
taxes on the sums paid hereunder by the Company and any penalties or
assessments thereon. Employee further agrees to indemnify and hold the Company
harmless from any claims, demands, deficiencies, penalties, assessments,
executions, judgments, or recoveries by any government agency against the
Company for any amounts claimed due on account of Employee's failure to pay
federal or state taxes or damages sustained by the Company by reason of any
such claims, including reasonable attorneys' fees.
13. No Admission of Liability. The Parties understand and acknowledge that
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this Consulting Agreement constitutes a compromise and settlement of claims. No
action taken by the Parties hereto or either of them, either previously or in
connection with this Consulting Agreement shall be deemed or construed to be an
acknowledgment or admission by either Party of any fault or liability whatsoever
to the other Party or to any third party.
14. Insurance. So long as Employee shall remain a member of the Board of
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Directors of the Company, she shall be covered by the Company's Director's and
Officer's Liability Insurance if any is then in effect.
15. Costs. The Parties shall each bear their own costs, expert fees,
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attorneys' fees and other fees incurred in connection with this Consulting
Agreement.
16. Arbitration. The Parties agree that any and all disputes arising out
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of the terms of this Consulting Agreement, their interpretation, and any of the
matters herein released, shall be subject to binding arbitration under the rules
of the American Arbitration Association, with any such arbitration to be held in
Portland, Oregon. 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 and to costs and attorneys' fees
incurred in enforcing the Agreement.
17. Authority. The Company represents and warrants that the undersigned
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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 Consulting
Agreement. Employee represents and warrants that she has the capacity to act
on her own behalf and on behalf of all who might claim through her to bind
them to the terms and conditions of this Consulting 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.
18. No Representations. Each Party represents that it has had the
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opportunity to consult with an attorney, and has carefully read and
understands the scope and effect of the provisions of this Consulting
Agreement. Neither Party has relied upon any representations or statements
made by the other Party hereto which are not specifically set forth in this
Agreement.
19. Severability. In the event that any provision hereof becomes or is
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declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this
Consulting Agreement shall continue in full force and effect without said
provision.
20. Entire Agreement. This Agreement and the Confidentiality Agreement
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represent 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 oral and written agreements and understandings
concerning Employee's relationship with the Company and her compensation by the
Company, including any and all Employment Agreements.
21. No Oral Modification. This Agreement may only be amended in writing
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signed by Employee and the Company.
22. Governing Law. This Agreement shall be governed by the laws of the
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State of Oregon.
23. Effectiveness. This Agreement will become effective (the "Effective
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Date") seven (7) days after the Agreement is executed by both Parties.
24. Counterparts. This Agreement may be executed in counterparts, and each
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counterpart 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.
25. Voluntary Execution of Agreement. This Agreement is executed
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voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing claims. The Parties
acknowledge that:
(a) They have read this Consulting Agreement;
(b) They have been represented in the preparation, negotiation, and
execution of this Consulting 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 Consulting
Agreement and of the releases it contains; and
(d) They are fully aware of the legal and binding effect of this
Consulting Agreement.
IN WITNESS WHEREOF, the Parties have executed this Consulting Agreement on
the respective dates set forth herein.
OXIS INTERNATIONAL, INC.
Dated: March 6, 1998
By: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: Chairman of the Board
Dated: March 9, 1998 Xxxx X. Xxxxxx, Ph.D., an individual
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
