SETTLEMENT AGREEMENT
THIS AGREEMENT is by and
between Protalex, Inc. (“Protalex” or “Employer”) and Xxxxxx Xxxx
(“Xxxx”). Both parties desire to fully resolve all issues arising out
of Xxxx’x employment and separation of employment with Protalex, and intending
to be legally bound and in consideration of the mutual promises contained
herein, the parties agree as follows:
1. Employment
Status. Effective April 15, 2009, Xxxx agrees that
he has voluntarily resigned and terminated his employment with
Protalex. Notwithstanding the foregoing, Xxxx shall continue to
serve as the Chief Executive Officer for Protalex at the pleasure of
the Board of Directors without any further compensation. Nothing herein shall
affect Xx. Xxxx’x position as a Director of the Company. .
2. Severance
Payment. Commencing April 30, 2009, Protalex agrees to pay
Xxxx thirty-six (36) equal installments of severance pay totaling Six
Hundred Thousand Dollars ($600,000) (“Severance Payment”) in arrears, less all
applicable payroll and other tax withholdings, in accordance with the Company’s
standard payroll practices. The Severance Payment will be made
in thirty-six (36) equal installments of Sixteen Thousand Six Hundred
Sixty-Six Dollars and Sixty Six Cents ($16,666.66) together with a sum equal to
the existing premiums paid by the Company for Xxxx’x health and
dental coverage, less all applicable payroll and other tax withholdings, and
shall be paid in the same manner that Xxxx received his regular salary in
accordance with the Company’s standard payroll practices.
3. Consideration. Xxxx
acknowledges that the sums and/or benefits in this Agreement are good and
valuable consideration to which Xxxx would not otherwise be entitled
if he were to voluntarily terminate his employment with the
Company.]. Xxxx acknowledges that Xxxx is owed no additional payments
or benefits from Protalex, other than those specifically identified in this
agreement, whether such payments are classified as salary, benefits, severance
or some other type of compensation.
4. General
Release. In consideration for the benefits set forth in this
Agreement, Xxxx releases and discharges Protalex, Inc., and its parents,
subsidiaries, successors, operating units, assigns, affiliates, related
corporations and entities, and all of their employees, supervisors, officers,
directors, and agents, officials, insurers, attorneys and any person or entity
which can be held jointly and severably liable with any of them, (collectively
the “Released Parties”) from any and all claims, liabilities, demands, and
causes of action, known or unknown, fixed or contingent, which Xxxx may have or
claim to have against the Released Parties including, without limitation, claims
arising out of or in any way connected to Xxxx’x employment or separation from
employment with Protalex or the other Released Parties. By this
Agreement, Xxxx knowingly and voluntarily waives any and all claims under any
and all laws which provide legal restrictions on Protalex’s or the other
Released Parties’ right to terminate Xxxx’x employment or to affect the terms
and conditions of Xxxx’x employment, including but not limited to claims under
any federal, state, or other governmental statute, regulation or ordinance,
including, without limitation: (1) Title VII of the Civil Rights Act of 1964 and
the Civil Rights Act of 1991; (2) the Americans With Disabilities Act (“ADA”);
(3) the Pennsylvania Human Relations Act (“PHRA”); (4) the Age Discrimination in
Employment Act (“ADEA”); (5) the Older Workers Benefit Protection Act (“OWBPA”);
(6) the Family and Medical Leave Act (“FMLA”); (7) Sections 1981 through 1988 of
Title 42 of the United States Code; (8) the Employee Retirement Income Security
Act of 1974 (“ERISA”); (9) the Fair Labor Standards Act (“FLSA”); (10) the
employment agreement, including any amendments thereto, between Protalex and
Xxxx; and (11) all other federal, state or local laws of a similar nature to any
of the foregoing enumerated laws and any amendments to the foregoing
statutes. Xxxx also waives any common law claims against the Released
Parties, including but not limited to, any claim for personal injury, wrongful
or constructive discharge, public policy, negligence, infliction of emotional
distress, whistleblower, retaliation, defamation, libel, slander, negligent
hiring or retention, or any form of tort, whether negligent, reckless or
intentional. Xxxx hereby waives any claims for attorney’s fees or
costs.
5. Exclusions. Xxxx
is not waiving any rights or claims which cannot legally be waived by this
Agreement, including without limitation, unemployment compensation claims,
workers’ compensation claims or the ability to file certain administrative
claims. Subject to the foregoing, this Agreement shall operate as a
general release of any and all claims to the fullest extent of applicable
law.
6. Waiver of
Administrative Recoveries. With the exception of unemployment
and workers’ compensation claims, Xxxx waives any right to any individual
monetary or economic recovery or equitable relief against the Released Parties
in any administrative proceeding or in any action, lawsuit, hearing or other
proceeding instituted by any federal, state or local agency, person or
entity.
7. Covenants
Regarding Work-Related Injuries. Xxxx covenants that he does not suffer
from or have knowledge of any work-related injury or illness suffered during or
exacerbated by any employment with Protalex or the other Released Parties and
that Xxxx has an earning capacity that is not limited by any work-related injury
or illness.
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8. Cooperation/Option
Vesting. Xxxx has agreed to cooperate with and assist Protalex
until he otherwise notifies the Company’s Chairman, Xxxx Xxxx, in writing that
he is both ceasing such assistance and resigning as the Company’s CEO, to
achieve and to participate in the following for Protalex: (1) oversight of the
clinical trials in Australia; (2) assist with Securities and Exchange Commission
filings; (3) facilitate accounts payable; (4) work with
Protalex’s accountants on tax issues and (5) otherwise cooperate with the
reasonable requests of Protalex’s Chairman to provide information and assistance
to Protalex related to the performance of his former duties. In
partial consideration of the compensation paid to Xx. Xxxx hereunder and the
other provisions set forth in this Agreement, Xxxx agrees that, not
withstanding his entitlement to the immediate vesting of all unvested stock
options currently held by Xxxx, all such stock options shall not immediately
vest but shall vest in accordance with their current vesting schedules until
such time that Xxxx or Xx. Xxxx inform the other in writing that Xxxx shall no
longer provide the Company with assistance as contemplated in this Section
8. At such time, all further vesting of Xxxx’x stock options shall
cease.
9. Non-Compete/Non-Solicitation. For
the two-year period from April 15, 2009, through April 15, 2011, Xxxx will not
directly or indirectly solicit, induce, persuade or entice, or attempt to do so
or otherwise cause or permit third parties or entities to do so on Xxxx’x
behalf, any employee or independent contractor of Protalex to terminate his or
her employment or contracting relationship with Protalex to become an employee
or independent contractor to or for any other person or
entity. Violation of this paragraph will result in the forfeiture of
any remaining severance payments due, in addition to any other damages or
equitable relief which Protalex may seek.
10. INTENTIONALLY
LEFT BLANK.
11. Mutual
Covenant Not to Engage in Disparaging or Defamatory
Conduct. Protalex and the released Parties and Xxxx mutually
covenant and agree not to disparage, defame or otherwise engage in conduct,
which, in any way, reflects adversely upon Xxxx, Protalex and/or the Released
Parties.
12. INTENTIONALLY
LEFT BLANK
13. Non-Admission
of Liability. It is expressly
understood that by making this Agreement, Protalex and the other Released
Parties do not directly or indirectly or by implication admit any violation of
any law, statute, regulation, or ordinance, nor shall this Agreement or any of
its terms be admissible in any proceeding against the Released Parties other
than for breach of the terms of this Agreement.
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14. Governing
Law. This Agreement shall be performed, interpreted and
enforced according to the laws of the Commonwealth of Pennsylvania without
regard to any choice of law provisions thereof.
15. Review
Period & Consultation with Legal Counsel Time. Xxxx hereby
acknowledges that he has been given at least twenty-one (21) days within which
to consider this Settlement Agreement and Release and that Xxxx has been advised
through this document that Xxxx should consult with an attorney prior to
executing it. By signing this Agreement prior to the expiration of
the twenty-one (21) day review period, Xxxx will waive the remaining portion of
time in the review period.
16. Revocation
Date and Effective Date. Xxxx acknowledges that he may revoke
his consent to this Separation Agreement and General Release at any time prior
to the close of business on the Seventh (7th) day
following the day on which Xxxx executes this Agreement. If the
Seventh (7th) day
falls on a Saturday, Sunday or Legal Holiday in Pennsylvania, then any
revocation need not be delivered until the next following day which is not a
Saturday, Sunday, or legal holiday (the "Revocation Date"). Any
revocation within this period must be submitted, in writing to Xxxxx X.
Xxxxxxxx, Esquire, c/o Xxxx Xxxxx LLP, 2500 One Liberty Place, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000. Any revocation must state that "I
hereby revoke my acceptance of our Separation Agreement and General
Release." The revocation must be personally delivered to and timely
received by Xx. Xxxxxxxx, prior to the close of
business on the Revocation Date. Once the revocation is received,
Xxxx acknowledges that he will not receive any benefits under this Agreement,
including any payments due under Paragraph 1. This Separation
Agreement and General Release shall not become effective or enforceable until
the day following the Revocation Date (hereinafter the "Effective
Date").
17. Entire
Agreement. This Agreement sets forth the terms of the entire
agreement between the parties. No oral statement of any person
whatsoever shall in any manner or degree modify or otherwise affect the terms
and provisions of this Agreement. To the extent the terms of this
Agreement and any other agreement conflict, the terms of this Agreement shall
govern and supersede such other inconsistent terms.
18. Terms
Negotiated. Xxxx agrees that this Agreement shall not be
construed as drafted solely by Protalex or the other Released
Parties. Rather, this Agreement shall be construed as mutually agreed
upon terms which were the product of good faith and arms length negotiations
between equal parties. Xxxx agrees that this Agreement is not
unconscionable, unfair, the product of unfair bargaining power or a contract of
adhesion.
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19. Effective
Date of Agreement. The Agreement shall become effective and
enforceable immediately upon execution by both parties.
20. Severability. This
Agreement and each of its parts shall be severable and, if any provision is
determined to be void, invalid or unenforceable, the remainder of this Agreement
shall be fully enforced without such term(s).
21. Headings. Headings
in this Agreement are for convenience only and shall have no legal
effect.
22. Full
Understanding. Xxxx agrees that the terms of this Agreement
are clear, are written in language which he understands and that he has a full
understanding of the terms and significance of this Agreement.
[ * THIS SPACE LEFT BLANK
INTENTIONALLY * ]
[SIGNATURE
PAGE FOLLOWING]
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23. Counterparts. This
Agreement may be executed in counterparts, by copy and by facsimile, each of
which shall be legally enforceable as an original document and together which
shall collectively constitute an entire agreement.
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On
Behalf of Protalex
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By:
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Name:
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Title:
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Date:
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Xxxxxx
Xxxx
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Date:
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