CONFIDENTIAL SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS
Exhibit 10.17
CONFIDENTIAL SEPARATION AGREEMENT
AND MUTUAL GENERAL RELEASE OF ALL CLAIMS
AND MUTUAL GENERAL RELEASE OF ALL CLAIMS
This Confidential Separation Agreement and Mutual General Release of All Claims (“Separation
Agreement”) is made by and between ImaRx Therapeutics, Inc. (“ImaRx”) and Xxxx X. Xxxxx, MD
(“Executive”) with respect to the following facts:
A. Executive was employed by ImaRx as the President and Chief Executive Officer (“CEO”)
pursuant to a Second Amended Executive Employment Agreement dated May 15, 2006 (“Employment
Agreement”).
B. Executive’s employment ceased effective October 19, 2006 (“Separation Date”). Executive’s
continues to hold a director position on ImaRx’s Board of Directors. Executive has been paid all
wages due as of the Separation Date.
C. A dispute has arisen regarding whether Executive has earned any accrued, unused paid time
off (“PTO Dispute”). ImaRx maintains that Executive, as President and CEO, took vacation and sick
leave at his discretion during his employment and did not accrue any PTO. Accordingly, ImaRx
denies that Executive is owed any accrued, unused PTO as of the Separation Date. Executive is
willing to resolve the PTO Dispute on the terms set forth in this agreement.
D. The parties desire to settle all claims and issues that have, or could have been raised, in
relation to Executive’s employment with ImaRx and arising out of or in any way related to the acts,
transactions or occurrences between Executive and ImaRx to date, including, but not limited to,
Executive’s employment with ImaRx or the termination of that employment, on the terms set forth
below.
THEREFORE, in consideration of the promises and mutual agreements hereinafter set forth, it is
agreed by and between the undersigned as follows:
1. Severance Package. ImaRx agrees to provide Executive with the following payments
and benefits (“Severance Package”) to which he is not otherwise entitled. Executive acknowledges
and agrees that this Severance Package constitutes adequate legal consideration for the promises
and representations made by him in this Separation Agreement.
1.1 Severance Payment. ImaRx agrees to pay Executive the equivalent of one (1) year’s
base salary, or $250,000.00, less all appropriate federal and state income and employment taxes
(“Severance Payment”) in accordance with the following two sentences. For the first six (6) months
following the Separation Date, the Severance Payment will be made in twelve (12) equal installments
in accordance with ImaRx’s regular payroll schedule, followed by a one-time lump sum payment for
the remaining six (6) months, on the next regular payday. This Section 1.1 reflects the benefits
described in Section 6.3(A) of the Employment Agreement, and is subject to the terms and conditions
of this Separation Agreement. Other than as described in this Section 1.1, no further benefits or
payments are due to Executive under Section 6.3(A) or any other provision of the Employment
Agreement.
1.2 Continuation of Group Health Benefits. ImaRx agrees to pay the premiums required
to continue Executive’s group health care coverage through
October 31, 2007, under the applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), provided that Executive elects to continue and remains
eligible for these benefits under COBRA, and does not obtain health coverage through another
employer during this period. This Section 1.2 provides benefits in addition to those contemplated
under Section 6.3 of the Employment Agreement, and is subject to the terms and
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conditions of this Separation Agreement. If Executive’s group health insurance coverage
included Executive’s dependents immediately prior to the Separation Date, such dependents shall
also be covered at ImaRx’s expense.
1.3 Computers and Cellular Phone. ImaRx agrees to allow Executive to retain the Sony
laptop computer, Dell computer and monitor, and Palm Treo 650 issued to Executive by ImaRx that is
currently in Executive’s possession or control. However, all confidential or proprietary
information in the computers, Palm Treo 650 or on any computer disks within Executive’s possession
or control must be returned in accordance with below paragraph 6 and its subparts.
1.4 Attorneys’ Fees. ImaRx agrees to pay Executive’s attorneys’ fees incurred in
connection with the negotiation of this Separation Agreement up to a maximum of $6,091.00, subject
to applicable taxes, if any.
1.5 Consulting Agreement. As additional consideration for Executive’s acceptance of
this Separation Agreement, ImaRx agrees to retain Executive as a consultant, pursuant to the terms
of the Consulting Agreement between ImaRx and Executive, which Executive is executing concurrently
with this Separation Agreement (the “Consulting Agreement”).
1.6 Stock Option Vesting. Notwithstanding any provision in the Employment Agreement
(including without limitation Section 6.3 or Section 7) to the contrary, the provisions of Section
6.3 or Section 7 of the Employment Agreement providing for accelerated vesting of any and all stock
options granted to Executive shall be null and void and of no force or effect. The vesting of any
and all stock options granted to Executive shall be governed by Section 3.2 of the Consulting
Agreement.
1.7 Amendment to Employment Agreement. Notwithstanding any provision in the
Employment Agreement to the contrary, the entirety of Section 7 of the Employment Agreement shall
be null and void and of no force or effect. In consideration for the benefits offered to Executive
under this Separation Agreement, Executive waives and relinquishes any and all rights or claims to
any and all benefits under Section 7 of the Employment Agreement.
2. Section 409A Compliance. The parties intend for the Employment Agreement and the
Separation Agreement (collectively, this “Agreement”) either to satisfy the requirements of Section
409A of Internal Revenue Code of 1986, as amended and all applicable guidance promulgated
thereunder (“Section 409A”) or to be exempt from the application of Section 409A, and this
Agreement shall be construed and interpreted accordingly. If this Agreement either fails to
satisfy the requirements of Section 409A or is not exempt from the application of Section 409A,
then the parties hereby agree to amend or to clarify this Agreement in a timely manner so that this
Agreement either satisfies the requirements of Section 409A or is exempt from the application of
Section 409A. This Section 2 shall operate as an amendment to the Employment Agreement to bring
the Employment Agreement into good faith compliance with Section 409A and shall replace and
supersede any inconsistent provisions of the Employment Agreement.
2.1 Notwithstanding any provision in this Agreement or in the Consulting Agreement to the
contrary, any termination of employment contemplated under this Agreement shall satisfy the
requirements of a “separation from service” under Section 409A.
2.2 Notwithstanding any provision in this Agreement to the contrary, in the event Executive is
a “specified employee,” as defined in Section 409A, any severance payment, severance benefits or
other amounts payable under this Agreement that would be subject to the special rule regarding
payments to “specified employees” under Section 409A(a)(2)(B) of the
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Internal Revenue Code of 1986, as amended (the “Code”), shall be delayed by six months such
that the first payment is made no earlier than the first date of the seventh month following the
Executive’s separation from service (or the date of Executive’s death, whichever is earlier).
2.3 Notwithstanding any provision in the Employment Agreement (including without limitation
Section 6.3 or Section 7) to the contrary, the original exercise periods for any and all stock
options granted to Executive as determined under the original stock option award agreement(s) shall
remain unchanged and shall not be extended.
2.4 To ensure satisfaction of the requirements of Section 409A(b)(3) of the Code, assets shall
not be set aside, reserved in a trust or other arrangement, or otherwise restricted for purposes of
the payment of amounts payable under this Agreement.
2.5 ImaRx hereby informs Executive that the federal, state, local and/or foreign tax
consequences (including without limitation those tax consequences implicated by Section 409A) of
this Agreement are complex and subject to change. Executive hereby acknowledges that ImaRx has
advised him that he should consult with his own personal tax or financial advisor in connection
with this Agreement and its tax consequences. Executive understands and agrees that ImaRx has no
obligation and no responsibility to provide Executive with any tax or other legal advice in
connection with this Agreement. Executive agrees that he shall bear sole and exclusive
responsibility for any and all personal adverse federal, state, local and/or foreign tax
consequences (including without limitation those tax consequences implicated by Section 409A) of
this Agreement.
3. Mutual General Release.
3.1 Executive unconditionally, irrevocably and absolutely releases and discharges ImaRx, and
any parent and subsidiary corporations, divisions and affiliated corporations, partnerships or
other affiliated entities of ImaRx, past and present, as well as ImaRx’s employees, officers,
directors, agents, successors and assigns (collectively, “Released Parties”) and ImaRx hereby
unconditionally, irrevocably and absolutely releases and discharges Executive, from all claims
related in any way to the transactions or occurrences between them to date, to the fullest extent
permitted by law, including, but not limited to, Executive’s employment with ImaRx, the termination
of Executive’s employment, the PTO Dispute and all other losses, liabilities, claims, charges,
demands and causes of action, known or unknown, suspected or unsuspected, arising directly or
indirectly out of or in any way connected with Executive’s employment with ImaRx. This release is
intended to have the broadest possible application and includes, but is not limited to, any tort,
contract, common law, constitutional or other statutory claims, including, but not limited to
alleged violations of the federal Fair Labor Standards Act, Title VII of the Civil Rights Act of
1964 and the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as
amended, the Arizona Civil Rights Act, and all claims for attorneys’ fees, costs and expenses.
However, this General Release is not intended to bar any claims that, by statute, may not be
waived, such as any challenge to the validity of Executive’s release of claims under the Age
Discrimination in Employment Act of 1967, as amended, as set forth in this Agreement.
3.2 The parties acknowledge that they may discover facts or law different from, or in addition
to, the facts or law that they know or believe to be true with respect to the claims released in
this Separation Agreement and agree, nonetheless, that this Separation Agreement and the release
contained in it shall be and remain effective in all respects notwithstanding such different or
additional facts or the discovery of them.
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3.3 The parties declare and represent that they intend this Separation Agreement to be
complete and not subject to any claim of mistake, and that the release herein expresses a full and
complete release and the parties intend the release herein to be final and complete. The parties
execute this release with the full knowledge that this release covers all possible claims against
the Released Parties, to the fullest extent permitted by law.
3.4 Executive expressly waives his right to recovery of any type, including damages or
reinstatement, in any administrative or court action, whether state or federal, and whether brought
by Executive or on his behalf, related in any way to the matters released herein.
4. Representation Concerning Filing of Legal Actions. The parties represent that, as
of the date of this Separation Agreement, they have not filed any lawsuits, charges, complaints,
petitions, claims or other accusatory pleadings against each other or any of the other Released
Parties in any court or with any governmental agency.
5. Mutual Nondisparagement. Executive agrees that he will not make any voluntary
statements, written or oral, or cause or encourage others to make any such statements that defame,
disparage or in any way criticize the personal and/or business reputations, practices or conduct of
ImaRx or any of the other Released Parties. Similarly, ImaRx, through its officers and directors,
agrees that it will not make any voluntary statements, written or oral, or cause or encourage
others to make any such statements that defame, disparage or in any way criticize the personal
and/or business reputations, practices or conduct of Executive.
6. Confidentiality and Return of ImaRx Property.
6.1 Confidential Separation Information. Executive agrees that the terms and
conditions of this Separation Agreement, as well as the discussions that led to the terms and
conditions of this Separation Agreement (collectively referred to as the “Confidential Separation
Information”) are intended to remain confidential between Executive and ImaRx. Executive further
agrees that he will not disclose the Confidential Separation Information to any other persons,
except that Executive may disclose such information to his immediate family members and to his
attorney(s) and accountant(s), if any, to the extent needed for legal advice or income tax
reporting purposes. When releasing this information to any such person, Executive shall advise the
person receiving the information of its confidential nature. Neither Executive, nor anyone to whom
the Confidential Separation Information has been disclosed will respond to, or in any way
participate in or contribute to, any public discussion, notice or other publicity concerning the
Confidential Separation Information. Without limiting the generality of the foregoing, Executive
specifically agrees that neither he, his immediate family, his attorney nor his accountant, if any,
shall disclose the Confidential Separation Information to any current, former or prospective
employee of ImaRx. Nothing in this section will preclude Executive from disclosing information
required in response to a subpoena duly issued by a court of law or a government agency having
jurisdiction or power to compel such disclosure, or from giving full, truthful and cooperative
answers in response to a duly issued subpoena.
6.2 Confidential or Proprietary Information. Executive also agrees that he will not
use, remove from ImaRx’s premises, make unauthorized copies of or disclose any confidential or
proprietary information of ImaRx or any affiliated or related entities, including but not limited
to, their trade secrets, copyrighted information, customer lists, any information encompassed in
any research and development, reports, work in progress, drawings, software, computer files or
models, designs, plans, proposals, marketing and sales programs, financial projections, and all
concepts or ideas, materials or information related to the business or sales
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of ImaRx and any affiliated or related entities that has not previously been released to the
public by an authorized representative of those companies.
6.3 Continuing Obligations. Executive agrees to abide by all the surviving provisions
of the Employment Agreement and the Invention and Confidential Information Agreement, including but
not limited to, promises to protect all confidential and proprietary information of ImaRx and
promises not to compete with ImaRx, not to solicit any of ImaRx’s employees, and not to induce any
of ImaRx’s customers to discontinue doing business with ImaRx for a period of 12 months from the
Separation Date.
6.4 Return of Company Property. By signing this Separation Agreement, Executive
represents and warrants that he will have returned to ImaRx on or before the Separation Date, all
ImaRx property, including all confidential and proprietary information, as described in paragraph
6.2 above or the Invention and Confidential Information Agreement, and all materials and documents
containing trade secrets and copyrighted materials, including all copies and excerpts of the same,
except at provided in paragraph 1.3 above.
7. Enforcement. If Executive breaches any of the terms in paragraphs 5 or 6 above or
their subparts, ImaRx will immediately cease making the separation payments described in
subparagraph 1.1 above, to the extent those payments have not yet been made. This shall in no way
limit ImaRx’s right to pursue all legal and equitable remedies available to it as a result of
Executive’s breach of this Separation Agreement.
8. No Admissions. By entering into this Separation Agreement, the parties make no
admission that they have engaged, or are now engaging, in any unlawful conduct. The parties
understand and acknowledge that this Separation Agreement is not an admission of liability and
shall not be used or construed as such in any legal or administrative proceeding.
9. Older Workers’ Benefit Protection Act. This Separation Agreement is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f).
Executive, by this Separation Agreement, is advised to consult with an attorney before executing
this Separation Agreement.
9.1 Acknowledgments/Time to Consider. Executive acknowledges and agrees that (a) he
has read and understands the terms of this Separation Agreement; (b) he has been advised in writing
to consult with an attorney before executing this Separation Agreement; (c) that he has obtained
and considered such legal counsel as Executive deems necessary; (d) that he has been given
twenty-one (21) days to consider whether or not to enter into this Separation Agreement (although
Executive may elect not to use the full 21-day period at his option); and (e) that by signing this
Separation Agreement, Executive acknowledges that he does so freely, knowingly, and voluntarily.
9.2 Revocation/Effective Date. This Separation Agreement shall not become effective
or enforceable until the eighth day after Executive signs this Separation Agreement. In other
words, Executive may revoke Executive’s acceptance of this Separation Agreement within seven (7)
days after the date Executive signs it. Executive’s revocation must be in writing and received by
ImaRx’s President & CEO by 5:00 p.m. on the seventh day in order to be effective. If Executive
does not revoke acceptance within the seven (7) day period, Executive’s acceptance of this
Separation Agreement shall become binding and enforceable on the eighth day (“Effective Date”).
The Severance Package shall become due and payable in accordance with paragraph 1, provided this
Separation Agreement has not been revoked.
9.3 Preserved Rights of Executive. This Separation Agreement does not waive or
release any rights or claims that Executive may have under the Age Discrimination in
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Employment Act that arise after the execution of this Separation Agreement. In addition, this
Separation Agreement does not prohibit Executive from challenging the validity of this Separation
Agreement’s waiver and release of claims under the Age Discrimination in Employment Act of 1967, as
amended.
10. Severability. In the event any provision of this Separation Agreement shall be
found unenforceable by an arbitrator or a court of competent jurisdiction, the provision shall be
deemed modified to the extent necessary to allow enforceability of the provision as so limited, it
being intended that the parties shall receive the benefits contemplated herein to the fullest
extent permitted by law. If a deemed modification is not satisfactory in the judgment of such
arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and
enforceability of the remaining provisions shall not be affected thereby.
11. Applicable Law. The validity, interpretation and performance of this Separation
Agreement shall be construed and interpreted according to the laws of the United States of America
and the State of Arizona.
12. Binding on Successors. The parties agree that this Separation Agreement shall be
binding on, and inure to the benefit of, his or its successors, heirs and/or assigns.
13. Full Defense. This Separation Agreement may be pled as a full and complete
defense to, and may be used as a basis for an injunction against, any action, suit or other
proceeding that may be prosecuted, instituted or attempted by either party in breach hereof.
14. Good Faith. The parties agree to do all things necessary and to execute all
further documents necessary and appropriate to carry out and effectuate the terms and purposes of
this Separation Agreement.
15. Entire Agreement; Modification. This Separation Agreement, including the
surviving provisions of the Employment Agreement and Inventions and Confidential Information
Agreement signed by Executive, is intended to be the entire agreement between the parties and
supersedes and cancels any and all other and prior agreements, written or oral, between the parties
regarding this subject matter. It is agreed that there are no collateral agreements or
representations, written or oral, regarding the terms and conditions of Executive’s separation of
employment with ImaRx and settlement of all claims between the parties other than those set forth
in this Separation Agreement. This Separation Agreement may be amended only by a written instrument
executed by all parties hereto.
THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS
SEPARATION AGREEMENT ON THE DATES SHOWN BELOW.
Dated:
|
11-24-06 | By: | /s/ Xxxx X. Xxxxx | |||||||
| ImaRx Therapeutics, Inc. | ||||||||||
Dated:
|
11/28/06 | By: | /s/ Xxxxxxxx X. Xxxxx | |||||||
| President & CEO |
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