EXHIBIT 10.16
INCOME SECURITY AGREEMENT
This INCOME SECURITY AGREEMENT is dated as of October 1, 2004 (the
"Effective Date"), by and between Xxxxx Laboratories, Inc., a Texas corporation,
(the "Company") and Xxxxxx X. Xxxxxxxx ("Employee").
INTRODUCTION
Employee is a key management employee of the Company.
The Company considers the establishment and maintenance of a sound and
vital management team to be essential to protecting and enhancing the interests
of the Company and its stockholders.
The Company wishes to enhance its ability to retain able managers by
providing them with the assurance of severance benefits in certain circumstances
as provided herein.
NOW, THEREFORE, in order to induce Employee to continue in the employment
of the Company and in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the Company and Employee agree as
follows:
AGREEMENT
ARTICLE 1
ENTITLEMENT UPON TERMINATION OF EMPLOYMENT
1.1 Eligibility. Subject to Section 1.2 hereof, the Company shall pay
Employee the payments and benefits in Article 2 hereof if:
(a) The Company terminates Employee's employment without Cause,
other than as a result of death or Disability; or
(b) Employee resigns for Good Reason upon or within one year after a
Change in Control.
1.2 Release Required. As a condition to the Company's obligation to pay
the payments and benefits pursuant to Article 2 hereof, Employee shall be
required to comply with Article 4 hereof and to execute and not revoke within
the revocation period provided therein, if applicable, a comprehensive release,
covenant not to xxx, noncompetition, nonsolicitation, and non-disparagement
agreement from Employee in favor of the Company, its executives, officers,
directors, affiliates, and all related parties, in substantially the form as is
attached as Exhibit A hereto, including such modifications as the Company may in
its sole discretion require to cause such agreement to be enforceable.
ARTICLE 2
COMPENSATION UPON TERMINATION
2.1 Severance Benefits. If Employee is entitled to payment and benefits
pursuant to Article 1, the Company shall pay or provide Employee the following:
(a) base salary for the period from the beginning of the payroll
period immediately before the Date of Termination through the Date of
Termination at the highest rate in effect within the one hundred eighty
days before the Date of Termination;
(b) one year of annual base salary at the highest rate in effect
within the one hundred eighty days before the Date of Termination, payable
in substantially equal installments no less frequently than monthly over a
twelve-month period, commencing promptly following the Date of
Termination;
(c) any annual bonus awarded by the Compensation Committee for any
previously completed fiscal year but unpaid as of the Date of Termination;
(d) Company paid premiums for group health plan coverage for the
benefit of Employee, Employee's spouse and dependents for one year
following the Date of Termination, to the extent Employee elects and he,
his spouse and dependents are eligible for COBRA continuation coverage for
such period; and
(e) the benefits of the indemnification provided by the Company's
certificate of incorporation, bylaws, or otherwise, and in the event of a
Change in Control, such indemnification shall be no less favorable to
Employee as provided by the Company's certificate of incorporation,
bylaws, or otherwise, immediately before the Change in Control, and any
changes subject to a Change in Control to the certificate of
incorporation, bylaws, or otherwise reducing the indemnification granted
to such Employee shall not affect the rights granted hereunder.
2.2 No Mitigation. The amount of any payment provided for in this Article
shall not be reduced, offset or subject to recovery by the Company by reason of
any compensation earned by Employee as the result of employment by another
employer after the Date of Termination or otherwise.
2.3 Offset. The payments and benefits hereunder shall be offset by any
severance benefits payable to Employee under any other severance plan, program
or arrangement.
ARTICLE 3
LIMITATION ON COMPENSATION
3.1 Parachute Payment Limitation. If any of the payments or benefits
payable to Employee under this Agreement plus, if any, any other payments or
benefits to which Employee is also entitled, are subject to an excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") or
any successor section thereto, the Company shall pay Employee either (a) all
payments and benefits under the Agreement and all other payments and benefits to
which he is entitled, or (b) the amount of the payments and benefits under this
Agreement and all other payments
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and benefits to which he is entitled, reduced to the minimum extent necessary to
cause no excise tax to be incurred, whichever results in Employee retaining a
greater after-tax amount.
3.2 Auditor's Determination. All determinations required to be made under
this Article shall be made by the independent outside certified public
accounting firm last used by the Company before the event described in Code
Section 280G giving rise to the excise tax, or such other certified public
accounting firm as the parties shall mutually agree, which auditors shall
provide detailed supporting calculations to the Company and Employee. In
computing taxes, the auditors shall use the highest marginal federal, state and
local income tax rates applicable to Employee and shall assume the phase out of
personal exemptions and personal deductions to the extent projected to be
applicable to Employee for purposes of computing federal income tax liability.
ARTICLE 4
PROTECTION OF PROPRIETARY INFORMATION
4.1 Conditions of Payment and Benefits. The Company's obligation to pay
the payments and benefits under Article 2 is contingent upon Employee's
compliance with his obligations under this Article, and if Employee breaches any
provision of this Article, he shall be required to repay all such payments and
benefits; provided, however, this shall not limit the Company's other available
legal or equitable remedies, including without limitation the Company's right to
seek specific performance of the obligations set forth herein.
4.2 Noncompetition. As an inducement for the Company to enter into this
Agreement and to pay the severance payments and benefits to which Employee would
not otherwise be entitled, and to protect the confidential and proprietary
information and client relationships developed by the Company the parties agree
as follows:
(a) For a period of one year from the Date of Termination, Employee
will not, directly engage or invest in, own, manage, operate, finance,
control or participate in the ownership, management, operations, financing
or control of, lend his name or any similar or any similar name to, lend
his credit to, or render services or advice to any business, other than
the Company, with regard to products or activities that include the
manufacture or sale of respiratory pharmaceuticals which are competitive
with the products of the Company or any Company subsidiary (including
products in development or under consideration by the Company during
Employee's employment) (such competitive products being referred to
collectively, as "Respiratory Pharmaceutical Business") anywhere in the
United States; provided, however, that Employee may purchase or otherwise
acquire up to (but not more than) four percent of any class of securities
of any enterprise (but without otherwise) participating in the activities
of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g)
of the Securities Exchange Act of 1934, as amended. Employee agrees that
this covenant is reasonable with respect to its duration, geographical
area, and scope.
(b) For a period of one year following the Date of Termination,
Employee further agrees that he will not, directly or indirectly, either
for himself or any other person, (i) induce or attempt to induce any
employee of the Company or any Company subsidiary, with whom Employee had
material contact during his employment, to leave the employ of the Company
or any Company subsidiary, (ii) in any way interfere with the relationship
between the Company or any Company subsidiary and any former, current or
future employee of the
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Company or any Company subsidiary, (iii) employ, or otherwise engage as an
employee, independent contractor, or otherwise, any former, current or
future employee of the Company or any Company subsidiary to cease doing
business with the Company or any Company subsidiary, or in any way
interfere with the relationship between any former, current or future
customer, supplier, licensee, or business relation of the company or any
Company subsidiary.
(c) For a period of one year following the Date of Termination,
Employee further agrees that he will not, directly or indirectly, either
for himself or any other person, in competition with the Company, solicit
the Respiratory Pharmaceutical Business of any customer of the Company or
any Company subsidiary with whom Employee had material contact during his
employment with the Company.
4.3 Confidentiality. All Confidential Information and Trade Secrets and
all physical embodiments thereof received or developed by Employee while
employed by the Company are confidential to and are and will remain the sole and
exclusive property of the Company. Employee will hold such Confidential
Information and Trade Secrets in trust and strictest confidence, and will not
use, reproduce, distribute, disclose or otherwise disseminate the Confidential
Information and Trade Secrets or any physical embodiments thereof and may in no
event take any action causing or fail to take the action necessary in order to
prevent, any Confidential Information and Trade Secrets disclosed to or
developed by Employee to lose its character or cease to qualify as Confidential
Information or Trade Secrets.
4.4 Return of Company Property. Upon request by the Company, provided that
the Company shall act in good faith and adhere to a reasonableness standard in
the evaluation of Employee's compliance with this provision, Employee will
promptly deliver to the Company all property belonging to the Company,
including, without limitation, all Confidential Information and Trade Secrets
(and all embodiments thereof) then in Employee's custody, control or possession.
4.5 Survival. The covenants of confidentiality set forth herein will apply
to any Confidential Information and Trade Secrets disclosed by the Company or
developed by Employee prior to or after the date hereof. The covenants
restricting the use of Confidential Information will continue for a period of
three years following the Date of Termination. The covenants restricting the use
of Trade Secrets will continue following the Date of Termination for so long as
permitted by applicable law.
ARTICLE 5
SUCCESSORS AND ASSIGNS
5.1 No Assignment by Employee. Employee may not assign this Agreement.
This Agreement shall inure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If Employee should die while any amount
would still be payable hereunder if Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Employee's estate.
5.2 Assignment by the Company. The Company may assign this Agreement only
to any entity which acquires all or substantially all of the Company's assets or
to any entity which acquires all or substantially all of the Company's business
including without limitation by way of stock sale. The permitted assignment of
this Agreement by the Company shall be a novation and in the event of
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such assignment, Xxxxx Laboratories, Inc. shall cease to have any obligations
hereunder and Employee's rights shall be solely with respect to the assignee. In
such event, the assignee shall be deemed to be the "Company" for purposes of
this Agreement and Employee shall not be deemed to have terminated employment
from the Company until Employee shall have terminated employment from the
assignee.
ARTICLE 6
GENERAL PROVISIONS
6.1 Termination and Amendment. This Agreement may be terminated or amended
only by mutual agreement of the Company and Employee, provided, however, that
this Agreement shall expire upon Employee's employment termination under
circumstances not entitling him to payments and benefits hereunder, or if
Employee is entitled to payment and benefits hereunder, upon the Company
satisfying all of its obligations hereunder. The provisions of Article 4 hereof
shall survive termination or expiration of this Agreement.
6.2 Taxes. All payments to be made to Employee under this Agreement will
be subject to required withholding for taxes.
6.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without regard to principles
of choice of laws.
6.4 Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or five days after being mailed by
United States registered or certified mail, return receipt requested, postage
prepaid and addressed, in the case of the Company, to the addresses set forth
below or, in the case of Employee, to the address set forth below Employee's
signature, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
Send notice to: General Counsel
Xxxxx Laboratories, Inc.
Colonial Court
000 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
With a copy to: Secretary of the Company
Xxxxx Laboratories, Inc.
Colonial Court
000 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
6.5 Severability. The invalidity and unenforceability of any particular
provision of this Agreement shall not affect any other provision of this
Agreement, and the Agreement shall be construed in all respects as if the
invalid or unenforceable provision were omitted.
6.6 Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is agreed to in a
writing signed by Employee and a duly authorized officer of the Company. No
waiver by a party hereto at any time of
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any breach by the other party hereto of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.
6.7 DISPUTE RESOLUTION. ANY DISPUTE OR CONTROVERSY ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY ARBITRATION IN
THE STATE OF NEW JERSEY IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA"), WITHOUT APPLICATION OF ANY SUPPLEMENTARY RULES PROMULGATED
BY THE AAA. JUDGMENT MAY BE ENTERED ON THE ARBITRATORS' AWARD IN ANY COURT
HAVING JURISDICTION OVER THE PARTIES AND EACH PARTY CONSENTS TO THE JURISDICTION
OF THE COURT OF THE STATE OF NEW JERSEY FOR SUCH PURPOSE. AFTER A CHANGE IN
CONTROL, IN THE EVENT EMPLOYEE PREVAILS IN WHOLE OR IN PART IN SUCH PROCEEDING,
THE COMPANY SHALL PAY EMPLOYEE'S REASONABLE FEES AND EXPENSES INCURRED IN
CONNECTION WITH SUCH DISPUTE OR CONTROVERSY (INCLUDING WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES AND EXPENSES) AND ALL COSTS OF THE ARBITRATION.
NOTWITHSTANDING THE FOREGOING, THE COMPANY MAY SEEK RELIEF IN A COURT OF LAW OR
EQUITY SEEKING EQUITABLE RELIEF IN THE EVENT OF ANY BREACH OF ARTICLE 4 BY
EMPLOYEE. BY THIS PROVISION IT IS THE INTENT OF EACH PARTY TO WAIVE ANY RIGHT TO
A JURY TRIAL ON ANY DISPUTE OR CONTROVERSY ARISING UNDER OR IN CONJUNCTION WITH
THIS AGREEMENT.
EMPLOYEES INITIALS: /s/ HA
______
ON BEHALF OF THE COMPANY: /s/ MV
______
ARTICLE 7
DEFINITIONS
7.1 Cause means "Cause" as defined in any employment agreement between the
Company and Employee or, if none:
(a) willful refusal by Employee to follow a lawful direction of his
supervisor or the Board of Directors of the Company, provided the
direction is not materially inconsistent with the duties or
responsibilities of Employee's job position of the Company, which refusal
continues after his supervisor or the Board of Directors has given written
notice of Employee's failure to follow the direction;
(b) willful misconduct or reckless disregard by Employee of his
duties or of the interest or property of the Company;
(c) Employee's breach of the covenants set forth in Article 4 of
this Agreement;
(d) any act by Employee of fraud, material misappropriation,
significant dishonesty, or act involving moral turpitude;
(e) commission by Employee of a felony; or
(f) Employee's addiction to the use of drugs or alcohol, or
Employee's intoxication with alcohol or illegal drugs while on the
Company's premises or in the performance of Employee's duties.
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7.2 Change in Control means and includes the occurrence of any one of the
following events but shall specifically exclude a Public Offering:
(a) the acquisition by any Person or Persons (other than any Person
owning equity securities representing more than ten percent of the value
or voting power of the Company's equity securities as of the Effective
Date or any employee benefit plan of the Company) acting in concert of
equity securities of the Company if, after the transaction, the acquiring
Person or Persons own, control, or hold equity securities representing
more than fifty percent of the value or voting power of the Company's
outstanding equity securities;
(b) a reorganization, merger, share exchange combination or
consolidation, with respect to which persons who were the stockholders of
the Company immediately prior to such reorganization, merger, share
exchange combination or consolidation do not, immediately thereafter, own
equity securities of the survivor representing more than fifty percent of
the value or voting power of the survivor's outstanding equity securities;
or
(c) the sale, transfer or assignment of all or substantially all of
the assets of the Company other than to a company that is controlling,
controlled by, or under common control with the Company.
7.3 Confidential Information means data and information relating to the
business of the Company or an affiliate (which does not rise to the status of a
Trade Secret) which is or has been disclosed to Employee or of which Employee
became aware as a consequence of or through his relationship to the Company or
an affiliate and which has value to the Company or an affiliate and is not
generally known to its competitors. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the public by the
Company or an affiliate (except where such public disclosure has been made by
Employee without authorization) or that has been independently developed and
disclosed by others, or that otherwise enters the public domain through lawful
means without breach of any obligations of confidentiality owed to the Company
or any of its affiliates.
7.4 Date of Termination means the effective date of Employee's termination
of employment from the Company and all of its subsidiaries.
7.5 Disability has the meaning assigned such term in the Company's
long-term disability plan, from time to time in effect, or if none, an illness
or injury of Employee which results in Employee's inability to perform, with
reasonable accommodation, the essential duties of his employment for the Company
for at least one hundred eighty days in a twelve-month period.
7.6 Good Reason means, without Employee's written consent:
(a) any reduction by the Company in the rate of, or failure to pay
at least monthly, Employee's annual base salary; or
(b) a material reduction in Employee's level of responsibility,
position (including status, office, title, reporting relationships or
working conditions), authority or duties.
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An event described above shall constitute "Good Reason" only if Employee
gives notice to the Company of the occurrence of the event within thirty days
after the occurrence of the event, within fifteen days thereafter the Company
shall fail to remedy fully the event, and Employee shall resign within sixty
days after the Company's failure to timely remedy such event.
7.7 Person means any individual, corporation, partnership, group,
association or other person, as such term is used in Section 14(d) of the
Securities Exchange Act of 1934, as amended.
7.8 Public Offering shall mean a public offering of any class or series of
the Company's equity securities pursuant to a registration statement filed by
the Company under the Securities Act of 1933, as amended.
7.9 Trade Secrets means information including, but not limited to,
technical or nontechnical data, formulae, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which (a) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (b) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy.
Without limiting the foregoing, Trade Secret means any item of confidential
information that constitutes a "trade secret(s)" under the common law or
statutory law of the State of New Jersey.
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
XXXXX LABORATORIES, INC.
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx Xxxxxxxx
-------------------------------------
Address: ____________________________
_____________________________________
_____________________________________
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EXHIBIT A
RELEASE, AGREEMENT PURSUANT TO
INCOME SECURITY AGREEMENT
This Agreement (this "Agreement") is made this ___ day of _____, 200_, by
XXXXX LABORATORIES, INC. (the "Employer") and ________________ (the "Employee").
Introduction
Employee and the Employer entered into an Income Security Agreement dated
________, 2004 (the "Income Security Agreement").
The Income Security Agreement requires that as a condition to the
Employer's obligation to pay payments and benefits under the Income Security
Agreement (the "Severance Benefits"), Employee must provide a release and agree
to certain other conditions as provided herein.
NOW, THEREFORE, the parties agree as follows:
1. [FOR EMPLOYEE UNDER AGE 40: THE EFFECTIVE DATE OF THIS AGREEMENT SHALL BE
THE DATE ON WHICH EMPLOYEE SIGNS THIS AGREEMENT ("THE EFFECTIVE DATE"), AT
WHICH TIME THIS AGREEMENT SHALL BE FULLY EFFECTIVE AND ENFORCEABLE.]
[FOR EMPLOYEE AGE 40 AND OVER OR GROUP TERMINATION OF EMPLOYEES AGE 40 AND
OVER: EMPLOYEE HAS BEEN OFFERED [TWENTY-ONE (21) DAYS] [FORTY-FIVE (45)
DAYS IF GROUP TERMINATION] FROM RECEIPT OF THIS AGREEMENT WITHIN WHICH TO
CONSIDER THIS AGREEMENT. THE EFFECTIVE DATE OF THIS AGREEMENT SHALL BE THE
DATE EIGHT (8) DAYS AFTER THE DATE ON WHICH EMPLOYEE SIGNS THIS AGREEMENT
("THE EFFECTIVE DATE"). FOR A PERIOD OF SEVEN (7) DAYS FOLLOWING
EMPLOYEE'S EXECUTION OF THIS AGREEMENT, EMPLOYEE MAY REVOKE THIS
AGREEMENT, AND THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
UNTIL SUCH SEVEN (7) DAY PERIOD HAS EXPIRED. EMPLOYEE MUST COMMUNICATE THE
DESIRE TO REVOKE THIS AGREEMENT IN WRITING. EMPLOYEE UNDERSTANDS THAT HE
OR SHE MAY SIGN THE AGREEMENT AT ANY TIME BEFORE THE EXPIRATION OF THE
[TWENTY-ONE (21) DAY] [FORTY-FIVE (45) DAY] REVIEW PERIOD. TO THE DEGREE
EMPLOYEE CHOOSES NOT TO WAIT [TWENTY-ONE (21) DAYS] [FORTY-FIVE (45) DAYS]
TO EXECUTE THIS AGREEMENT, IT IS BECAUSE EMPLOYEE FREELY AND UNILATERALLY
CHOOSES TO EXECUTE THIS AGREEMENT BEFORE THAT TIME. EMPLOYEE'S SIGNING OF
THE AGREEMENT TRIGGERS THE COMMENCEMENT OF THE SEVEN (7) DAY REVOCATION
PERIOD.]
2. In exchange for Employee's execution of this Agreement and in full and
complete settlement of any and all claims, the Employer will provide
Employee with the Severance Benefits.
3. [FOR EMPLOYEE AGE 40 OR OVER OR GROUP TERMINATION OF EMPLOYEES AGE 40 AND
OVER: EMPLOYEE ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT IS IN
COMPLIANCE WITH THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND THE OLDER
WORKERS BENEFIT PROTECTION ACT AND THAT THE RELEASES SET FORTH IN THIS
AGREEMENT SHALL BE APPLICABLE, WITHOUT LIMITATION, TO ANY CLAIMS BROUGHT
UNDER THESE ACTS.]
The release given by Employee in this Agreement is given solely in
exchange for the consideration set forth in this Agreement and such
consideration is in addition to anything of value that Employee was
entitled to receive prior to entering into this Agreement.
Employee has been advised to consult an attorney prior to entering into
this Agreement [FOR EMPLOYEE AGE 40 OR OVER OR GROUP TERMINATION OF
EMPLOYEES AGE 40 AND OVER: AND THIS PROVISION OF THE AGREEMENT SATISFIES
THE REQUIREMENT OF THE OLDER WORKERS BENEFIT PROTECTION ACT THAT EMPLOYEE
BE SO ADVISED IN WRITING].
[FOR UNDER AGE 40: EMPLOYEE HAS BEEN OFFERED AN AMPLE OPPORTUNITY FROM
RECEIPT OF THIS AGREEMENT WITHIN WHICH TO CONSIDER THIS AGREEMENT.]
By entering into this Agreement, Employee does not waive rights or claims
that may arise after the date this Agreement is executed.
4. [FOR GROUP TERMINATION OF EMPLOYEES AGE 40 AND OVER: THE EMPLOYER HAS
________________________________________________ [THE EMPLOYER TO DESCRIBE
CLASS, UNIT, OR GROUP OF INDIVIDUALS COVERED BY TERMINATION PROGRAM, ANY
ELIGIBILITY FACTORS, AND TIME LIMITS APPLICABLE] AND SUCH EMPLOYEES
COMPRISE THE "DECISIONAL UNIT." ATTACHED AS "ATTACHMENT 1" TO THIS
AGREEMENT IS A LIST OF AGES AND JOB TITLES OF PERSONS IN THE DECISIONAL
UNIT WHO WERE AND WHO WERE NOT SELECTED FOR TERMINATION AND THE OFFER OF
CONSIDERATION FOR SIGNING THE AGREEMENT.]
5. This Agreement shall in no way be construed as an admission by the
Employer that it has acted wrongfully with respect to Employee or any
other person or that Employee has any rights whatsoever against the
Employer. The Employer specifically disclaims any liability to or wrongful
acts against Employee or any other person on the part of itself, its
employees or its agents.
6. As a material inducement to the Employer to enter into this Agreement,
Employee hereby irrevocably releases the Employer and each of the owners,
stockholders, predecessors, successors, directors, officers, employees,
representatives, attorneys, affiliates (and agents, directors, officers,
employees, representatives and attorneys of such affiliates) of the
Employer and all persons acting by, through, under or in concert with them
(collectively the "Releasees"), from any and all charges, claims,
liabilities, agreements, damages, causes of action, suits, costs, losses,
debts and expenses (including attorneys' fees and costs actually incurred)
of any nature whatsoever, known or unknown, including, but not limited to,
rights arising out of alleged violations of any contracts, express or
implied, any covenant of good faith and fair dealing, express or implied,
or any tort, or any legal restrictions on the Employer's right to
terminate employees, or any federal, state or other governmental statute,
regulation, or ordinance, including, without limitation: (1) Title VII of
the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991
(race, color, religion, sex, and national origin discrimination); (2) the
Employee Retirement Income Security Act ("ERISA"); (3) 42 U.S.C.
Section 1981 (discrimination); (4) the Americans with Disabilities Act
(disability discrimination); (5) the Equal Pay Act; [FOR EMPLOYEE AGE 40
OR OVER OR GROUP TERMINATION OF EMPLOYEES AGE 40 AND OVER: (6) THE AGE
DISCRIMINATION IN EMPLOYMENT ACT; (7) THE OLDER WORKERS BENEFIT PROTECTION
ACT;] (6) Executive Order 11246 (race, color, religion, sex, and national
origin discrimination); (7) Executive Order 11141 (age discrimination);
(8) Section 503 of the Rehabilitation Act of 1973 (disability
discrimination);
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(9) negligence; (10) negligent hiring and/or negligent retention; (11)
intentional or negligent infliction of emotional distress or outrage; (12)
defamation; (13) interference with employment; (14) wrongful discharge;
(15) invasion of privacy; or (16) violation of any other legal or
contractual duty arising under the laws of the State of New Jersey or the
laws of the United States ("Claim" or "Claims"), which Employee now has,
or claims to have, or which Employee at any time heretofore had, or
claimed to have, or which Employee at any time hereinafter may have, or
claim to have, against each or any of the Releasees, in each case as to
acts or omissions by each or any of the Releasees occurring up to and
including the Effective Date.
7. The release in the preceding paragraph of this Agreement does not apply to
(a) all benefits and awards (including without limitation cash and stock
components) which pursuant to the terms of any compensation or benefit
plans, programs, or agreements of the Employer are earned or become
payable, but which have not yet been paid, and (b) pay for accrued but
unused vacation that the Employer is legally obligated to pay Employee, if
any, and only if the Employer is so obligated, (c) unreimbursed business
expenses for which Employee is entitled to reimbursement under the
Employer's policies, and (d) any rights to indemnification that Employee
has from the Employer or under any directors and officers or other
insurance policy the Employer maintains.
8. Employee promises that he will not make statements detrimental to the
interests of any of the Releasees or engage in activities detrimental to
any of the Releasees. Employee agrees not to make any statements about any
of the Releasees to the press (including without limitation any newspaper,
magazine, radio station or television station) without the prior written
consent of the Employer. The obligations set forth in the two immediately
preceding sentences will expire two years after the Effective Date.
Employee will also cooperate with the Employer and its affiliates if the
Employer requests Employee's testimony. To the extent practicable and
within the control of the Employer, the Employer will use reasonable
efforts to schedule the timing of Employee's participation in any such
witness activities in a reasonable manner to take into account Employee's
then current employment, and will pay the reasonable documented
out-of-pocket expenses that the Employer pre-approves and that Employee
incurs for travel required by the Employer with respect to those
activities.
9. Employee agrees not to disclose the existence or terms of this Agreement
or the Income Security Agreement to anyone. However, Employee may disclose
them to a member of his immediate family or legal or financial advisors if
necessary and on the condition that the family member or advisor similarly
does not disclose these terms to anyone. Employee understands that he will
be responsible for any disclosure by a family member or advisor as if he
had disclosed it himself. This restriction does not prohibit Employee's
disclosure of this Agreement or its terms to the extent necessary during a
legal action to enforce this Agreement or to the extent Employee is
legally compelled to make a disclosure. However, Employee will notify the
Employer promptly upon becoming aware of that legal necessity and provide
it with reasonable details of that legal necessity.
10. Employee has not filed or caused to be filed any lawsuit, complaint or
charge with respect to any Claim he releases in this Agreement. Employee
promises never to file or pursue a lawsuit, complaint or charge based on
any Claim released by this Agreement, except that Employee may participate
in an investigation or proceeding conducted by an agency of the United
States Government or of any state. Employee also has not assigned or
transferred any
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claim he is releasing, nor has he purported to do so. [FOR GROUP
TERMINATION OF EMPLOYEES AGE 40 AND OVER: EMPLOYEE COVENANTS AND AGREES
NOT TO INSTITUTE, OR PARTICIPATE IN ANY WAY IN ANYONE ELSE'S ACTIONS
INVOLVED IN INSTITUTING, ANY ACTION AGAINST ANY OF THE MEMBERS OF THE
DECISIONAL UNIT WITH RESPECT TO ANY CLAIM RELEASED HEREIN.]
11. Employee acknowledges that if Employee breaches any of the conditions set
forth herein or in Article 4 of the Income Security Agreement, Employee
shall not be entitled to any of the Severance Benefits, and shall be
obligated to return to Employer upon demand an amount equal to all
Severance Benefits that Employee has received, and reimburse Employer for
any legal fees incurred in connection with the breach or enforcement of
these provisions, but this shall not limit any other remedies available to
the Employer.
12. The Employer and Employee agree that the terms of this Agreement shall be
final and binding and that this Agreement shall be interpreted, enforced
and governed under the laws of the State of New Jersey. The provisions of
this Agreement can be severed, and if any part of this Agreement is found
to be unenforceable, the remainder of this Agreement will continue to be
valid and effective.
13. This Agreement sets forth the entire agreement between the Employer and
Employee and fully supersedes any and all prior agreements or
understandings, written and/or oral, between the Employer and Employee
pertaining to the subject matter of this Agreement.
14. Employee is solely responsible for the payment of any fees incurred as the
result of an attorney reviewing this agreement. In any litigation
concerning the validity or enforceability of this contract or in any
litigation to enforce the provisions of this contract, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs,
including court costs and expert witness fees and costs.
Employee's signature below indicates Employee's understanding and agreement with
all of the terms in this Agreement.
Employee should take this Agreement home and carefully consider all of its
provisions before signing it. [FOR EMPLOYEE AGE 40 OR OVER OR GROUP TERMINATION
OF EMPLOYEES AGE 40 AND OVER: EMPLOYEE MAY TAKE UP TO [TWENTY-ONE (21) DAYS]
[FORTY-FIVE (45) DAYS IF GROUP TERMINATION] TO DECIDE WHETHER EMPLOYEE WANTS TO
ACCEPT AND SIGN THIS AGREEMENT. ALSO, IF EMPLOYEE SIGNS THIS AGREEMENT, EMPLOYEE
WILL THEN HAVE AN ADDITIONAL SEVEN (7) DAYS IN WHICH TO REVOKE EMPLOYEE'S
ACCEPTANCE OF THIS AGREEMENT AFTER EMPLOYEE HAS SIGNED IT. THIS AGREEMENT WILL
NOT BE EFFECTIVE OR ENFORCEABLE, NOR WILL ANY CONSIDERATION BE PAID, UNTIL AFTER
THE SEVEN (7) DAY REVOCATION PERIOD HAS EXPIRED.] Again, Employee is free and
encouraged to discuss the contents and advisability of signing this Agreement
with an attorney of Employee's choosing.
EMPLOYEE SHOULD READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS. EMPLOYEE IS STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE EXECUTING THIS DOCUMENT.
4
IN WITNESS WHEREOF, Employee and the Employer have executed this agreement
effective as of the date first written above.
EMPLOYEE
________________________________
Print Name
________________________________
Signature
________________________________
Date Signed
XXXXX LABORATORIES, INC.
By: _______________________________
Title:_____________________________
5
ATTACHMENT I
[INSERT DESCRIPTIVE NAME OF DECISIONAL UNIT FROM THE AGREEMENT]
EMPLOYEES COMPRISING THE "DECISIONAL UNIT"
JOB TITLE: AGE: PARTICIPATING: NOT PARTICIPATING:
-------------------- -------------- ------------------- ------------------
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