SEPARATION AGREEMENT AND GENERAL RELEASE
SEPARATION
AGREEMENT AND GENERAL RELEASE
Neurogen
Corporation (Company) and I, Xxxxxxx Xxxxxxxxx (Employee), have entered into
this Separation Agreement and General Release (Release) to settle all issues
between us relating in any way to my employment and termination of my employment
with the Company. Except to the extent governed by federal law, this Release
shall be governed by the statutes and common law of Connecticut, excluding
any
that mandate the use of another jurisdiction’s laws. This Release does not
release any claims that I cannot lawfully release.
The
Company and I agree as follows:
Section
1 -- Benefits
(a) In
General:
The
Company promises that I will receive the benefits set forth in this section
that
are conditioned on my signing and delivering this Release to the Company. I
understand and agree that I am not otherwise entitled to receive the benefits
provided to me under this Release. I may revoke the waiver of claims in Sections
2 and 3(b) of this Release within 7 days after I sign it, in which case this
Release will not go into effect and I will not receive the amounts or benefits
set forth herein. The revocation must be made in writing to Xxxxxxx Xxxx, Esq.,
Neurogen Corporation, 00 Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
within the prescribed seven day period. The release of claims becomes effective,
in the absence of a written revocation, on the eighth day after signing. The
Released Parties, as defined below, do not need to sign this Release for it
to
become fully enforceable.
(b) Severance
Pay and Other Consideration:
My
termination date is December 31, 2006 (“Termination Date”). I will continue to
be an at-will employee and accordingly may be paid and continue to receive
benefits in the normal course of business through and including my Termination
Date. After my Termination Date, in exchange for this executed Release and
upon
expiration of the seven day revocation period described in Section 1 (a) above,
I will receive: a lump sum payment equivalent to six (6) months of pay ($130,
810.20), and seventy five percent (75%) of my 2006 “Target Bonus”, estimated to
be twenty-five percent (25%) of my base annual salary ($49,053.85) (“Enhanced
Severance Pay”). The gross Enhanced Severance Pay ($130,810.20 + $49,053.85 =
$179,864.05) shall be subject to all applicable federal, state and local taxes
and withholdings.
In
addition to Enhanced Severance Pay, as further consideration for this Release,
the Company agrees to: (i) forgive the remaining and final twenty percent (20%)
of the $100,000 Promissory Note dated July 9, 2002 between me and the Company
(I
understand the amount forgiven will be subject to taxation); and (ii) accelerate
the vesting of 5,000 shares of restricted stock I hold in the Company that
was
scheduled to vest in May 2007 and will now vest as of January 2, 2007.
(c) Compensation
and Benefit Plans:
In
exchange for this Release, if I elect COBRA coverage and otherwise remain
eligible for coverage, the Company agrees to
continue
paying the Company portion of the premiums on my medical and dental plans for
a
period of six (6) months from my Termination Date, through and including June
30, 2007 (the “Benefit Completion Date”). If I desire to receive medical and
dental plans under COBRA through the Company, I will be responsible for paying
the employee portion of the premium for my medical and dental plans (including
dependents) by check by the first of each month until the Benefit Completion
Date. The checks should be mailed to Xxxxxxx Xxxx at the address provided above.
Except
as
stated in the previous paragraph and paragraphs (i) and (ii) below, I will
cease
to be eligible to participate under any stock option, bonus, incentive
compensation, medical, dental, life insurance, retirement savings, and other
compensation or benefit plans of the Company or any affiliate following my
termination of employment. Thereafter, I will have no rights under any of those
plans, except as follows:
(i)
Group Insurance:
I will
be eligible for the continuation of my existing medical and dental benefits
under COBRA following the Benefit Completion Date at my own expense. The Company
is providing information to me separately on my rights under COBRA.
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(ii)
Qualified Plan Retirement Benefits:
I will
retain my vested benefits, if any, under all qualified retirement plans of
the
Company, and all rights associated with such benefits, as determined under
the
official terms of those plans.
Payments
made under this Release will not be included in my compensation for purposes
of
calculating the benefits to which I am entitled under any employee benefit
program, notwithstanding anything in it to the contrary.
Section
2 -- Complete
Release
(a) In
General:
I
irrevocably and unconditionally release all the Claims described in Section
2(b)
that I may now have against the Released Parties listed in Section 2(d). I
understand that I am not releasing future claims that arise after the
Termination Date.
(b) Claims
Released:
The
Claims I am releasing under Section 2(a) include all known and unknown claims,
promises, causes of action, or similar rights of any type that I presently
may
have (Claims) with respect to any Released Party listed in Section 2(d). I
understand that the Claims I am releasing might arise under many different
foreign, domestic, national, state, or local laws (including statutes,
regulations, other administrative guidance, and common law doctrines), such
as
the following:
Anti-discrimination
statutes,
such as
the Age Discrimination in Employment Act and Executive Order 11,141, which
prohibit age discrimination in employment; Title VII of the Civil Rights Act
of
1964, Sections 1981 and 1983 of the Civil Rights Act of 1866, and Executive
Order 11,246, which prohibit discrimination based on race, color, national
origin, religion, or sex; the
Equal
Pay Act, which prohibits paying men and women unequal pay for equal work; the
Americans With Disabilities Act and Sections 503 and 504 of the Rehabilitation
Act of 1973, which prohibit discrimination based on disability; and any other
federal, state, or local laws prohibiting discrimination, such as the
Connecticut Fair Employment Practices Act, which prohibits discrimination in
employment based on actual or perceived race, religion, color, national origin,
ancestry, physical or mental disability, medical condition, marital status,
sex,
age, sexual orientation, or association with a person who has, or is perceived
to have, any of those characteristics.
Federal
employment statutes,
such as
the WARN Act, which requires that advance notice be given of certain work force
reductions; the Employee Retirement Income Security Act of 1974, which, among
other things, protects employee benefits; the Fair Labor Standards Act of 1938,
which regulates wage and hour matters; the Family and Medical Leave Act of
1993,
which requires employers to provide leaves of absence under certain
circumstances; and any other federal laws relating to employment, such as
veterans’ reemployment rights laws.
Other
laws,
such as
any federal, state, or local laws providing workers’ compensation benefits,
mandating leaves of absence, restricting an employer’s right to terminate
employees, or otherwise regulating employment; any federal, state, or local
law
enforcing express or implied employment contracts or requiring an employer
to
deal with employees fairly or in good faith; any other federal, state, or local
laws providing recourse for alleged wrongful discharge, tort, physical or
personal injury, emotional distress, fraud, negligent misrepresentation,
defamation, and similar or related claims, and any other law relating to salary,
commission, compensation, benefits, and other matters, the Connecticut Workers’
Compensation Act, the Connecticut Family & Medical Leave Act, which mandates
certain leaves of absence, and Connecticut Labor Law.
Examples
of released claims
include,
but are not limited to the following (except to the extent explicitly preserved
by Section 1 or 2(a) of this Release): (i) Claims that in any way relate to
or
arose during my employment with the Company, or the termination of that
employment, such as Claims for compensation, bonuses, commissions, lost wages,
or unused accrued vacation or sick pay; (ii) Claims that in any way relate
to
the design or administration of any employee compensation or benefit program;
(iii) Claims that I have irrevocable or vested rights to severance or similar
benefits or to post-employment health or group insurance benefits; or (iv)
any
Claims to attorneys’ fees or other indemnities (such as under the Civil Rights
Attorneys’ Fees Act), with respect to Claims I am releasing.
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(c) Unknown
Claims:
I
understand that I am releasing Claims that I may not know about. That is
my
knowing and voluntary intent even though I recognize that someday I might
regret
having signed this Release. Nevertheless, I am assuming that risk and I agree
that this Release shall remain effective in all respects in any such case.
I
expressly waive all rights I might have under any law that is intended to
protect me from waiving unknown claims. I understand the significance of
doing
so.
(d) Released
Parties:
The
Released Parties are the Company, all current and former parents, subsidiaries,
related companies, partnerships, or joint ventures, and, with respect to each
of
them, their predecessors and successors; and, with respect to each such entity,
all of its past, present, and future employees, officers, directors,
stockholders, owners, representatives, assigns, attorneys, agents, insurers,
employee compensation and benefit programs (and the trustees, administrators,
fiduciaries, and insurers of such programs), and any other persons acting by,
through, under or in concert with any of the persons or entities listed in
this
subsection, and their successors.
Section
3 -- Promises
(a) Employment
Termination:
I agree
that my employment with the Company and its affiliates ends on my Termination
Date and that I am accepting payments and benefits under this Release in lieu
of
any such other rights or benefits to which I possibly could be or become
entitled. No one has represented to me that the Company or its affiliates will
ever hereafter seek to rehire me.
(b)
Pursuit of Claims:
I have
not filed, initiated, or prosecuted (or caused to be filed, initiated, or
prosecuted) any lawsuit, complaint, charge, action, compliance review,
investigation, or proceeding with respect to any Claim this Release purports
to
waive, and I
promise
never to do so in the future, whether
as a named plaintiff, class member, or otherwise. I
promise
to request any administrative agency or other body assuming jurisdiction of
any
such lawsuit, etc. to withdraw from the matter or dismiss it with prejudice.
However,
the two preceding sentences shall not preclude me from filing or prosecuting
a
charge with any administrative agency with respect to any such Claim as long
as
I do not seek any damages, remedies, or other relief for myself personally,
which I promise not to do, and any right to which I hereby waive.
If I am
ever awarded or recover any amount as to a Claim I have purported to waive
in
this Release, I agree that the amount of the award or recovery shall be reduced
by the amounts I was paid under this Release, increased appropriately for the
time value of money, using an interest rate of 10 percent per annum. To the
extent such a setoff is not affected, I promise to pay, or assign to the Company
my right to receive, the amount that should have been set off. I promise never
directly or indirectly to bring or participate in an action against any Released
Party under any unfair competition law of any jurisdiction. This subsection
(b)
shall not apply to a lawsuit asserting claims under the ADEA. This means that
if
I file a lawsuit asserting an ADEA claim, I will not be liable for the
defendant’s attorneys’ fees in defending the lawsuit. Nevertheless
the release I have given will remain in full force and effect and will bar
recovery for ADEA claims.
(c) Company
Property and Debts:
I have
returned to the Company all files, memoranda, documents, records, copies of
the
foregoing, Company-provided credit cards, keys, building passes, security
passes, access or identification cards, and any other property of the Company
or
any Released Party in my possession or control. I have cleared all expense
accounts, repaid everything I owe to the Company or any Released Party, paid
all
amounts I owe on Company-provided credit cards or accounts (such as cell phone
accounts), and canceled or personally assumed any such credit cards or
accounts.
(d) Taxes:
I am
responsible for paying any taxes on amounts I receive because I signed this
Release. I agree that the Company is to withhold all taxes it determines it
is
legally required to withhold. I agree not to make any claim against the Company
or any other person based on how the Company reports amounts paid under this
Release to tax authorities.
(e) Ownership
of Claims:
I have
not assigned or transferred any Claim I am purporting to release, nor have
I
attempted to do so.
(f) Nonadmission
of Liability:
I agree
not to assert that this Release is an admission of wrongdoing and I acknowledge
that the Released Parties do not believe or admit that any of them has done
anything wrong.
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(g) No
Disparagement or Harm:
I agree
not to criticize, denigrate, or disparage any Released Party. I agree not to
incur any expenses, obligations, or liabilities on behalf of the
Company.
(h) Proprietary
Information and Existing Obligations:
I agree
to always keep confidential all proprietary information of the Company. I agree
to remain bound by any Company or Company affiliate agreement or policy relating
to confidential information, invention, nonsolicitation, noncompetition, or
similar matters to which I am now subject. The terms and conditions of all
such
existing agreements or policies are incorporated in this Release by reference.
(i) Implementation:
I agree
to sign any documents and do anything else that in the future is needed to
implement this Release.
(j) Other
Representations:
In
addition to my other representations in this Release, I have made the following
representations to the Company, on which I acknowledge it also has relied in
entering into this Release with me:
No
Unpaid Amounts:
I
already have been paid all wages, commissions, compensation, benefits, and
other
amounts that any Released Party has ever owed me, except for unpaid amounts
or
benefits expressly payable under the terms of this Release.
ADEA
Release Requirements Have Been Satisfied:
I
understand that this Release had to meet certain requirements to validly release
any ADEA claims I might have had, and I represent that all such requirements
were satisfied. (These requirements are that (1) my entering into this agreement
had to be knowing and voluntary (i.e., free from fraud, duress, coercion, or
mistake of fact); (2) this agreement had to be in writing and be understandable;
(3) it had to explicitly waive current ADEA claims; (4) it could not have waived
future ADEA claims; (5) it must have been paid for with something to which
I was
not already entitled; (6) the Company had to advise me in writing to consult
an
attorney; (7) the Company had to give me at least 45 calendar
days to consider this Release, as well as statistical data on the persons
affected by the Company’s employment termination program; and (8) the
Company had to give me at least 7 days within which to revoke my ADEA release
after signing it.).
(k) Cooperation
Required:
I agree
that I will fully cooperate with the Company or any affiliate in effecting
a
smooth transition of my responsibilities to others. Without in any way limiting
the foregoing, I specifically agree to communicate all relevant information
regarding my work and to finalize any incomplete documentation relating to
my
unfinished work and assignments, including documenting any scientific
experiments and turning in all laboratory notebooks. At the Company’s request I
will return to the Company’s premises to assist in transferring my
responsibilities. In addition, I will promptly and fully respond to all
inquiries from the Company or any affiliate and its representatives relating
to
any lawsuit or investigation concerning my work at the Company. To the extent
I
incur out-of-pocket expenses (such as postage costs, travel expenses or
telephone charges) in assisting the Company or any affiliate at its request,
the
Company will mail me a reimbursement check for those expenses within 15 days
after it receives my request for payment, along with satisfactory written
substantiation of the claimed expenses. Furthermore,
for the six (6) months following my Termination Date, I agree to consult with
the Company’s Chief Corporate Counsel or Chief Operating Officer before
executing any trades in any Company stock or other securities in accordance
with
the Xxxxxxx Xxxxxxx Pre-Clearance Procedures of the Company that I have been
subject to as an “Executive Officer” of the Company.
(l) This
Release to be Kept Confidential:
I have
not disclosed and will never disclose the terms of this Release, including
but
not limited to the benefits provided hereunder, to anyone other than a member
of
my immediate family or my attorney or other professional advisor and, even
as to
such a person, only if the person agrees to honor this confidentiality
requirement. Such a person’s violation of this confidentiality requirement is to
be treated as a violation by me. This subsection does not prohibit disclosures
to the extent necessary legally to enforce this Release, nor does it prohibit
disclosures to the extent otherwise legally required (but only if I notify
the
Company of a disclosure obligation or request within 3 days after I learn of
it
and permit the Company to take all steps it deems to be appropriate to prevent
or limit the required disclosure).
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Section
4 -- Consequences
of Violating Promises
General
Consequences:
In
addition to any other remedies or relief that may be available, I agree to
pay
any attorneys’ fees (including in-house counsel costs) and damages Released
Parties may incur as a result of my breaching a promise I made in this Release
(such as by suing a Released Party over a released Claim) or if any
representation I made in this Release was false when made. I agree that the
minimum damages for each breach will be half of the attorneys’ fees each
Released Party incurs as a result of the breach, which is a reasonable estimate
of the value of the time the Released Party is likely to have to spend seeking
a
remedy for the breach. I further agree that the Company would be irreparably
harmed by any actual or threatened violation of Section 3 that involves
Release-related disclosures or disclosure or use of confidential or proprietary
information or trade secrets or solicitation of employees, customers, or
suppliers, and that the Company will be entitled to an injunction prohibiting
me
from committing any such violation.
Section
5 -- Consideration
of Release
I
acknowledge that, before signing this Release, I was given a period of at least
45 calendar days to consider this Release, as well as statistical data on any
persons also affected by this same employment termination program. I waive
any
right I might have to additional time beyond this consideration period within
which to consider this Release. I acknowledge that: (a) I took advantage of
this
period to consider this Release before signing it; (b) I carefully read this
Release; (c) I fully understand it; (d) I am entering into it voluntarily;
(e) I
am receiving valuable consideration in exchange for my execution of this Release
that I would not otherwise be entitled to receive; and (f) the Company, in
writing, encouraged me to discuss this Release with my attorney (at my own
expense) before signing it, and that I did so to the extent I deemed
appropriate.
Section
6 -- Miscellaneous
(a) Entire
Agreement:
This
Release is the entire agreement between me and the Company relating to my
termination of employment or the subject matter of this Release. This Release
may not be modified or canceled in any manner, nor may any provision of it
or
any legal remedy with respect to it be waived, except by a writing signed by
both me and an authorized Company official. I acknowledge that the Company
has
made no representations or promises to me (such as that my former position
will
remain vacant), other than those in or referred to by this Release. If any
provision in this Release is found to be unenforceable, all other provisions
will remain fully enforceable.
(b) Successors:
This
Release binds my heirs, administrators, representatives, executors, successors,
and assigns, and will inure to the benefit of all Released Parties and their
respective heirs, administrators, representatives, executors, successors, and
assigns.
(c) Interpretation:
This
Release shall be construed as a whole according to its fair meaning. It shall
not be construed strictly for or against me or any Released Party. Unless the
context indicates otherwise, the term “or” shall be deemed to include the term
“and” and the singular or plural number shall be deemed to include the other.
Captions are intended solely for convenience of reference and shall not be
used
in the interpretation of this Release.
Section
7 -- Arbitration
of Disputes
(a) Arbitrable
Disputes:
The
Company and I agree to resolve any claims we may have with each other (except,
if either I or the Company so elects, any dispute for which injunctive relief
is
a principal remedy) through final and binding arbitration in accordance with
this section. I also agree to resolve in accordance with this section any claim
between me and any other Released Party who offers or agrees to arbitrate the
claim in this manner. This arbitration requirement applies to, among other
things, disputes about the validity, interpretation, or effect of this Release
or alleged violations of it, claims of discrimination under federal or state
law, or other statutory violation claims.
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(b) The
Arbitration:
Except
as otherwise provided in any other enforceable arbitration agreement between
me
and the Company (Another Arbitration Agreement), which the Company and I hereby
reaffirm if one exists, the arbitration shall be in accordance with the
then-current arbitration rules and procedures for employment disputes governing
arbitrations administered by the American Arbitration Association (AAA), except
as provided in this section. Arbitration shall take place in the state of
Connecticut before an experienced employment arbitrator licensed to practice
law
in the state who has been selected in accordance with subsection (c). The
arbitrator may not modify or change this Release in any way. I, the Company,
and
any Released Party who agrees to arbitrate an Arbitrable Dispute under this
section agree to submit to personal jurisdiction in the state listed in the
first paragraph of this Release for such arbitration and in any jurisdiction
necessary for the enforcement of any arbitration award. I represent that this
state is a convenient dispute resolution location for me.
(c) Selection
of the Arbitrator:
The
arbitrator shall be selected as follows: AAA shall give each party a list of
11
arbitrators drawn from its panel of employment dispute arbitrators. Each party
may strike all names on the list it deems unacceptable. If only one common
name
remains on the lists of both parties, that individual shall be designated as
the
Arbitrator. If more than one common name remains on the lists of both parties,
the parties shall strike names alternately from the list of common names until
only one remains. The party who did not initiate the claim shall strike first.
If no common name exists on the lists of both parties, AAA shall furnish an
additional list and the process shall be repeated. If no arbitrator has been
selected after two lists have been distributed, then the parties shall strike
alternately from a third list, with the party initiating the claim striking
first, until only one name remains. That person shall be designated as the
arbitrator. Striking decisions must be made and communicated to the other party
and AAA within 10 calendar days after the date of the transmittal communication
relaying the arbitrators remaining for selection. In the event a party does
not
make a timely strike, the other party may select the arbitrator from the names
remaining.
(d) Fees
and Expenses:
Each
party shall pay the fees of his or her attorneys, the expenses of his or her
witnesses, and any other expenses that party incurs in connection with the
arbitration, but all costs of the arbitration itself, including the fees of
the
arbitrator, the cost of any record or transcript of the arbitration,
administrative fees, and other fees and costs shall be paid in equal shares
by
the plaintiff(s) and defendant(s). At my written request and on a showing of
substantial hardship, the Company shall advance all or a portion of my share
of
those arbitration costs to the extent they would exceed the out-of-pocket costs
I would have incurred in a lawsuit. The party losing the arbitration shall
reimburse the party who prevailed for all attorneys’ fees and expenses the
prevailing party paid pursuant to this subsection (d), except to the extent
prohibited by a statute under which the dispute has been brought.
(e) Exclusive
Remedy:
Arbitration in this manner shall be the exclusive remedy for any claim that
must
be arbitrated pursuant to this section. Should I or the Company attempt to
resolve such a claim by any method other than arbitration pursuant to this
section, the responding party will be entitled to recover from the initiating
party all damages, expenses, and attorneys’ fees incurred as a result of that
breach.
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TAKE
THIS RELEASE HOME, READ IT, AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS
BEFORE SIGNING IT: IT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS,
AND
ITS ARBITRATION-OF-CLAIMS REQUIREMENT WAIVES YOUR RIGHT TO A JURY
TRIAL.
IF YOU WISH, YOU SHOULD TAKE ADVANTAGE OF THE FULL CONSIDERATION
PERIOD
AFFORDED BY SECTION 5 AND YOU SHOULD CONSULT YOUR
ATTORNEY.
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Executed
at Branford,
CT
this
29
day of
December,
2006.
/s/
Xxxxxxx X. Xxxxxxxxx
Employee
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