SETTLEMENT AGREEMENT
This Agreement (this "Agreement") dated as of December 15, 2006 is entered
into between DELCATH SYSTEMS, INC., a Delaware corporation having its principal
place of business in Stamford, Connecticut (the "Company"), and X. X. Xxxx, an
individual residing in Darien, Connecticut ("Xx. Xxxx").
WHEREAS the Company and Xx. Xxxx are parties to an Employment Agreement
dated as of April 10, 1996, as amended (as so amended, the "Employment
Agreement"), pursuant to which Xx. Xxxx has acted as President and Chief
Executive Officer of the Company; and
WHEREAS, the Company has adopted the Delcath Systems, Inc. Change in
Control Arrangement for Directors effective April 29, 2004 (the "Change in
Control Arrangement"), which provides, among other things, that Xx. Xxxx will
receive a lump sum payment from the Company upon the occurrence of certain
events; and
WHEREAS, Xx. Xxxx is a beneficiary of the Trust Agreement under the Delcath
Systems, Inc. Executive Employment Agreement and Directors Change in Control
Arrangement made as of October 27, 2005 (the "Trust"); and
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company and its stockholders that Xx. Xxxx no longer serve as
President and Chief Executive Officer and Treasurer of the Company; and
WHEREAS, the Company and Xx. Xxxx have agreed to resolve any claims that
Xx. Xxxx may have under the Employment Agreement or the Change in Control
Arrangement;
NOW, THEREFORE, the Company and Xx. Xxxx hereby agree as follows:
1. Xx. Xxxx hereby resigns as President and Chief Executive Officer and
Treasurer of the Company and from any other office held by him in the Company
effective as of the date hereof.
2. Xx. Xxxx will be paid his regular salary through December 31, 2006 and a
lump sum amount equal to $650,000, such lump sum amount to be paid to Xx. Xxxx
on January 2, 2007 and, pending such payment, to be held in escrow by Xxxxxx
Xxxxxxx LLP. Xx. Xxxx acknowledges that it is his current intention to use a
portion of such payment to exercise options to purchase Common Stock of the
Company held by him.
3. For the period from the date hereof through September 30, 2008, the
Company will continue to provide health insurance coverage to Xx. Xxxx
comparable to that currently provided to him by the Company.
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4. The Company and Xx. Xxxx hereby agree to the termination of the
Employment Agreement.
5. Xx. Xxxx hereby relinquishes any rights that he might have under the
Change in Control Arrangement or as a beneficiary of the Trust.
6. The Company hereby confirms to Xx. Xxxx that all outstanding options to
purchase shares of the Company's Common Stock held by him are currently
exercisable.
7. Xx. Xxxx hereby agrees that, for a period of 60 days from the date
hereof, he will consult with the Company's Interim Chief Executive Officer upon
the reasonable request of the Interim Chief Executive Officer, and the Company
hereby agrees to reimburse Xx. Xxxx for any reasonable out of pocket expenses
incurred by Xx. Xxxx in connection with his consultation with the Interim Chief
Executive Officer.
[SIGNATURE PAGE FOLLOWS]
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WITNESS, the signatures of the undersigned as of this 15th day of December
2006.
DELCATH SYSTEMS, INC.
By: /s/ XXXXXXX XXXXX
-----------------------------
Xxxxxxx Xxxxx
Interim Chief Executive
Officer
/s/ X. X. XXXX
---------------------------------
X. X. Xxxx
