CONSULTING AGREEMENT
Exhibit 10.56
This Consulting Agreement (“Agreement”) is made by and between Xxxxx X. Xxxxxxxxxxxx
(“Employee”) and Ciphergen Biosystems, Inc. (“Company”) (collectively referred to as the
“Parties”).
RECITALS
WHEREAS, Employee has been employed by the Company as its Executive Vice President, Sales &
Marketing;
WHEREAS, the Company and Employee entered into a Confidential Information and Invention
Assignment Agreement (the “Confidentiality Agreement”);
WHEREAS, the Company and Employee has entered into a Retention Bonus Agreement, dated June 7,
2006 (the “Retention Bonus Agreement”) as defined by the Bonus and Retention Plan, effective as of
June 7, 2006 (the”Bonus and Retention Plan”).
WHEREAS, Employee has voluntarily resigned from his employment with the Company, effective as
of January 5, 2007 (the “Resignation Date”);
WHEREAS, Employee wishes to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions and demands that he may have against the Company, including, but not
limited to, any and all claims arising or in any way related to his employment with, or separation
from, the Company;
NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as
follows:
COVENANTS
Consulting Period. Employee hereby resigns as the Company’s Executive Vice President,
Sales & Marketing as of the Resignation Date, provided that the Employee agrees to remain with the
Company from the Resignation Date through six (6) months following the Effective Date (the
“Consulting Period”). Additionally, upon the mutual consent of Company and Employee, the Company
may extend the term of the Consulting Period, for which Employee will continue to be paid his
current base rate of pay (and shall not be entitled to any other benefits for such period). During
the Consulting Period Employee shall be required to provide such services as reasonably requested
by the then current Chief Executive Officer, up to two (2) days per week, except that if Employee
notifies the Company that he has become a full-time employee of another employer the consulting
services will reduce to an as needed basis and scheduled to not interfere with the other employment
Employee. Consulting services may include, but are not limited to, assisting with the overseeing
of the successful conclusion of the implementation of the
transaction agreement with Bio-Rad and the identification and execution of a pharma business
partner alliance, strategic planning, and providing assistance with any pending litigation against
the Company (including attending depositions and serving as a witness for the Company for any
trial) (the “Consulting Services”) with any and all reasonable out-of-pocket expenses reimbursed by
the Company. The times and places of performance shall be set so as to best accommodate the
schedules of the Parties, and not unnecessarily interfere with (i) other employment or business
ventures of Employee (including part-time employment or consulting with other businesses), and/or
(ii) normal business operations of the Company. Nothing in this Agreement shall in any way be
construed to constitute Employee as an agent, employee or representative of the Company. Without
limiting the generality of the foregoing, Employee is not authorized to bind the Company to any
liability or obligation or to represent that Employee has any such authority. Employee agrees
that, during the Consulting Period, he will not, without the prior written consent of the Company,
(i) serve as a partner, consultant, officer, director, manager, agent, associate, investor, or (ii)
directly or indirectly, own, purchase, organize, or (iii) build, design, finance, acquire, lease,
operate, manage, invest in, work or consult for or otherwise affiliate himself with any business,
in direct competition with or otherwise similar to the Company’s products or services. A business
in direct competition with or otherwise similar to the Company’s products or services is defined as
a business that seeks to do competitive business with existing customers of the Company or with
customers that the Company might reasonably anticipate seeking within six months of the end of
Employee’s consulting period.
A. Consideration. The Company agrees to make payments to Employee, at his current base
rate of pay, less applicable withholding, for six (6) months following the Resignation Date, in
accordance with the Company’s regular payroll practices. Except as expressly set forth herein,
during the Payment Period, Employee will not be entitled to accrual of any employee benefits,
including, but not limited to, vacation benefits or bonuses.
1. Retention Bonus. The Employee will continue to be a “Participant,” as such term is
defined in the Retention and Bonus Plan, and Employee’s Retention Bonus will continue to vest for
six (6) months following the Resignation Date, as long as the Employee remains in compliance with
the terms and conditions set forth in this Agreement.
2. Benefits. The Company shall reimburse Employee for the payments Employee makes for
medical, dental and vision insurance coverage for himself and currently covered dependents,
consistent with Employee’s prior rate of coverage and cost to Employee (including related
administrative fees), under the Consolidated Budget Reconciliation Act of 1985 (“COBRA”) through
the earlier of (i) six (6) months following the Effective Date or (ii) until Employee becomes a
full-time employee of another company or entity. Payment Period, provided (i) Employee timely
elects and pays for COBRA coverage, and (ii) Employee shall continue to be responsible for
employee-paid deductibles, co-pays, and the like. Payments made to the Employee for COBRA coverage
under this section shall be reported to the Employee on Form 1099’s that the Company issues to
employee in connection with providing the services set forth
under Section A hereof. Except as set forth expressly herein, Employee has ceased
accruing all other employee benefits, including, but not limited to, vacation time and paid time
off, short-term and long-term disability insurance and workers compensation as of the Resignation
Date.
3. Death or Disability. In the event of Employee’s Death, then Employee shall no
longer be entitled to any continued payments or other benefits set forth hereunder.
B. Confidential Information. Employee shall continue to maintain the confidentiality
of all confidential and proprietary information of the Company and shall continue to comply with
the terms and conditions of the Confidentiality Agreement between Employee and the Company.
Employee shall return all of the Company’s property and confidential and proprietary information in
his possession to the Company at the end of the Consulting Period.
C. Payment of Salary. Employee acknowledges and represents that the Company has paid
all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to
Employee as of the Resignation Date.
D. Release of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company. Employee has,
on behalf of himself and his respective heirs, family members, executors, officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns, hereby fully and forever releases the Company
and its respective officers, directors, employees, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, from, and
agrees not to xxx concerning, any claim, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or unsuspected, that he may
possess arising from any omissions, acts or facts that have occurred up until and including the
Effective Date of this Agreement including, without limitation,
1. any and all claims relating to or arising from Employee’s employment relationship with the
Company and the termination of that relationship;
2. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;
3. any and all claims under the law of any jurisdiction including, but not limited to,
wrongful discharge of employment; constructive discharge from employment; termination in violation
of public policy; discrimination; breach of contract, both express and implied; breach of a
covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent
or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices; defamation; libel; slander;
negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;
4. any and all claims for violation of any federal, state or municipal statute, including, but
not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, Older Workers Benefit Protection Act; the California Fair Employment
and Housing Act, and the California Labor Code;
5. any and all claims for violation of the federal, or any state, constitution;
6. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;
7. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and
8. any and all claims for attorneys’ fees and costs.
The Company and Employee agree that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters released. This release
does not extend to any obligations incurred under this Agreement.
The Parties acknowledge and agree that any breach of any provision of this Agreement shall
constitute a material breach of this Agreement and, in the event of breach by Employee, shall
entitle the Company immediately to recover and cease the benefits provided to Employee under this
Agreement.
E. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”) and that this waiver and release is knowing and voluntary. Employee and the Company agree
that this waiver and release does not apply to any rights or claims that may arise under ADEA after
the Effective Date of this Agreement. Employee acknowledges that the consideration given for this
waiver and release Agreement is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing that:
(a) he should consult with an attorney prior to executing this Agreement;
(b) he has up to twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this Agreement to revoke the Agreement;
(d) this Agreement shall not be effective until the revocation period has expired; and
(e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically authorized by federal
law.
F. Civil Code Section 1542. Employee represents that he is not aware of any claim
other than the claims that are released by this Agreement. Employee acknowledges that he has been
advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542,
which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law principles of similar effect.
G. No Pending or Future Lawsuits. The Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or entity, against the
Company or any other person or entity referred to herein. The Employee also represents that he
does not intend to bring any claims on his behalf or on behalf of any other person or entity
against the Company or any other person or entity referred to herein.
H. Confidentiality. The Parties acknowledge that their agreement to keep the terms
and conditions of this Agreement confidential was a material factor on which all parties relied in
entering into this Agreement. The Parties hereto agree to use their best efforts to maintain in
confidence the existence of this Agreement, the contents and terms of this Agreement, the
consideration for this Agreement, and any allegations relating to the Company or employee’s
employment with the Company except as otherwise provided for in this Agreement (hereinafter
collectively referred to as “Settlement Information”). The Parties agree to take every reasonable
precaution to prevent disclosure of any Settlement Information to third parties, and agree that
there will be no publicity, directly or indirectly, concerning any Settlement Information. The
Parties agree to take every precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities (including any required filings with the Securities and Exchange
Commission), and family members who have a reasonable need to know of such Settlement
Information. The Parties agree that if a party proves that the other party breached this
Confidentiality provision, it shall be entitled to an award of its costs spent enforcing this
provision, including all reasonable attorneys’ fees associated with the enforcement action without
regard to whether the actual damages can be established from the breach.
I. No Cooperation. Each Party agrees it will not act in any manner that might damage
the other party. The Parties agree that they will not counsel or assist any attorneys or their
clients in the presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints by any third party against the other party and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or
other court order to do so. The Parties further agree both to immediately notify the other party
upon receipt of any court order, subpoena, or any legal discovery device that seeks or might
require the disclosure or production of the existence or terms of this Agreement, and to furnish,
within three (3) business days of its receipt, a copy of such subpoena or legal discovery device to
the other party.
J. Non-Disparagement. Each party agrees to refrain from any defamation, libel or
slander of the other, or tortious interference with the contracts and relationships of the other.
All inquiries by potential future employers of Employee will be directed to Human Resources. Upon
inquiry, the Company shall only state the following: Employee’s last position and dates of
employment. The Company’s obligations under this section extend only to then current executives,
officers, members of the Board of Directors, and managing agents, and only for so long as those
individuals are employees and/or directors of the Company.
K. Non-Solicitation. Employee agrees that, commencing on the Resignation Date and
continuing for a period of twelve (12) months following the date Employee ceases to serve as a
consultant pursuant to Section A hereunder, Employee shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their
employment, or take away such employees, or attempt to solicit, induce, recruit, encourage, take
away or hire employees of the Company, either for himself or any other person or entity.
L. No Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of disputed claims. No action taken by the
Parties hereto, or either of them, either previously or in connection with this Agreement shall be
deemed or construed to be: (a) an admission of the truth or falsity of any claims heretofore made
or (b) an acknowledgment or admission by either party of any fault or liability whatsoever to the
other party or to any third party.
M. No Knowledge of Wrongdoing. Employee represents that he has no knowledge of any
wrongdoing involving improper or false claims against a federal or state governmental agency, or
any other wrongdoing that involves Employee or other present or former Company employees.
N. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payment of any sums to Employee under the terms of this Agreement.
Employee agrees and understands that he is responsible for payment, if any, of local, state and/or
federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of Employee’s failure to pay federal or
state taxes or damages sustained by the Company by reason of any such claims, including reasonable
attorneys’ fees.
O. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees
and other fees incurred in connection with this Agreement.
P. Indemnification. Each party agrees to indemnify and hold harmless the other party
from and against any and all loss, costs, damages or expenses, including, without limitation,
attorneys’ fees or expenses incurred by the non-breaching party arising out of the breach of this
Agreement by the other party, or from any false representation made herein by the other party, or
from any action or proceeding which may be commenced, prosecuted or threatened by the other party
or for that party’s benefit, upon that party’s initiative, or with that party’s aid or approval,
contrary to the provisions of this Agreement. Each party further agrees that in any such action or
proceeding, this Agreement may be pled by a party as a complete defense, or may be asserted by way
of counterclaim or cross-claim. The Company acknowledges the continued applicability of Employee’s
officer and director Indemnification Agreement by and between Company and Employee (the
“Indemnification Agreement”).
Q. Arbitration. The Parties agree that any and all disputes arising out of, or
relating to, the terms of this Agreement, their interpretation, and any of the matters herein
released, shall be subject to binding arbitration in Santa Xxxxx County before the American
Arbitration Association under its National Rules for the Resolution of Employment Disputes. The
Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief
in any court of competent jurisdiction to enforce the arbitration award. The Parties agree that
the prevailing party in any arbitration shall be awarded its reasonable attorneys’ fees and costs.
The Parties hereby agree to waive their right to have any dispute between them resolved in a court
of law by a judge or jury. This section will not prevent either party from seeking injunctive
relief (or any other provisional remedy) from any court having jurisdiction over the Parties and
the subject matter of their dispute relating to Employee’s obligations under this Agreement and the
agreements incorporated herein by reference.
R. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in
law or equity or otherwise of or against any of the claims or causes of action released
herein.
S. No Representations. Each party represents that it has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Neither party has relied upon any representations or statements made
by the other party hereto which are not specifically set forth in this Agreement.
T. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision so long as the remaining provisions remain
intelligible and continue to reflect the original intent of the Parties.
U. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Company and Employee concerning the subject matter of this Agreement and Employee’s
relationship with the Company, and supersedes and replaces any and all prior agreements and
understandings between the Parties concerning the subject matter of this Agreement and Employee’s
relationship with the Company, with the exception of the Indemnification Agreement, Confidentiality
Agreement and the Stock Agreements.
V. No Waiver. The failure of any party to insist upon the performance of any of the
terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms
and conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms
or conditions. This entire Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.
W. No Oral Modification. Any modification or amendment of this Agreement, or
additional obligation assumed by either party in connection with this Agreement, shall be effective
only if placed in writing and signed by both Parties or by authorized representatives of each
party. No provision of this Agreement can be changed, altered, modified, or waived except by an
executed writing by the Parties.
X. Governing Law. This Agreement shall be deemed to have been executed and delivered
within the State of California, and it shall be construed, interpreted, governed, and enforced in
accordance with the laws of the State of California, without regard to conflict of law principles.
To the extent that either party seeks injunctive relief in any court having jurisdiction for any
claim relating to the alleged misuse or misappropriation of trade secrets or confidential or
proprietary information, each party hereby consents to personal and exclusive jurisdiction and
venue in the state and federal courts of the State of California.
Y. Attorneys’ Fees. In the event that either Party brings an action to enforce or
effect its rights under this Agreement, the prevailing party shall be entitled to recover its costs
and expenses, including the costs of mediation, arbitration, litigation, court fees, plus
reasonable attorneys’ fees, incurred in connection with such an action.
Z. Application for Employment. Employee understands and agrees that, as a condition
of this Agreement, he shall not be entitled to any employment with the Company, its subsidiaries,
or any successor, and he hereby waives any right, or alleged right, of employment or re-employment
with the Company. Employee further agrees that he will not apply for employment with the Company,
its subsidiaries or related companies, or any successor.
AA. Effective Date. This Agreement is effective after it has been signed by both
parties and after eight (8) days have passed since Employee has signed the Agreement (the
“Effective Date”), unless revoked by Employee within seven (7) days after the date the Agreement
was signed by Employee.
BB. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.
CC. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties hereto, with the full
intent of releasing all claims. The Parties acknowledge that:
1. they have read this Agreement;
2. they have been represented in the preparation, negotiation, and execution of this Agreement
by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;
3. they understand the terms and consequences of this Agreement and of the releases it
contains; and
4. they are fully aware of the legal and binding effect of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.
CIPHERGEN BIOSYSTEMS, INC. |
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Dated: January 9, 2007 | By: | /s/ Xxxx X. Page | ||
Xxxx X. Page, | ||||
President and Chief Executive Officer | ||||
Dated: January 5, 2007 | By: | /s/ Xxxxx X. Xxxxxxxxxxxx | ||
Xxxxx X. Xxxxxxxxxxxx, an individual | ||||