FORM OF AGREEMENT REGARDING SEVERANCE ARRANGEMENTS
Exhibit 10.1
FORM OF AGREEMENT REGARDING SEVERANCE ARRANGEMENTS
May , 2009
Re: Severance Arrangements.
Dear :
As we have discussed, due to recent regulatory developments adversely affecting Northfield’s
business and the company’s limited financial resources, Xxxxxxxxxx’s board of directors has
authorized management to pursue an orderly winding up of the company’s business. Xxxxxxxxxx is
accordingly terminating the current employment relationship of each of our executive officers. As
a result, your employment as an officer and employee of Northfield will terminate as of May 8,
2009.
Under the terms of your [severance protection][executive employment] agreement with
Northfield, the termination of your employment will be deemed an involuntary termination without
cause. Therefore, you will be entitled to certain severance benefits under your agreement. Your
severance benefits are summarized on the attached schedule.
Xxxxxxxxxx has previously advised you and its other executive officers that the company’s
available cash resources are not currently sufficient to permit the immediate payment in full of
the severance benefits due to Northfield’s executive officers. We have accordingly agreed that you
will receive on the next regular scheduled payroll payment of your unused PTO plus your normal
earnings through May 8. You agree to defer receipt of the remainder of your severance payment
until such time as Northfield is able to sell or otherwise dispose of its owned manufacturing
facility in Mt. Prospect, Illinois.
Xxxxxxxxxx has advised you that the deferred severance payments due to you and the company’s
other executive officers totals $3,146,853, which includes payment of health insurance. You
understand that Northfield cannot guarantee that the proceeds from the sale or other disposition of
its manufacturing facility will be sufficient to permit payment in full of the deferred severance
payments due to you and Northfield’s other executive officers. You and the other executive officers
have therefore each agreed that, to the extent such sale proceeds are insufficient to pay in full
all of the deferred severance amounts, Xxxxxxxxxx will pay each executive his or her pro rata share
of the available proceeds, determined based on the respective amounts of the deference severance
payments due to each executive officer.
This will confirm that to the extent you are entitled to subsidized COBRA coverage under the
terms of your agreement, but such coverage is not available because of the discontinuation of
Northfield’s health insurance plan, Northfield will make a cash payment to you equal to the
employer portion of the premium for you and your covered dependents for your current coverage under
our existing health insurance plan, determined as of the time the coverage ceases. These payments
will continue for the period that you would otherwise have been entitled to subsidized COBRA
benefits under the terms of your agreement.
Any payments and other benefits provided to you in accordance with this letter agreement will
be subject to tax withholding to the extent required by law.
If you agree with the foregoing arrangements, please sign that enclosed counterpart of this
letter agreement and return it to the undersigned.
NORTHFIELD LABORATORIES INC.
Xxxxxx and accepted this May ___, 2009:
