EXHIBIT 10.1
SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is made and entered into as of
April 2, 2004 (the "Effective Date"), by and between Xxxx X. Xxxx, Ph.D.
("Executive"), and Chiral Quest, Inc., a Minnesota corporation ("Company").
RECITALS
A. Executive is a member of the Board of Directors of Company and is
employed by Company as President, Chief Executive Officer and Chief Financial
Officer and serves as an officer and member of the Board of Directors of certain
subsidiaries of Company.
B. The parties have determined to mutually agree regarding the terms and
conditions of Executive's separation from Company.
NOW, THEREFORE, in consideration of the foregoing, and the terms and
conditions set forth below, Company and Executive agree as follows.
AGREEMENT
1. Separation from Company. Executive agrees to, and hereby does, resign
as President, Chief Executive Officer and Chief Financial Officer of Company,
effective as of 11:59 p.m. (EST) on the Effective Date; provided, that Executive
shall continue to be employed by Company through June 30, 2004, or such earlier
date as Executive shall determine (such date, the "Employment Termination
Date"), in order to assist Company in the transition to a new chief executive
officer. In no event shall Executive's employment with Company continue beyond
the Employment Termination Date. Executive agrees to, and hereby does, resign
from the Board of Directors of Company and from all directorships and officer
positions in all subsidiaries of Company and all other companies or entities
where he is serving as a representative of Company, effective as of the
Effective Date. Executive and Company acknowledge that Executive's separation
from Company is the result of an agreement to separate on mutually agreeable
terms. Except as expressly provided herein, the Employment Agreement between
Executive and Company dated November 8, 2002, as amended as of October 1, 2003
(the "Employment Agreement"), is terminated by mutual agreement of the parties
as of the Effective Date and has no further force or effect.
2. Benefits and Payments. Company will extend to Executive the following
consideration:
(a) Payments. Provided that Executive does not exercise any of his rights
to revoke his release of discrimination claims pursuant to Section 11 hereof and
otherwise complies with his obligations hereunder, Company agrees that as
separation pay it will (i) continue to pay Executive his annualized base salary
through the Employment Termination Date, in accordance with the Company's
regular payroll practices, and (ii) pay to Executive, on or before the
Employment Termination Date, a lump sum cash payment equal to $375,000 less (A)
the gross amounts paid to Executive under clause (i) and (B) Company's cost of
maintaining Executive's health insurance benefits through the Employment
Termination Date. Executive understands that such payments are subject to
applicable federal and state income tax and FICA withholding.
(b) No Other Remuneration. Executive agrees that he is not entitled
to any remuneration from Company, except as provided in this Agreement. This
includes back pay, sick pay, vacation pay, bonuses, health, life and disability
insurance benefits or any other compensation.
(c) COBRA Insurance Coverage. Executive will continue to be eligible
to receive health insurance benefits through the Employment Termination Date,
the entire cost of which will be deducted from the lump sum payment to be made
to Executive as described in Section 2(a)(ii). If Executive elects any insurance
coverage under COBRA from and after the Employment Termination Date, then
Executive shall be responsible for all amounts due for such insurance coverage
under COBRA.
(d) Stock Options. Executive agrees that all stock options
previously granted to him by the Company, including, without limitation, the
grant described in that certain Stock Option Agreement dated June 26, 2003
between Executive and Company (collectively, the "Stock Options"), are hereby
terminated in their entirety and Executive shall have no further rights to the
Stock Options, including the right to exercise any vested portion thereof.
(e) Out-of-Pocket Expenses. Executive shall submit to Company, by no
later than April 30, 2004, all claims for reimbursement of out-of-pocket
expenses incurred by Executive through the Effective Date in the course of his
employment by Company, including all appropriate receipts or other documentation
evidencing such expenses. Company will promptly reimburse Executive for such
expenses; provided, that Company shall have no obligation to reimburse Executive
for any such expenses for which Executive has not submitted a reimbursement
claim by April 30, 2004. Following the Effective Date, without the prior written
consent of Company, Executive shall have no right to incur, nor be reimbursed
for, any out-of-pocket expense.
3. Non-Disparagement. Executive will not disparage Company, its affiliated
businesses, or its officers, board members, or employees, and Company will not
disparage Executive. Executive shall be afforded a reasonable opportunity to
participate in drafting and approving any Company press release announcing his
departure; provided, however, that if Company and Executive are unable to agree
on the form or substance of such press release, Company may issue the press
release without Executive's consent if Company reasonably believes that such
disclosure is required by applicable law or regulation (including, without
limitation, the securities laws). In response to any request from a prospective
employer for information relating to Executive, Company will confirm, in writing
if requested, Executive's former title, length of employment and ending salary
and related compensation terms. It is otherwise the Company's policy to refrain
from providing any reference information to prospective employers.
4. Employment Agreement. Sections 8.1, 8.3, 8.4 and 8.5 of the Employment
Agreement shall continue to have full force and effect. The Employment
Agreement, in every other respect, including the provisions of Section 8.2, is
hereby terminated.
5. Sale of Company Stock. During the one-year period following the
Effective Date, Executive agrees that he shall sell the shares of Company common
stock now owned by him only in accordance with the provisions of Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"), regardless of
whether any such shares are or will become registered under the Securities Act
or whether another exemption from the registration requirements of the
Securities Act is available; provided, however, that Executive shall not be
required to file any notices required under Rule 144, unless otherwise required
to do so by law. From time to time, at Company's request, Executive will furnish
to Company reasonable assurance that he has complied with Rule 144 (other than
the Rule's notice requirements). Provided that Executive has complied with the
provisions of this Section 5, Company will reasonably cooperate in effecting any
such transfers made by Executive under this Section.
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6. Records, Documents and Property. Executive has returned or will return
to Company within 3 days hereafter all of Company's property (including without
limitation computers), records (including without limitation computer disks and
computer files) correspondence, and documents in Executive's possession or in
Executive's control. Company has returned or will return within 3 days hereafter
all personal effects and possessions of Executive in Company's possession, and
will make reasonable efforts to provide copies of Executive's personal data or
documents in the Company's information systems as requested by Executive.
7. Cooperation; Access to Company Facilities. Until the Employment
Termination Date, Executive agrees to reasonably cooperate with the Company
concerning the furtherance of the Company's business, including but not limited
to the obligation to answer any reasonable questions presented him by the
Company. Executive further agrees to reasonably assist the Company in the
defense of any claim by the Company now and in the future. Company agrees to
reimburse Executive for any out-of-pocket costs incurred by Executive in
assisting Company under this paragraph. Except at Company's request, however,
Executive will not enter any Company facility nor have any interaction with any
Company employee or customer in connection with Company's business. Executive
shall not have the authority to enter any agreement with any third party on
behalf of the Company nor represent to any third party that Executive has such
power.
8. Confidentiality. The terms of this Agreement will be treated as forever
confidential by Executive and Company and, except as provided in this Agreement,
will not be disclosed by Executive to anyone except that (i) Executive may make
such disclosures to his attorney, accountant, and spouse, and as required by law
or regulation or in connection with a legal or administrative action,
proceeding, or investigation, and (ii) Company may make such disclosures to its
executive officers and directors, its accountants, and counsel, and as required
by law or regulation (including applicable securities laws and regulations) or
in connection with any legal or administrative action, proceeding, or
investigation. Except as otherwise required by law, any disclosures permitted by
this paragraph will be made on the condition that the person to whom such
disclosure is made will agree as a condition to in turn keep the terms of this
Agreement confidential.
9. Non-Admission. Nothing in this Agreement is intended to be, nor will be
deemed to be, an admission of liability by Company or Executive that they have
violated any state or federal statute, local ordinance, or principal of common
law, or that Company or Executive has engaged in any wrongdoing.
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10. Release.
In consideration of the payments and other benefits of this
Agreement, Executive hereby fully and finally releases, waives, and otherwise
relinquishes any and all claims that he has or believes he has against Company
through the date of this Agreement. Executive will not bring any lawsuits or
make any other demands against Company, except as necessary to enforce this
Agreement or the Stock Options. The payments and other benefits that Executive
will receive under this Agreement is full and fair consideration for the release
of such claims. Company does not owe Executive anything other than what is set
forth in this Agreement. The payments and other benefits that Executive will
receive hereunder constitute consideration in excess of that to which he is
entitled.
For purposes of this section, "Company" means Chiral Quest, Inc., a
Minnesota corporation, and any subsidiary or any company related to it in the
past or present, and each of them; and past or present officers, directors,
agents and employees of Company and any other person who acted on behalf of
Company or on instructions from Company.
The claims that Executive is releasing, waiving, and otherwise
relinquishing hereunder include all of the rights he has now to any relief of
any kind from Company, including but not limited to, claims for breach of
contract; breach of fiduciary duty; fraud or misrepresentation; rights and
claims for age discrimination under the Age Discrimination in Employment Act
("ADEA"), the Americans with Disabilities Act ("ADA"), the Family and Medical
Leave Act ("FMLA"), or any other federal, state, or local civil rights laws;
defamation; infliction of emotional distress; unlawful or wrongful termination
of employment; and any other claims for unlawful employment practices.
In consideration of the benefits of this Agreement, Company hereby
agrees that it will not bring any lawsuits or press any claims or make any other
demands against Executive, and otherwise relinquishes and waives any and all
claims against Executive that are known to the executive officers of Company
through the date of this Agreement; provided, however, notwithstanding the
foregoing, that Company may bring lawsuits or press claims against Executive as
necessary to enforce this Agreement, Article 8 of the Employment Agreement
(other than Section 8.2 thereof).
11. Rights Concerning Release. Company hereby advises Executive to consult
with an attorney prior to signing this Agreement containing a waiver of claims
under the ADEA.
Executive may take up to twenty-one (21) days to consider his waiver
of rights and claims of age discrimination under the ADEA. Executive understands
that, upon signing this Agreement, he may revoke his waiver of age
discrimination rights and claims under the ADEA within seven (7) days
thereafter, and his waiver of age discrimination rights and claims under the
ADEA will not be effective or enforceable until this seven-day period has
expired.
Executive understands that if he revokes his waiver as set forth in
this Paragraph 11, Company's obligations hereunder will cease and Executive will
be paid only his base salary and for his paid time off through the Effective
Date.
12. Entire Agreement. This Agreement and the employee benefits plans in
which Executive may be a participant, constitute the entire Agreement between
the parties with respect to the termination of Executive's employment
relationship with Company, and the parties agree that there were no other
inducements or representations leading to the negotiation, drafting, and
execution of this Agreement.
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13. Invalidity. In case any one or more of the provisions of this
Agreement should be invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained in
this Agreement will not in any way be affected or impaired.
14. Voluntary and Knowing Action. Executive and Company acknowledge that
they have read and understand this Agreement and voluntarily enter into this
Agreement.
15. Heirs and Successors. This Agreement shall inure to the benefit of and
shall bind the parties, their heirs, successors, representatives, and assigns.
16. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the state of New Jersey.
17. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
18. Notices/Communications. Any notice, request, demand, or communication
permitted, required or given relating to this Agreement either by Company to
Executive or by Executive to Company shall be in writing and, unless otherwise
required under the terms of a separate agreement or law or regulation shall be
deemed to have been given by either party to the other when the party by whom
such notice or communication is given deposits such notice or communication in
the U.S. Postal Service mail, postage prepaid, certified mail, return receipt
requested, properly addressed to the party to whom it is directed. Either party
may, by notice sent in like manner, designate a different address for notices
and communications.
If Sent to Company: If Sent to Executive:
Xxxxxxx X. Xxxxxxxxx, Interim Chairman Xxxx X. Xxxx
Chiral Quest, Inc. 0 Xxxxxx Xxxxx, Xxxxx Xxxxxx
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxx X0 0XX, Xxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
with a copy to: with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP Xxxxxxx & Xxxxx
00 Xxxxx 0xx Xxxxxx, Xxxxx 0000 000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq. Attn: Xxxxxx Xxxxxxx, Esq.
Signature page follows.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on
the day and year written below.
CHIRAL QUEST, INC.
Dated: April 14, 2004 By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Interim Chairman
EXECUTIVE:
Dated: April 8, 2004 /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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