SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
10.01
SEPARATION AGREEMENT AND
GENERAL RELEASE
THIS
SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is entered into as of
February 9, 2008 between Genelabs Technologies, Inc. (the "Company") and Xxxxx
A.D. Xxxxx ("Employee") (together the "Parties").
WHEREAS,
Employee is currently employed by the Company as its President and Chief
Executive Officer ("CEO") on an at-will basis;
WHEREAS,
Employee has decided to resign from his position as President and CEO and as a
director, officer and employee of the Company and its subsidiaries as of January
29, 2008 (the "Separation Date"); and
WHEREAS,
the Parties desire to resolve, fully and finally, all matters relating to
Employee's employment with, and separation from, the Company.
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
hereinafter, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Employee, each
intending to be legally bound, hereby agree as follows:
1. SEPARATION. The
Parties hereby agree that Employee's employment with the Company and any of its
subsidiaries shall end as of the Separation Date and Employee hereby resigns as
a director and officer of the Company and each of its subsidiaries as of the
Separation Date.
2. ANNUAL BONUS
PAYMENT. Upon the Effective Date of this Agreement, the
Company shall pay Employee a lump sum amount of $100,350, which constitutes full
payment of Employee's 2007 annual bonus under the Company's Annual Bonus
Plan.
3. CONSIDERATION.
a. In
consideration of Employee's release of all claims and other covenants and
agreements contained herein, and provided that Employee has not exercised any
revocation rights as provided in Section 6 below and has complied with all
obligations and
covenants
contained in this Agreement, the Company shall provide Employee with the
following payments and benefits (together, the "Consideration"):
(i) Subject
to Employee's compliance with the consulting obligation set forth in Section 12
of this Agreement and the other terms, conditions and covenants provided herein,
the Company shall pay Employee an aggregate amount of $234,150, subject to all
applicable tax withholding, payable over seventeen (17) semi-monthly
installments on the Company's regular payroll schedule beginning on the first
regular Company payroll date following the Effective Date (as defined herein) of
this Agreement (the "Payment Period");
(ii) Subject
to Employee's compliance with the consulting obligation set forth in Section 12
of this Agreement and the other terms, conditions and covenants provided herein,
the stock option exercise period for any options to purchase Company common
stock previously granted to Employee that are fully vested as of the Separation
Date will be extended through the Payment Period; and
(iii) If
Employee timely elects COBRA continuation coverage the Company will pay
Employee's COBRA premiums (i.e., the COBRA premiums the
Employee would have to pay to continue the medical, dental and/or vision
coverage Employee and, if applicable, his eligible dependents had immediately
prior to the Separation Date) for the shorter of (A) the period of twelve (12)
months from the Separation Date, or (B) the period from the Separation Date
until such time as Employee becomes eligible for health insurance benefits
through a subsequent employer. After such period of Company-paid
coverage, Employee (and, if applicable, Employee's eligible dependents) may
continue COBRA coverage at Employee's own expense in accordance with COBRA and
no provision of this Agreement will affect the continuation coverage rules under
COBRA. Amounts paid under this Section 3(a)(iii) will be subject to
tax withholding as required by applicable law.
b. This
Agreement shall become effective on the eighth (8th) day
after the date that Employee delivers this signed Agreement to the Company (the
"Effective Date"), conditioned upon Employee not exercising his revocation
rights as set forth in Section 6 herein. In the event Employee does
not sign or revokes this Agreement pursuant to Section 6 herein, the Employee
shall have no right to the Consideration.
c. Employee
must be in full compliance with all of the terms and obligations under this
Agreement as of each Payment Date in order to receive the remaining, unpaid
Consideration. Employee agrees that in the event he breaches any term of this
Agreement, the Company shall not be obligated to provide, and Employee shall
have no right to receive, the Consideration and any portion of the Consideration
already paid to Employee must be returned to the Company
immediately.
d. Employee
acknowledges that he has received all unpaid wages and accrued but unused
vacation earned through the Separation Date. Employee acknowledges
and agrees that the Consideration is in addition to any sums or benefits
otherwise owed to Employee
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and
such Consideration is provided solely in exchange for the waiver and release of
all claims and other covenants and agreements contained herein.
e. Notwithstanding
anything in this Agreement to the contrary, if required by section 409A of the
Internal Revenue Code of 1986, as amended, the amounts described in Section
3(a) hereof shall not be paid prior to the date that is six (6) months following
the Separation Date.
4. RELEASE. In
exchange for the Consideration provided pursuant to Section 3(a) above,
Employee fully releases and forever discharges the Company and its parent,
subsidiaries, predecessors, successors and assigns, as well as each of their
officers, directors, employees, agents and shareholders (collectively, the
"Released Parties"), from any and all liability upon any and all claims,
charges, complaints, liens, demands, causes of action, obligations or damages,
known or unknown, suspected or unsuspected, that Employee had, now has or may
hereafter claim to have against the Released Parties arising out of or relating
in any way to: (i) Employee’s hiring by, employment with, association
with or separation from the Company or (ii) any event, series of events,
occurrences, acts or failures relating in any way to any of the Released Parties
occurring at any time up to the date of this Agreement (the
"Release"). This Release specifically extends to, without limitation,
any claims or causes of action for wrongful termination, breach of an express or
implied contract, breach of the covenant of good faith and fair dealing, breach
of fiduciary duty, fraud, misrepresentation, defamation, slander, infliction of
emotional distress, personal injury, loss of future earnings, and any claims
under the California constitution, the United States Constitution and any
applicable local, state and federal statutes, regulations or ordinances,
including, but not limited to, the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, as amended (the "ADEA"), the Older Workers
Benefit Protection Act, as amended, the Fair Labor Standards Act, as amended,
the Americans with Disabilities Act of 1990, as amended the Rehabilitation Act
of 1973, as amended, Section 806 of the Xxxxxxxx-Xxxxx Act, the Worker
Adjustment and Retraining Notification Act, as amended, the Employee Retirement
Income Security Act of 1974, as amended, the Family and Medical Leave Act, the
California Fair Employment and Housing Act, as amended, the California Family
Rights Act, as amended and the California Labor Code Section 1400 et seq.; provided, however, that this
Release shall not waive any claims that may not be legally waived, including,
but not limited to, any claim for unpaid wages, workers' compensation benefits,
unemployment benefits and any claims under section 2802 of the California Labor
Code.
5. WAIVER. Employee
expressly waives all rights afforded by Section 1542 of the Civil Code of the
State of California ("Section 1542") with respect to the Released
Parties. Section 1542 states as follows:
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GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY
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HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Notwithstanding
the provisions of Section 1542, and for the purpose of implementing a full and
complete release, Employee understands and agrees that this Agreement is
intended to include all claims, if any, which Employee may have and which
Employee does not now know or suspect to exist in his favor against the Released
Parties and that this Agreement extinguishes those claims. Employee
further agrees that if he, in contravention of this Section 5, asserts any
claims against the Company or otherwise attempts to avail himself of the
benefits of Section 1542, he will immediately return to the Company all
Consideration previously paid to him pursuant to Section 3(a) of this Agreement
and the Company will have no obligation to pay Employee any Consideration not
yet paid.
6. REVIEW AND REVOCATION
RIGHTS. Employee understands that he is waiving his rights
under the ADEA and thus:
a. Employee
has been informed and understands and agrees that he has twenty-one (21)
calendar days after receipt of this Agreement to consider whether to sign
it.
b. Employee
has been informed and understands and agrees that he may change his mind and
revoke this Agreement at any time during the seven (7) calendar days after this
Agreement is signed, in which case none of the provisions of this Agreement will
have any effect. Employee may revoke the Agreement by delivering a
written notification of his revocation to: Xxxxxx Xxxx at Skadden, Arps, Slate,
Xxxxxxx & Xxxx, LLP, via e-mail at xxxxx@xxxxxxx.xxx or via mail to 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx, Xxxxxxxxxx, 00000.
c. Employee
agrees that prior to signing this
Agreement, he read and understood each and every provision of this
Agreement.
d.
Employee agrees that prior to signing this
Agreement, he had the opportunity to consult with an attorney of his choosing
regarding the effect of each and every provision of this Agreement.
e. Employee
acknowledges and agrees that he knowingly and voluntarily entered into this
Agreement with complete understanding of all relevant facts, and that he was
neither fraudulently induced nor coerced to enter into this
Agreement.
7. REPRESENTATIONS. Employee
makes the following representations, each of which is an important consideration
to the Company's willingness to enter into this Agreement with
Employee:
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a. Employee
acknowledges and agrees that the execution, delivery and performance of this
Agreement by the Company (or if Employee elects not to execute this Agreement,
the Company's offer to execute, deliver or perform this Agreement) shall not be
construed as an admission of liability of any kind on the part of, or as
evidence of any unlawful or improper conduct of any kind by, the Company or any
of its officers, directors, employees, agents and shareholders and any and all
such liability and conduct is expressly denied.
b. Employee
is aware that, by signing this Agreement, which includes a release and waiver of
all claims, Employee is giving up any right to xxx the Released Parties in court
for any claims which Employee has or believes to have based upon any event or
circumstances which occurred or existed on or before the date that this
Agreement is signed. Employee also acknowledges that if any charge or
complaint is filed by Employee or on Employee's behalf with an administrative
agency, court or in any other forum, Employee will not seek or accept any
personal relief in such proceedings.
c. Employee
acknowledges that he has not filed any complaints or charges with any court or
administrative agency against the Released Parties on or prior to the date of
signing this Agreement, which have not been dismissed, closed, withdrawn or
otherwise terminated on or prior to the date of this Agreement.
8. TAXES. All amounts
payable hereunder shall be paid net of any tax or other withholding required by
applicable law. Subject to the foregoing, any and all tax liabilities
of Employee incurred as a result of the payments made or benefits provided under
this Agreement shall be the sole responsibility of Employee.
9. MUTUAL NON-DISPARAGEMENT
COVENANT. Employee and the Company agree that they shall not,
at any time, make, directly or indirectly, any oral or written public statements
that are disparaging of, or are intended to disparage, discredit or injure, the
other party, his or its reputation or, with respect to the Company, the products
and services it offers or any of its partners, affiliates, successors, assigns,
including any of its present or former officers, directors, partners, agents, or
employees. For purposes of this Section 9, the "Company" shall
be defined as the Company's Board of Directors and senior officers
only. Employee further agrees that he will not make any statements or
engage in any conduct that would in any manner harm the Company's reputation,
relationships and goodwill with its customers, suppliers, employees and others
having business dealings with the Company.
10. CONFIDENTIALITY; PROPRIETARY
INFORMATION.
a. Employee
acknowledges and understands that this Agreement will be publicly filed in
accordance with applicable law.
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b. Employee
acknowledges that, as a result of his employment with the Company, he has had
access to and knowledge of confidential information of the Company, including,
but not limited to, the identity of the Company's customers, the identity of the
representatives of customers with whom the Company has dealt, the kinds of
services provided by the Company to customers and offered to be performed for
potential customers, the manner in which such services are performed or offered
to be performed, the service needs of actual or prospective customers, pricing
information, information concerning the creation, acquisition or disposition of
products and services, customer maintenance listings, computer software
applications and other programs, personnel information, and other trade secrets
(the "Confidential Information"). Employee acknowledges and agrees
that the direct and indirect disclosure of any such Confidential Information to
existing or potential competitors of the Company would place the Company at a
competitive disadvantage and would do damage, monetary or otherwise, to the
Company's business. Accordingly, Employee agrees that at all times
hereafter, Employee shall not, directly or indirectly, make known, disclose,
furnish, make available or utilize any of the Confidential Information unless he
receives Company’s express written consent, or unless it is required to be
disclosed by a court order, subpoena or other government
process. Employee agrees that, as of the end of the business day on
the Separation Date, he will return to the Company all Confidential Information,
including all photocopies, extracts and summaries thereof, and any such
information stored electronically on tapes, computer disks or in any other
manner.
11. NON-SOLICITATION AND
NON-INTERFERENCE. In exchange for the Consideration provided
pursuant to Section 3(a) above and other covenants and agreements contained
herein, for a period of one (1) year following the Separation Date, Employee
agrees that he will not, directly or indirectly, for the benefit of himself or
any other person, firm or entity, do any of the following: (i)
solicit any customer of the Company on behalf of any company, entity or person
that is engaged in a business that is competitive with the business of the
Company or otherwise induce or attempt to induce any customer of the Company to
cease doing business in whole or in part with the Company; (ii) on behalf of any
company, entity or person that is engaged in a business that is competitive with
the business of the Company solicit any potential
customer of the Company, which has been the subject of a known written or oral
bid, offer or proposal by the Company, or of any known substantial preparation
with a view to making such a bid, proposal or offer, within six (6) months prior
to the Separation Date; or (iii) solicit the employment or services of any
person employed by, or retained as a consultant to, the Company or otherwise
induce or attempt to induce any such person to terminate his or her employment
or consulting relationship with the Company.
12. CONSULTING
OBLIGATION. Employee hereby agrees that, in exchange for the
Consideration provided pursuant to Section 3(a) above, during the Payment
Period, Employee shall consult with the Company on an as-needed basis for no
more than ten (10) hours per week.
13. COOPERATION WITH
LITIGATION. Employee agrees that, if and when requested to do
so by the Company, he will make himself reasonably available to, and
will
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cooperate
in all reasonable respects with, the Company, its officers and directors and
their respective counsel in connection with any litigation, proceeding or
investigation. Upon written request accompanied by appropriate documentation,
the Company agrees to reimburse Employee for any reasonable out-of-pocket
expenses incurred by Employee in connection with any actions taken by Employee
pursuant to this Section 13.
14. DISPUTE
RESOLUTION. The Parties hereby agree that any disagreement,
claim or controversy arising under or in connection with this Agreement or
otherwise relating to Employee's employment with, or termination of employment
from the Company shall be settled exclusively by arbitration before a single
arbitrator in accordance with the Employment Arbitration Rules of the American
Arbitration Association (the "Rules"), provided, that the
arbitrator shall allow for discovery sufficient to adequately arbitrate any
statutory claims, including access to essential documents and witnesses; provided further, that the
Rules shall be modified by the arbitrator to the extent necessary to be
consistent with applicable law. The Parties further agree that
injunctive relief may be sought by either Party pursuant to Section 1281.8 of
the California Code of Civil Procedure. The arbitration shall take
place in Palo Alto, California or at another location agreed to by the
Parties. The award of the arbitrator with respect to such
disagreement, claim or controversy shall be in writing with sufficient
explanation to allow for such meaningful judicial review as permitted by law,
and that such decision shall be enforceable in any court of competent
jurisdiction and shall be binding on the Parties. The remedies
available in arbitration shall be identical to those allowed at
law. The arbitrator shall be entitled to award reasonable attorneys'
fees to the prevailing party in any arbitration or judicial action under this
Agreement, consistent with applicable law. The Company and Employee
each shall pay its or his own attorneys' fees and costs in any such arbitration,
provided that,
the Company shall pay for any costs, including the arbitrator's fee, that
Employee would not have otherwise incurred if the dispute was adjudicated in a
court of law, rather than through arbitration
15. GOVERNING LAW. This
Agreement and all rights, duties and remedies hereunder shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without reference to its choice of law rules.
16. SEVERABILITY. Any
term or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdictions. The Parties agree that all rights and
obligations of the Parties hereunder shall be enforceable to the fullest extent
permitted by law.
17. AMENDMENTS. This
Agreement may not be amended or modified other than by a written instrument
signed by the Company and Employee.
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18. EACH PARTY THE
DRAFTER. This Agreement and the provisions contained in it
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
19. DESCRIPTIVE
HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
20. COUNTERPARTS. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
21. ENTIRE
AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the Parties relating to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of every
kind and nature between the Parties and neither party shall be bound by any term
or condition other than as expressly set forth or provided for in this
Agreement. Employee acknowledges and agrees that in executing this Agreement, he
does not rely, and has not relied upon, any representation or statement of the
Company or any of its officers, directors, agent or employees, not set forth
herein with regard to the subject matter or effect of this Agreement or
otherwise.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth above.
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GENELABS
TECHNOLOGIES, INC.
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EMPLOYEE
|
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_/s/ Xxxxx X.
Chow____________________
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_/s/ Xxxxx A.D.
Smith___________________
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Xxxxx
X. Xxxx
Chairman,
Board of Directors
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Xxxxx
A.D. Xxxxx
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