Exhibit 10.1
SEVERANCE AGREEMENT,
RELEASE AND COVENANT NOT TO XXX
THIS SEVERANCE AGREEMENT, RELEASE AND COVENANT NOT TO XXX (the "Release")
is entered into by and between Xxxxxx X. Xxxxx, Ph.D. (the "Employee") and GENTA
INCORPORATED, a Delaware corporation (the "Company").
WHEREAS, the Employee is an employee and officer of the Company, and is
terminating his employment and status as an officer and director effective May
5, 1997; and
WHEREAS, the Employee desires to fully release and discharge all potential
disputes and claims related to his employment with the Company or the
termination thereof and to dispose of all other claims as provided in this
Release, thereby finally disposing of such claims, and to give assurance that he
will not thereafter prosecute such claims or cause them to be prosecuted;
NOW, THEREFORE, it is agreed as follows:
1. Release. The Employee hereby releases and forever discharges the Company
and each of its past and present directors, officers, shareholders, employees,
agents, attorneys, servants, employee benefit plans, predecessors, successors
and assigns, and each of them separately and collectively (hereinafter referred
to separately and collectively as the "Releases") from any and all claims,
liens, demands, causes of action, obligations, damages and liabilities of any
nature whatsoever, known or unknown, that the Employee ever had, now has or may
hereafter claim to have against any of the Releases relating to his employment
or nonemployment by the Company, to the termination of his employment, to any
status, term or condition to such employment, or to any physical or mental harm
or distress from such employment or from termination of such employment,
excluding any claims relating to the enforcement of the terms of this Release
but including, without limitation, (a) any and all claims under the federal Age
Discrimination in Employment Act; (b) any and all claims under California
statutory or decisional law pertaining to wrongful discharge, discrimination or
breach of public policy; (c) any and all claims for employee benefits, including
(without limitation) severance payments, fringe benefits, vacation or disability
payments, use of maintenance of an automobile, retirement benefits, bonuses and
equity-based benefits; and (d) any and all claims relating to the tax obligation
for which the Employee may become liable as a result of this Release or the
payment of consideration referred to above.
2. Definition of Continuation Period. For all purposes under this Release,
"Continuation Period" shall mean the period commencing on May 6, 1997, and
ending on the earlier of:
(a) May 5, 1998;
(b) The date Employee obtains other employment or is reemployed by the
Company; or
(c) The date of the Employee's death.
3. Amount of Special Severance Pay. During the Continuation Period, the
Company shall pay the Employee Special Severance Pay at an annual rate equal to
his base salary at the rate in effect on May 5, 1997. Such amount shall be paid
at periodic intervals in accordance with the Company's standard payroll
procedures, subject to applicable payroll deductions for withholding taxes and
any required employee payments for employee benefits. Employee promises to
inform the Company as soon as he obtains other employment, if he obtains such
employment prior to May 5, 1998.
In the event of the Employee's death prior to May 5, 1998, the Company
shall continue to make the above-described periodic payments to Employee's
beneficiary (at the rate in effect on May 5, 1997) for the period from the date
of his death to May 5, 1998. The Employee may designate a beneficiary in writing
for this purpose. If no beneficiary so designated survives the Employee, then
the payments shall be made to the Employee's estate. These periodic payments
shall be subject to applicable payroll deductions for withholding taxes.
4. Employee Benefits and Group Insurance. During the Continuation Period,
the Employee (and, where applicable, his dependents) shall be entitled to
continue participation in the group insurance plains maintained by the Company,
including life, disability, medical and dental insurance programs, on the same
basis as Employee participated in these programs prior to May 5, 1997. Where
applicable, the Employee's salary for purposes of such plans shall be deemed to
be equal to this base salary at the rate in effect on May 5, 1997. The foregoing
notwithstanding, in the event that the Employee becomes eligible for comparable
group insurance coverage in connection with new employment, the group insurance
coverage provided by the Company under this Section 4 shall terminate
immediately.
To the extent that the Company finds it impossible to cover the Employee
under a group insurance policy during the Continuation Period, the Company may
require Employee to elect to continue his group medical and dental coverage
under COBRA. To the extent such election is necessary, the Company will pay the
full cost under COBRA to continue Employee's group medical and dental benefits
in accordance with the terms of this Agreement. Thereafter, Employee must pay
the applicable COBRA premiums for such coverage for any remaining COBRA period.
If the Company finds it impossible to provide Employee with group life and
disability coverage during the Continuation Period, it shall use its best
efforts to provide Employee with individual life and disability insurance
policies that (a) offer coverage comparable to the group coverage Employee
received prior to May 5, 1997; and (b) do not impose costs or administrative
burdens on the Company substantially in excess of its costs and administrative
burdens for the group coverage. If the Company is able to provide Employee with
individual
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coverage consistent with these requirements, it shall pay the entire premium
under such individual policy.
5. Stock Plan.
The Continuation Period shall be treated as employment for purposes of
determining the Employee's vesting in any Incentive Stock Options (ISO's)
granted to him under the 1991 Stock Plan of Genta Incorporated. Any "cliff"
vesting requirement imposed in connection with the Company's repricing of
options is waived in the Employee's case, and the vested percentage of the
Employee's options shall be determined without regard to such requirement.
The 90-day post-termination exercise grace period under the Employee's
Incentive Stock Options shall commence at the end of the Continuation Period.
The Employee represents that he has consulted or will consult a tax adviser
regarding the impact of this Section 5 on the tax treatment of Incentive Stock
Options.
6. Bonus. The Employee shall not be entitled to any bonus including,
without limitation, for the fiscal year ending December 31, 1997.
7. Expense Reimbursement. By signing this Release, the Employee
acknowledges that the Company has fully discharged all of its obligations to
reimburse him for any business expenses.
8. Waiver. The Employee expressly waives all rights under section 1542 of
the Civil Code of California, which provides:
"A 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 HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Employee acknowledges that this General Release is intended to include and
discharge all claims which he does not know or suspect to exist at the time of
execution and expressly assumes all risks attendant to release of claims arising
out of facts occurring at any time prior to the execution of this Agreement
which are unknown, unforeseen or latent.
9. Covenant Not To Xxx. The Employee covenants and agrees that he will
never, individually or with any person or in any way, commence, aid in any way
(except as required by legal process), prosecute or cause or permit to be
commenced or prosecuted against any of the Releases any action or other
proceeding based upon any claim which relates to the
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subject of this Release, Employee's employment with the Company or his
separation from employment. This Release shall be deemed breached and a cause of
action shall be deemed to have accrued immediately upon the commencement or
prosecution of any action or proceeding contrary to this Release. In the event
of a breach of this Release, Employee shall not receive any further severance
payments or insurance continuation, and shall immediately repay and reimburse
the Company for all separation benefits and insurance coverage previously
received under this Agreement.
In the event of any breach of this Section 9, the aggrieved Releasee shall
be entitled to recover from the Employee not only the amount of judgment which
may be awarded against such Releasee, but also all such other damages, costs and
expenses as may be incurred by such Releasee, including court costs, attorneys'
fees and all costs and expenses, taxable or otherwise, in preparing the defense
of or defending against, or seeking or obtaining an abatement of or injunction
against, any action or proceeding brought in violation of this Section 9 and in
prosecuting any claim, counterclaim or cross-claim based hereon.
10. No Assignment; Authority. The Employee represents and warrants that no
other person had or has or claims any interest in the claims referred to in
Section 1 above; that he has the sole right and exclusive authority to execute
this Release; that he has the sole right to receive the consideration paid
therefor; and that he has not sold, assigned, transferred, conveyed or otherwise
disposed of any claim or demand relating to any matter covered by this Release.
11. No Admission. The Employee acknowledges that the payment of
consideration, referred to herein, is made solely for the purpose of purchasing
peace and preventing involvement in protracted litigation based upon claims that
he could make and does not constitute an admission or concession by any of the
Releasees of any liability on account of any of said claims, liability for which
is expressly denied by the Releasees.
12. Confidentiality. The Employee covenants and agrees that confidentiality
of the payments to be made hereunder, the existence and terms of this Release,
and the circumstances leading to Employee's separation from employment is of
essence. The Employee agrees to maintain the confidentiality of the existence
and terms of this Release and the circumstances leading to it, and to make no
voluntary statement except as may be necessary for the purposes of audit, tax
returns or other disclosures required by law, and to take no other action
whatsoever which might reasonably be expected to result in any disclosure
whatever concerning this Release. The only exception to the foregoing is that
Employee may disclose such information to his spouse, tax adviser or legal
counsel, but if he does so, he must advice all such individuals of this
confidentiality provision and advise them that they too must comply with it.
Employee understands and acknowledges that any breach of this confidentiality
provision caused by a disclosure made by his spouse, legal counsel and/or tax
adviser will be considered to be a breach of this confidentiality provision by
him. Employee acknowledges that this confidentiality provision is a material
term of this Release
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Agreement and that damages for a breach of this confidentiality provision
would be impossible to ascertain. Therefore, if Employee breaches this
confidentiality provision, he promises to return to the Company all sums paid to
him pursuant to this Release Agreement, within ten (10) days, plus liquidated
damages thereon (calculated at 20 percent interest) from the date of receipt of
such amount.
13. Continued Confidentiality. The Employee acknowledges that the Company
possesses and will continue to possess information that has been created,
discovered, developed or otherwise become known to the Company (including,
without limitation, information created, discovered, developed or made known by
the Employee during the period of or arising out of his employment by the
Company) or in which property rights have been assigned or otherwise conveyed to
the Company, which information has commercial value in the business in which the
Company is engaged. All such information is hereinafter called "Proprietary
Information." By way of illustration, but not limitation, Proprietary
Information includes processes, formulas, codes, data, programs, know-how,
improvements, discoveries, developments, designs inventions, techniques,
marketing plans, strategies, forecasts, new products, unpublished financial
statements, budgets, projections, licenses, prices, costs, contracts and
customer and supplier lists.
In consideration of the compensation received by the Employee from the
Company and the covenants contained in this Release, the Employee agrees as
follows:
A. All Proprietary Information is and shall continue to be the sole
property of the Company and its assigns, and the Company and its assigns
are and shall continue to be sole owner of all rights in connection
therewith. The Employee will keep in strictest confidence and trust all
Proprietary Information and will not use or disclose any Proprietary
Information without the written consent of the Company.
B. All documents, records, equipment and other physical property,
whether or not pertaining to Proprietary Information, furnished to the
Employee by the Company or produced by the Employee or others in connection
with his employment with the Company and shall be and remain the sole
property of the Company. The Employee has returned to the Company all
documents, notes, drawings, specifications, programs, data, customer lists
and other materials of any nature pertaining to his work with the Company,
including any copies of such materials, and the Employee will not use any
of the foregoing, any reproduction of any of the foregoing, or any
Proprietary Information that is embodied in a tangible medium of
expression.
This Section 13 supplements, but does not supersede, any prior agreement
between the Employee and the Company relating to proprietary information,
confidentiality of trade secrets or inventions.
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14. Non-disparagement. Employee promises not to make any written or oral
statements, whether or not true, that disparage the Company or its reputation or
work product, or any of its employees, agents, representatives, officers,
directors or shareholders.
15. Binding Effect. This Release shall bind all of Employee's heirs,
executors, administrators, successors and assigns; and it shall inure to the
benefit of each Releasee and, in addition, all heirs, executors, administrators
and assigns of each Releasee who is an individual.
16. Older Workers' Benefit Protection Act. The Employee acknowledges that
he is aware that under the Older Workers' Benefit Protection Act, he has
forty-five (45) calendar days to decide whether to enter into this Release. The
Employee agrees that he was allowed forty-five (45) calendar days to consider
this Release.
The Employee further acknowledges that he is aware that under the Older
Workers' Benefit Protection Act he may revoke this Release within seven (7)
calendar days after it is signed. He further agrees that this Release shall not
be effective or enforceable until after this revocation period has expired and
that he is aware that in the event he timely exercises his right or rescission
he will have no rights under this Release.
17. Withholding Taxes. The Employee warrants that no promise, inducement or
agreement not expressed herein has been made in connection with this Release;
that this Release constitutes the entire agreement between the Employee and the
Company (except as provided in Section 13 above); and that this Release cancels
and supersedes all prior communications or understandings between the Company
and the Employee with respect to the subject matter of this Release (except as
provided in Section 13 above).
18. Governing Law. This Release shall be construed and enforced pursuant to
the laws of the State of California.
19. Attorneys' Fees. In the event of any dispute relating to the terms of
this Release, the losing party shall pay the reasonable attorneys' fees and
costs of the other party.
The Employee acknowledges and agrees that he has had the opportunity to
seek advice from an attorney with respect to the matters which are the subject
of this Release. The Employee has entered it this Release freely and
voluntarily. All executed copies are duplicate originals, equally admissible in
evidence. This Release may only be varied or modified by a written document
executed by the Employee and the Company.
Dated: ________________, 1998 ____________________________
Xxxxxx X. Xxxxx, Ph.D.
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GENTA INCORPORATED
Dated: ________________, 1998 By: ____________________________
Title: __________________________
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DESIGNATION OF BENEFICIARY
I understand that whatever Separation Benefits are due me shall be paid in the
Company's sole discretion in the form of salary continuation. In case of my
death after I become entitled to such payment, such amounts remaining due to me
will be paid to my beneficiary as indicated below. I understand that I may
revoke this Agreement up to seven days after I have signed it and that the
Release will not be effective until the eighth day following the date I signed
it.
Name of Beneficiary Relationship
___________________________________ _________________________________
Home Address of Beneficiary Beneficiary's Social Security Number
___________________________________ _________________________________
___________________________________
If the employee is married and the beneficiary named above is someone other than
the employee's spouse, the spouse must sign below indicating consent to the
designated beneficiary.
Signature of Spouse Date
___________________________________ _________________________________
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