October 3, 2002
Xxxxxxxx Xxxxx, M.D.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
RE: Separation and Consulting Agreement and General Release
Dear Xxxxxxxx:
This Agreement (the "Agreement") memorializes our understanding
regarding your separation from, and subsequent consulting
services with, AtheroGenics, Inc. (the "Company"). You and the
Company agree to your resignation of your position as Senior Vice
President for Strategic Drug Development, effective as of the end
of business on August 21, 2002 (the "effective date of this
Agreement"), and agree to the following conditions regarding your
separation. You and the Company agree that you will serve for
one year from the effective date of your resignation in a
consulting capacity working on the duties outlined in the
attached exhibit.
Prior to execution of this Separation and Consulting Agreement
and General Release, you should consult with an attorney of your
choice.
Although not obligated under any contracts, policies or
agreements, the Company has offered to provide you with the
following separation and consulting package in conjunction with
your separation. Except as otherwise provided below, all your
salary and benefits from the Company will cease on the effective
date of the separation.
A. You will receive payment for consulting services in the
total amount of $256,760 during the term of this Agreement.
During the term of this consulting arrangement, you will be
paid on a semi-monthly basis over a twelve-month period,
with the payment for the consulting period from August 22,
2002 to the seventh day following your execution of this
Agreement, less any amounts previously paid for such
consulting services, to be mailed to you within two business
days thereafter. You agree that as an independent
contractor, the Company will withhold no applicable state
and federal taxes, nor FICA or similar withholding. You
will receive a Form 1099 for your consulting income.
B. You are eligible to continue your medical insurance coverage
under COBRA. If you elect to do so, the Company will
reimburse you for the applicable premiums paid by you (upon
presentation to the Company of payment receipts therefor or
other satisfactory evidence of payment) during and covering
the term of your consulting arrangement with the Company
under this Agreement up to August 21, 2003, in an amount not
to exceed $570 per month. In addition, you have advised us
that you wish to continue your long term disability
insurance policy for which the Company has been paying the
premiums (Contract No. 008337976; Insurance Company: Mass
Mutual Life Insurance Co., registered in the name of
Xxxxxxxx Xxxxx). You have also advised us that you wish to
pay the premiums for this policy directly. The Company,
upon your execution of this Agreement, will direct its
insurance broker to have forwarded to you all notices,
including premium payment notices, at your address set forth
above, and the Company will have no further responsibility
under this policy. If you continue to pay premiums directly
under this policy, then the Company will reimburse you for
the applicable premiums paid by you (upon delivery to the
Company of payment receipts therefor or other satisfactory
evidence of payment) during and covering the term of your
consulting arrangement with the Company under this Agreement
up to August 21, 2003, in an amount not to exceed $443 per
month. Notwithstanding the foregoing, to the extent the
Company has previously paid monthly premiums for either such
medical or disability policy for your benefit following the
effective date of this Agreement and prior to your execution
of this Agreement, then the Company will forward to you a
Form 1099 reflecting these payments.
C. The Company will allow the vesting schedule for the stock
options previously granted to you to continue during the
term of your consulting arrangement. Pursuant to the terms
of the AtheroGenics' 1997 Equity Ownership Plan and 2001
Equity Ownership Plan, you must exercise these options
within 30 days following the termination of your consulting
agreement, or they will expire. No options will vest
following the termination of your consulting arrangement.
D. Please be advised that, per the Company's standard practice,
any outstanding expenses owed by you to the Company, whether
they are credit card expenses, travel advances, salary
draws, etc., will be withheld from all monies due to you at
the time of your separation or under this Agreement.
E. In the event that any prospective employer contacts the
Company for employment information or for a recommendation,
subject to your written request for broader disclosure, the
Company will provide the prospective employer only with the
dates of employment and nature of the position held by you
with the Company.
F. Your loan from the Company, totaling $200,000 plus interest
will be due and payable on or before October 11, 2002. This
may be accomplished by a broker's cashless transaction,
whereby the Company will use the appropriate number of
collateralized shares to payoff the loan and return to you
the remaining shares.
G. The Company knowingly and voluntarily agrees to waive and
release you from any and all claims, losses, liabilities,
obligations and causes of action, known or unknown, arising
out of, in any way connected with or relating to your
employment or termination of employment with the Company,
with the exception of any claim of embezzlement, fraud, or
other intentional misconduct against the Company which may
be discovered after the execution of this Agreement.
In consideration for the severance and consulting package
outlined herein, you agree to the following:
1. In exchange for the benefits and payments extended to
you by the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, you knowingly and voluntarily
agree to waive and release the Company and its
officers, directors and employees from any and all
claims, losses, liabilities, obligations and causes of
action, known or unknown, arising out of, in any way
connected with or relating to your employment or
termination of employment with the Company including,
but not limited to, (a) claims for compensation, wages,
bonuses and benefits, breach of contract, impairment of
economic opportunity, intentional infliction of
emotional distress, wrongful discharge, defamation, or
any other tort or personal injury, or (b) claims
arising under any municipal, state or federal statute,
regulation or ordinance relating to employment or the
foregoing, including but not limited to Title VII of
the Civil Rights Act of 1964, Equal Pay Act, 42 U.S.C.
1981, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the Family and
Medical Leave Act, and the Employee Retirement Income
Security Act. You understand and agree that by signing
this Agreement, you are giving up any right which you
may have under federal law or the laws of any state or
municipality to file, and are hereby covenanting not to
file, complaints or lawsuits or to assert any claim
against the Company or any of its officers, directors
and employees with any court or administrative agency
concerning any events related to your employment or
termination of employment with the Company. This
release extinguishes any potential claims of employment
discrimination arising from your employment with and
termination from the Company existing on the date of
execution of this Agreement.
You acknowledge that you have had the opportunity to
review this Agreement and to consult an advisor or
attorney of your choice before signing this Agreement
after you were given a copy of this Agreement. You
further acknowledge that you understand this Agreement
and entered into and signed this Agreement knowingly,
voluntarily and with such consultation with such
advisor or attorney as you deemed to be appropriate.
2. Upon the effective date of your separation, August 21,
2002, you immediately ceased all employment activities
and returned to the Company all of its records,
correspondence and documents in your possession, except
those that are necessary to perform your consulting
arrangement. Following termination of your consulting
arrangement, you will immediately return to the Company
all of its records, correspondence and documents in
your possession. The Company acknowledges that you are
not obligated to return strictly personal files that do
not contain Company property or confidential
information now in your possession that were at one
time stored at your offices. As of August 21, 2002,
you also returned to the Company all property of the
Company including, keys, corporate credit cards, air
travel cards, laptop or other computers and other
office equipment and supplies.
3. The terms of this Agreement will be treated as
confidential by you and will not be disclosed by you to
anyone except your attorney, spouse (who previously has
agreed in writing to hold confidentially information of
the type described in this Agreement), accountant, tax
advisor, or except as may be required by law or agreed
to in writing by the Company. You agree to notify your
attorney, spouse, accountant and tax advisor of the
confidential nature of this Agreement.
4. For a period of five years from the effective date of
this Agreement, you agree to refrain from making any
derogatory or disparaging statements to any person or
entity regarding the Company, its management, its
products or services. This provision shall not
prohibit you from responding truthfully to a subpoena
or an inquiry from a governmental agency or as
otherwise required by law.
5. At the Company's request, you will use all reasonable
efforts to cooperate with the Company in any present or
future claims or lawsuits involving the Company where
you have knowledge of the underlying facts. For the
time you spend working on any claims or lawsuits at the
request of the Company after other payments under this
Agreement cease, you will be reimbursed at the
equivalent rate per hour at which you were being
compensated by the Company immediately prior to your
separation; provided however that if you are a named
party in any claim or lawsuit, you will not be entitled
to such compensation. In addition, you will not
voluntarily aid, assist, or cooperate with any
claimants or plaintiffs or their attorneys or agents in
any claims or lawsuits commenced in the future against
the Company; provided, however, that nothing in this
Agreement will be construed to prevent you from
testifying at an administrative hearing, a deposition,
or in court in response to a lawful subpoena in any
litigation or proceedings involving the Company.
6. This Agreement shall not in any way be construed as an
admission of liability by the Company or you or as an
admission that the Company has acted wrongfully with
respect to you. The Company specifically denies and
disclaims any such liability or wrongful acts.
7. This Agreement sets forth our entire agreement and
fully supersedes any prior agreements or understandings
between you and the Company, with exception of the
AtheroGenics, Inc. Patent, Copyright and Nondisclosure
Agreement dated December 18, 1997 previously executed
by you, which remains in full force and effect. You
acknowledge that in executing this Agreement you did
not rely and have not relied on any representation or
statement made by the Company or by any employee, agent
or representative of the Company, with regard to the
subject matter, basis or effect of this Agreement or
otherwise, other than those specifically stated in this
Agreement. This Agreement shall be governed by Georgia
law. In the event that any provision of this Agreement
should be held to be unenforceable, void or voidable,
all the remaining provisions hereof shall remain in
full force and effect.
8. This Agreement shall be binding on you and your heirs,
representatives and assigns and shall inure to the
benefit of the Company and its successors and assigns.
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and together which shall
constitute one and the same instrument.
You acknowledge you have had more than 21 days from your receipt
of this letter within which to consider whether you should accept
the terms of this letter. You also have seven (7) days from your
execution of this Agreement to revoke this Agreement by
delivering notice of your revocation to Xxxxxxx X. Xxxxxxx, M.D.,
Ph.D., President and Chief Executive Officer at the Company's
offices. Accordingly, the terms of this Agreement will not be
effective until seven (7) days after your execution of this
Agreement.
If this letter accurately reflects your understanding and
agreement, please sign the original and copy and return the
original to the Company. The copy is for your files. The signed
original must be returned to me no later than October 3, 2002 or
the offer will be considered withdrawn.
Sincerely,
ATHEROGENICS, INC.
/s/ Xxxxxxx X. Xxxxxxx
By: Xxxxxxx X. Xxxxxxx, M.D., Ph.D.
Its: President and Chief Executive Officer
I have read and hereby agree to the foregoing Agreement. I
hereby accept and agree to all of the terms, conditions and
provisions of the foregoing Agreement.
This 3rd day of October, 2002.
/s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, M.D.
A copy of this letter was originally given to Xxxxxxxx Xxxxx,
M.D. on August 15, 2002.
Exhibit
Consulting Arrangement
As an integral part of your Separation and Consulting Agreement
and General Release, you have agreed to serve as an independent
consultant to AtheroGenics, Inc. ("AGI") for one year, beginning
August 22, 2002 and terminating on August 21, 2003. During this
time, AGI expects you to be available to the President and Chief
Executive Officer or his designees to provide continuity in the
Company's preparation for and dealings with the FDA and other
regulatory agencies and to provide drug development advice. You
will be expected to spend up to and including 6 full work days
per month to formally meet/consult with AGI's appointed
representatives and perform services for AGI. This would include
occasional meetings in Atlanta or elsewhere, and telephone
conferences. AGI and you will mutually agree to this consulting
schedule in advance.
AGI will reimburse you for reasonable expenses incurred in
connection with carrying out your consulting duties.
Documentation for expenditures will be required consistent with
the AGI expense reimbursement policy.
In connection with your consulting arrangement with AGI, you have
agreed to comply with the post-employment related terms of the
Patent, Copyright and Nondisclosure Agreement, signed on December
18, 1997, the terms of which are incorporated herein by
reference.
Upon termination of this agreement, or at any time we so request,
you agree to return all papers, records, and other documents,
including those documents set forth in the attached Patent,
Copyright and Nondisclosure Agreement, which AGI may furnish or
make available to you.
