SEPARATION AGREEMENT AND RELEASE
Exhibit 10.3
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (“Agreement”) is made by and between Xxxx Xxxxxx-Xxxxxxxxx (“Employee”) and Xxxxxx Scientific, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).
RECITALS
WHEREAS, Employee was employed by the Company;
WHEREAS, Employee began serving as the Company’s Chief Executive Officer (“CEO”) on October 31, 2012 and signed an At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement with the Company on November 11, 2013 (the “Confidentiality Agreement”);
WHEREAS, the Company and Employee have entered into a stock option agreement or agreements granting Employee the option to purchase shares of the Company’s common stock (the “Employee Options”) subject to the terms and conditions of the Company’s 2014 Stock Incentive Plan (collectively with the Employee Options, the “Stock Agreements”);
WHEREAS, the Employee had purchased warrants from the Company and the Company has issued warrants to acquire 16,875 shares of the Company’s common stock at an exercise price of $4.00 per share (the “CEO Warrants”), which CEO Warrants expire July 31, 2023;
WHEREAS, on January 28, 2023 the Company agreed by unanimous written consent of the board of directors to repurchase of the CEO Warrants, at such date to be mutually agreed between the Company and Xx. Xxxxxx-Xxxxxxxxx prior to the expiration of the CEO Warrants, at a price equal to the fair market value of the CEO Warrants by reference to the closing price per share of the underlying shares on the day of sale and taking into account the exercise price payable for such shares;
WHEREAS, the Employee had purchased warrants from the Company and the Company has issued warrants to acquire 60,000 shares of the Company’s common stock at an exercise price of $4.50 per share (the “Other Warrants”), which Other Warrants expire July 31, 2023;
WHEREAS, Employee voluntarily resigned from Employee’s employment with the Company effective May 1, 2023 (the “Termination Date”);
WHEREAS, Employee is not required to enter into this Agreement to remain employed through May 1, 2023;
WHEREAS, Employee voluntarily resigned from employment as the Company’s CEO and President as of April 2, 2023 and will remain as a non-CEO employee through May 1, 2023, receiving his same monthly base salary of $37,500 for the month of April 2, 2023 through May 1, 2023;
WHEREAS, Employee will remain in his role on the Company’s Board of Directors (the “Board”), as a non-employee director and be entitled to receive compensation as a non-employee Board member on the same terms as the other non-employee members of the Board, including, but not limited to, the remainder of his current term as a Class III Director, which ends upon the Company’s annual meeting of stockholders in 2024; and
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company.
NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:
COVENANTS
Employee agrees that the release set forth in this section will be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement. This release does not release claims that cannot be released as a matter of law, including but not limited to any rights Employee may have to benefits and/or the right to seek benefits under applicable unemployment compensation statutes.
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Employee, being aware of said code section, agrees to expressly waive any rights Employee may have thereunder, as well as under any other statute or common law principles of similar effect.
Any arbitration will occur in the county in which the Employee last worked for the Company before JAMS, pursuant to its Employment Arbitration Rules & Procedures (“JAMS Rules”), except as expressly provided in this section. The Parties agree that the arbitrator will have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication, and motions to dismiss and to strike, applying the standards set forth under the Federal Rules of Civil Procedure. The Parties agree that the arbitrator will issue a written decision on the merits. The Parties also agree that the arbitrator will have the power to award any remedies available under applicable law, and that the arbitrator may award attorneys’ fees and costs to the prevailing party, where permitted by applicable law. The arbitrator may grant injunctions and other relief in such disputes. The decision of the arbitrator will be final, conclusive, and binding on the parties to the arbitration. The Parties agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The parties to the arbitration will each pay an equal share of the costs and expenses of such arbitration, and each party will separately pay for its respective counsel fees and expenses; provided, however, that the arbitrator may award attorneys’ fees and costs to the prevailing party, except as prohibited by law. The Parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. Notwithstanding the foregoing, this section will not prevent either Party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of
their dispute relating to this Agreement and the Agreements incorporated herein by reference. Should any part of the arbitration agreement contained in this section conflict with any other arbitration agreement between the Parties, the Parties agree that, following the Termination Date, this arbitration agreement in this section will govern.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.
XXXXXXX XXXXXX-XXXXXXXXX, an individual
Dated: 4/1, 2023/s/ Xxxxxxx Xxxxxx-Xxxxxxxxx
Xxxxxxx Xxxxxx-Xxxxxxxxx
XXXXXX SCIENTIFIC, INC.
Dated: 4/1, 2023By /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
Director
EXHIBIT A
WARRANT REPURCHASE AGREEMENT
This WARRANT REPURCHASE AGREEMENT (this “Agreement”) is made as of 2023, by and between Xxxxxx Scientific, Inc., a Delaware corporation (the “Company”), and the undersigned holder of warrants to purchase shares of the Company’s capital stock (the “Warrantholder,” and together with the Company, the “Parties”).
WHEREAS, the Employee had purchased warrants from the Company and the Company has issued warrants to acquire 16,875 shares of the Company’s common stock at an exercise price of $4.00 per share, which expire July 31, 2023;
WHEREAS, on January 28, 2023 the Company agreed by unanimous written consent of the board of directors to repurchase of these warrants, at such date to be mutually agreed between the Company and Employee prior to the expiration at a price equal to the fair market value of the warrants by reference to the closing price per share of the underlying shares on the day of sale and taking into account the exercise price payable for such shares; and
WHEREAS, the Warrantholder wishes to sell to the Company and the Company wishes to purchase from the Warrantholder certain of the Warrants, as indicated on Schedule A hereto on the terms set forth herein, such repurchased Warrants, the “Repurchase Warrants.”
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual provisions set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
0.Xxxx and Purchase of Repurchase Warrants. Subject to the terms and conditions hereof, at the Closing (as defined in Section 2 below), the Warrantholder hereby agrees to sell to the Company, and the Company hereby agrees to purchase from the Warrantholder, the Repurchase Warrants. The Company and the Warrantholder hereby irrevocably acknowledge and agree that, upon the sale of the Repurchase Warrants, the Warrantholder shall be entitled to receive an amount equal to the excess of the aggregate fair market value of the Repurchase Warrants over the aggregate exercise price of the Repurchase Warrants (such payments collectively, the “Purchase Price”), as specified on Schedule A hereto, subject to the Company’s collection of all applicable withholding taxes, if applicable.
2.Closing Date. The closing of the sale and purchase of the Warrants under this Agreement (the “Closing”) shall take place at such place and time as the Company and the Warrantholder may mutually agree as long as such date is prior to the Expiration of the Repurchase Warrants (such date is hereinafter referred to as the “Closing Date”).
0.Xxxxxxxx. At the Closing, subject to the terms and conditions hereof, the Company will deliver to the Warrantholder the Purchase Price by wire of immediately available funds to the Warrantholder and the Warrantholder shall deliver the originally executed Warrants duly endorsed for transfer. Upon payment of the Purchase Price, the Repurchase Warrants, without further action by the Company or by the Warrantholder, shall be cancelled, terminated in
full and rendered null and void and provide no further rights to acquire shares of the Company’s Common Stock.
4.Further Representations and Warranties. The Warrantholder hereby further represents and warrants as follows:
(a)The Warrantholder is duly organized and validly existing under the laws of the jurisdiction of its organization.
(b)The Warrantholder has full right, power and authority to sign this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by the Warrantholder and constitutes the valid and legally binding obligation of the Warrantholder enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity. All consents, judgments, authorizations and orders necessary for the execution and delivery by the Warrantholder of this Agreement have been obtained, and the Warrantholder need not give any notice to, make any filing with, or obtain any consent, judgment or approval of any governmental authority or any other person in order to consummate the transactions contemplated by this Agreement.
(c)The execution and delivery of this Agreement by the Warrantholder does not, the consummation of the transactions contemplated by this Agreement will not, and the performance of this Agreement by the Warrantholder will not conflict with or violate any law, judgment, proceeding or other restriction of any governmental authority or court applicable to the Warrantholder or by which the Warrantholder or any of the Warrantholder’s properties or assets is or may be bound or affected, or Warrantholder’s organizational documents.
(d)The Warrantholder has good and marketable title to the Warrants, free and clear of all encumbrances, and the transactions contemplated by this Agreement will not result in the imposition of any encumbrances or other obligations, such Warrants are not subject to any adverse claim, and such Warrants are not subject to any claims for brokerage commissions, finders’ fees or similar compensation, or any community property rights.
(e)At the Closing, all of the Warrantholder’s right, title and interest in and to the Repurchase Warrants shall terminate and the Warrantholder thereafter relinquishes and waives any and all rights and benefits it previously had with respect to the Repurchase Warrants, except for the right to receive the Purchase Price for the Repurchase Warrants in accordance with the terms of this Agreement.
(f)The Warrantholder acknowledges and agrees that the Warrantholder is delivering this Agreement in the Warrantholder’s own free will and not under any duress or undue influence and that the Warrantholder has had a reasonable opportunity to ask all reasonable questions and receive all answers from the Company concerning the terms and conditions of this Agreement as the Warrantholder has requested.
0.Xxx Treatment. The Warrantholder hereby acknowledges that no representations have been made with respect to the tax treatment of any consideration that may be received pursuant to the terms of this Agreement. The Warrantholder acknowledges and agrees that any taxes that may be owed by the Warrantholder with respect to such consideration, including but not limited to any taxes, interest or penalties that may be owed pursuant to Section 409A of the
Internal Revenue Code of 1986, as amended, shall be the sole responsibility of the Warrantholder.
6.Additional Documents. The Warrantholder hereby agrees that he, she or it will, upon request of the Company, execute and deliver any additional documents reasonably appropriate or necessary in connection with the transactions contemplated by this Agreement.
7.Governing Law; Jurisdiction. This Agreement, the rights of the parties hereunder and all actions arising in whole or in part under or in connection herewith, will be governed by and construed and enforced in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. Each of the parties hereto hereby (i) irrevocably submits to the exclusive jurisdiction of the U.S. District Court located in the State of Delaware and the state courts of the State of Delaware for the purpose of any action among any of the parties relating to or arising in whole or in part under or in connection with this Agreement, (ii) waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other action in any other court other than one of the above-named courts or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (iii) agrees not to commence any such action other than before one of the above-named courts.
8.Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION WHATSOEVER BETWEEN OR AMONG THEM RELATING TO THIS AGREEMENT AND THAT SUCH ACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
9.Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, each Party
intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
10.Specific Performance. Notwithstanding anything in this Agreement to the contrary, the parties agree that irreparable damage could occur in the event that any of the obligations, undertakings, covenants or agreements contained in this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement, without any bond or other security being required, and to enforce specifically the terms and provisions of this Agreement by a decree of specific performance without the necessity of proving the inadequacy of money damages as a remedy, this being in addition to any other remedy to which the parties are entitled at law or in equity.
11.Entire Agreement; Amendment. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with respect thereto. This Agreement may not be amended except by an instrument in writing signed by the Warrantholder and the Company.
12.Counterparts and Facsimile Transmission. This Agreement may be executed in two or more counterparts for the convenience of the parties hereto, each of which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be effective as delivery of a manually executed counterpart to this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the latest date specified below.
XXXXXX SCIENTIFIC, INC.
By:
Name:
Title:
Date:
WARRANTHOLDER
Xxxxxx-Xxxxxxxxx Family Trust U/D/T dated January 13,1997
By:
Name:
Title:
Date:
Schedule A
Issuance & | Underlying Common Stock | Exercise | Aggregate Fair Market Value | Aggregate | Aggregate Repurchase Price |
6/7/12 - 7/31/23 | 16,875 | $4.00 | $[•] | $67,500.00 | $[•] |
EXHIBIT B
OUTSTANDING OPTIONS
Grant Date | Expiration | Exercise | Vested | Unvested |
11/08/2014 | 11/08/2024 | 2.10 | 71,000 | 0 |
01/01/2015 | 12/31/2024 | 1.96 | 75,000 | 0 |
10/29/2015 | 10/28/2025 | 3.44 | 180,000 | 0 |
12/31/2015 | 12/31/2025 | 2.56 | 60,000 | 0 |
02/18/2016 | 2/17/2026 | 2.23 | 125,000 | 0 |
01/20/2017 | 01/19/2027 | 1.72 | 125,000 | 0 |
01/01/2018 | 12/31/2027 | 8.00 | 125,000 | 0 |