DEPARTURE AGREEMENT AND GENERAL RELEASE
This
DEPARTURE AGREEMENT AND GENERAL RELEASE (“Agreement”) is made by and between
▇▇▇▇▇▇ ▇▇▇▇ (“Employee”) and RxElite, Inc. (“Company”), effective this 14th day
of December, 2007 (“Effective Date”).
WHEREAS,
Employee was employed by Company, pursuant to a Second Amended and Restated
Employment Agreement made as of November 27, 2006; and
WHEREAS,
Employee and Company have agreed to the termination of the employment
relationship between them; and
WHEREAS,
Employee and Company have agreed that although the Second Amended and Restated
Employment Agreement has been terminated, Employee will continue to provide
consulting services to Company on an at-will basis in the area of Asian Investor
Relations; and
WHEREAS,
Employee and Company wish to settle fully and finally any and all differences
or
disputes between them arising out of Employee’s employment with Company, the
termination of the Second Amended and Restated Employment Agreement, and/or
any
and all other transactions, occurrences or events that have occurred to
date.
NOW,
THEREFORE, in consideration of their mutual promises and agreements expressed
herein, the sufficiency of which consideration each party hereby acknowledges,
the Parties agree as follows:
1. Payments
to Employee.
1.1 Departure
Payments and/or Other Consideration.
Upon
satisfaction of the conditions set forth in Subsection 1.3 of this
Agreement, Company shall:
(a) pay
to
Employee a monetary amount equal to Employee’s periodic regular base salary
(which the parties agree is annually Two Hundred Fifty Thousand dollars
($250,000) (a “Departure Payment”) on each on Company’s regularly scheduled
paydays (and in any event not less frequently than monthly), up to and including
the 31st day of December, 2010 (the “Final Payment Date”); and
(b) pay
to
Employee the sum of One Hundred Twenty Five Thousand dollars ($125,000), which
sum represents the bonus earned pursuant to the 2007 Bonus Targets established
on or about June 26, 2007, such sum to be paid to Employee on or before January
31, 2008; and
(c) pay
to
Employee the sum of Twenty Thousand Eight Hundred Thirty Three Dollars and
33/100 ($20,833.33), which amount is equal to four (4) weeks salary, and is
intended to compensate Employee for accrued and unused vacation and/or sick
days, such sum to be paid to Employee on or before January 31, 2008;
and
(d)
continue
to pay on behalf of Employee and his family medical and dental insurance
premiums (as may be established from time to time by the Company with such
carriers) and to continue coverage for Employee and his family (on the same
basis as he would have been entitled had he continued to be employed as Chief
Executive Officer and Chair of the Board) through December 31, 2010;
and
(e) through
December 31, 2010, continue to pay a monthly cash payment of $265 which amount
is equal to the monthly premium payment on a universal variable life insurance
policy; and
(f) pay
to
Employee a sum up to, but not exceeding, Ten Thousand Dollars ($10,000), for
documented legal fees relating to his departure from the Company. A written
statement by Employee’s attorney stating that Employee has incurred more than
ten thousand dollars in legal fees related to his departure from the Company
shall satisfy the documentation requirement of this paragraph; and
(g) Employee
shall promptly submit an expense report detailing all unpaid expenses incurred
through the date of this Agreement and the Company agrees to pay all reasonable
expenses by December 31, 2007.
1.2 Deductions.
All
monetary amounts paid to Employee pursuant to sections 1.1(a), (b) and (c)
shall
be treated by the Company as wages and shall be subject to reduction by Company
for federal and state income taxes and FICA (Social Security and Medicare)
taxes
(in accordance with a Form W-4 delivered or to be delivered to Company by
Employee) and any other normal and authorized deductions.
1.3 Conditions
to Company’s Payment and Performance. Company
shall not have any obligation to pay any monetary amount to Employee or to
perform any other obligation under this Agreement, unless and until: (a)
Employee provides Company with a copy of this Agreement bearing Employee’s
notarized signature; and (b) the seven (7) day revocation period described
in
Section 4 of this Agreement expires without revocation by Employee.
2. General
Mutual Release of All “Released Claims.”
Employee
hereby fully and forever releases and discharges Company (and all other
“Releasees” as defined herein) from any and all of Employee’s “Released Claims”
(as defined herein). The Company hereby fully and forever releases and
discharges Employee (and all other “Releasees” as defined herein) from any and
all of the Company’s and the Company’s Releasee’s “Released Claims” (as defined
herein).
3. Company
Information and Property.
3.1 Return
of Company Information and Property.
Employee
represents that Employee has returned or will immediately upon signing this
Agreement return to Company all non-public company information and property
that
is in Employee’s possession, custody or control, except
as such
information or property is relevant to Employee’s position as a Director of the
Company, a shareholder or to his continuing role in the area of Asian Investor
Relations. Employee represents that Employee has not retained and will not
retain any copies, duplicates, reproductions, or excerpts of any company
property, other than the information and property that is specifically allowed
to be retained by this paragraph.
3.2 Right
to Retention of Certain Company Property.
Company
agrees to continue to provide Employee with such remote support as is necessary
to allow him to provide consulting services in the area of Asian Investor
Relations, including internet connection, computer and telephone access, and
such other support that the Company deems reasonable and necessary for the
provision of such services. The parties agree that Employee is free to stop
providing such services at any time for any or no reason without the necessity
of returning the computer and phone. The parties also agree that so long as
Employee is providing services as a Consultant in the area of Asian Investor
Relations, with prior approval, the Company will pay for at least one trip
to
Asia per quarter to interface with the Company’s actual and potential
investors.
4. ADEA
(Age Discrimination) Claims.
4.1 Employee’s
Waiver of 21-day Waiting Period. Employee
understands that the Older Workers’ Benefit Protection Act (“OWBPA”), 29 U.S.C.
Section 626(f), provides certain rights to an employee where, as here, the
employee is asked to waive and release claims that the employee has or claims
to
have under the Age Discrimination in Employment Act, 29 U.S.C.
Sections 621, et
seq.
(“ADEA”). Employee understands that by virtue of the OWBPA, Employee has a
period of twenty-one (21) days from Employee’s receipt of this Agreement to
consider the terms of this Agreement. Employee represents and agrees that said
twenty-one (21) day period has been offered to Employee and that Employee has
elected to waive said twenty-one (21) day period by signing this Agreement.
4.2 Employee’s
Acknowledgements.
Employee
acknowledges that:
(a) this
Agreement is written in a manner calculated to be understood by Employee;
(b) Employee
is waiving Employee’s rights and Released Claims in exchange for consideration
in addition to anything of value to which Employee already is entitled; and
(c) Employee
is hereby advised in writing to consult with an attorney prior to executing
this
Agreement.
4.3 Right
To Revoke Agreement.
Employee
further understands that Employee may revoke this Agreement within
seven (7) days after Employee has signed it and that this Agreement shall
not become legally effective or enforceable until said seven (7) day revocation
period has expired. Employee understands that this Agreement will be irrevocable
and binding upon Employee after the revocation period has elapsed, if Employee
has not revoked this Agreement within the seven (7) day revocation period.
The
Company has no right to revoke this Agreement and unless revoked by Employee,
it
is binding upon execution.
4.4 Procedure
for Revocation.
If
Employee wishes to revoke this Agreement, Employee will do so by delivering
to
the Company, within the seven (7) day revocation period, a letter or other
written document signed by Employee stating that Employee has revoked this
Agreement within the seven (7) day revocation period set forth in this
Agreement.
4.5 Stock
Options.
The
parties agree that Employee possesses 436,000 fully vested stock options by
virtue of his employment. The parties agree that Employee shall have the full
term of such stock options to exercise them. In the event that Employee ceases
to be a Service Provider as that term is defined under the 2007 Incentive Stock
Plan, then the Company or Plan Administrator (as appropriate) shall take
appropriate action to ensure that Employee retains the full term of the stock
option (i.e. until July 5, 2012) to exercise his options.
5. No
Continued Vesting.
No
additional vacation pay, sick pay, paid time off or other employment
compensation, rights or benefits of any kind, except as provided in paragraphs
1.1(d) and (e), shall accrue to Employee after the Effective Date of this
Agreement, and no additional vesting under any stock option shall occur after
the Effective Date of this Agreement.
6. Resignation/No
Further Services Required of Employee.
The
parties agree that Employee shall be considered to have resigned from the
Company. The parties have agreed to treat such resignation as a termination
without Cause under the Second Amended and Restated Employment Agreement. The
parties have further agreed that for purposes of Paragraph 4 of the Second
Amended and Restated Employment Agreement, Employee’s date of separation from
employment shall be October 1, 2007. Company will not require Employee to
perform any further services after the Effective Date of this Agreement.
Employee may continue to voluntarily serve as a Director and as consultant
in
the area of Asia investor relations on an at-will basis.
7. Confidentiality.
Employee
and the Company shall keep the facts, terms and substance of this Agreement
(including but not limited to the amounts of any Departure Payments or other
consideration for this Agreement) completely confidential. Provided however,
that (a) the Company may make any disclosure required by law or as required
for
auditing purposes, (b) Employee may make disclosures in confidence to Employee’s
spouse, parents, attorney, accountant, auditor, tax preparer and financial
advisor, upon the recipient’s promise not to re-disclose same to any other
person or entity who has no legal right to know such information, and
(c) either party may make disclosures required by law or by a court or
governmental agency acting with the force of law.
8. Future
Employment.
If
Company or a successor entity declines to consider Employee for future
employment or re-employment, such declination shall not in any way be construed
or used as evidence of any wrongdoing or breach by Company or any violation
of
local, state or federal employment or employment discrimination law or
regulation.
9. No
Pending Litigation.
Employee
represents that: (a) Employee has no lawsuit pending against Company in any
state or federal court that has not been expressly and specifically noted
herein; and (b) Employee will dismiss, with prejudice and without award of
costs or attorney fees, any such lawsuit that might be pending against Company
in any state or federal court.
10. Worker’s
Compensation.
Employee represents that: (a) Employee has not sustained any injury in the
course of Employee’s employment with Company or incurred any occupational
disease in any way related to his/her employment with Company; and (b) Employee
has no right to make or assert any claim of any kind against Company under
any
worker’s compensation law, act or statute.
11. Definitions.
11.1 Definition
of “Released Claim(s).” The
term
“Released Claim(s),” as used in this Agreement, means any and all claims-whether
past or present, known or unknown, suspected or not suspected, contingent or
established legal, equitable or otherwise-of every kind, name or nature, whether
based upon Employee’s employment with the Company, the termination of that
employment or any other transaction, occurrence, event or other matter occurring
on or before the Effective Date of this Agreement. The term “Released Claim(s)”
includes, but is not limited to, any and all types of claims that either party
may have for relief, causes of action, demands, indemnities, liabilities and
obligations, for damages, costs, expenses, attorney fees, payment of judgments,
or other legal or equitable or other relief, based upon any allegation
of:
(a) breach
of
any express or implied employment contract or agreement or covenant of good
faith or fair dealing;
(b) wrongful
or constructive discharge from employment, in violation of public policy or
otherwise;
(c) the
Idaho
Claims for Wages Act or any other wage claim statute, regulation or common
law;
(d) the
federal Family and Medical Leave Act (FMLA), the Age Discrimination in
Employment Act (ADEA), the Older Workers’ Benefit Protection Act (OWBPA), the
Americans with Disabilities Act (ADA), the Fair Labor Standards Act (FLSA),
the
Employee Retirement Income Security Act (ERISA), Title VII of the Civil
Rights Act of 1964 (Title VII), the Worker Adjustment and Retraining
Notification Act (WARN), the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act (SOX), the Idaho Human Rights
Act, or any amendment to any such statute;
(e) misrepresentation,
fraud, defamation, libel, slander, invasion of privacy, infliction of emotional
distress, negligence, conversion, and property loss, damage or
destruction;
(f) assault,
battery, false imprisonment or personal or bodily injury or death unrelated
to
employment; and
(g) to
the
full extent allowed by law, any other federal, state or local employment,
employment discrimination, human rights, tort, or wage and hour statute,
regulation or common law.
11.1.2 Unreleased
Claims.
The
foregoing notwithstanding, the term “Released Claim(s)” does not include: (a)
any claim for breach of this Agreement; (b) any claim based upon a future
transaction, occurrence, event or other matter; or (c) any administrative charge
or complaint, including but not limited to a charge of discrimination, filed
with any governmental agency, including but not limited to the Equal Employment
Opportunity Commission (“EEOC”).
11.1.3 Waiver
of Right To Recover Money Damages in Non-judicial
Proceedings.
Nothing
in this Agreement shall be construed or interpreted to limit Employee’s right to
file a charge of discrimination or other charge or complaint with, or
participate in any investigation or proceeding by, any federal, state or local
administrative agency, except that Employee hereby waives Employee’s right to
recover monetary damages from Company (and the other Releasees as defined
herein) as the result of any such administrative charge, complaint,
investigation and/or proceeding.
11.2 Definitions
of “Party” and “Parties.”
Employee
and Company may be described individually herein as a “Party” or together as the
“Parties.”
11.3 Definition
of “Releasees.”
The term
“Releasees,” as used in this Agreement with respect to the Company, shall mean
the Company and the Company’s current and former directors, officers, employees,
agents, stockholders, members, estates, representatives, predecessors,
successors, divisions, assigns, attorneys, insurers, reinsurers, underwriters,
holding companies, subsidiaries, related or affiliated entities, and any and
all
other persons and entities acting for, by, through or in concert with the
Company. The term “Releasees” as used in this Agreement with respect to Employee
shall mean himself, his wife, his marital community, his parents, his agents,
insurers, attorneys, reinsurers, underwriters, and any and all other persons
and
entities acting for, by, through or in concert with Employee.
12. Miscellaneous
Representations.
The
Company understands that Employee’s execution of this Agreement is based upon
the Company’s follow-through of the following promised actions: (a) payment to
Employee’s father of $56,000 by January 31, 2008, (b) delivery by January 31,
2008 to Employee of Stock Certificates evidencing ownership of 8,579,444 shares
in RxElite Inc.,
and (c)
delivery by January 31, 2008 of warrants to purchase (i) 552,433 shares of
RxElite Inc. stock at a strike price of $0.85 per share and (ii) 450,374
shares of RxElite Inc. stock at a strike price of $0.60 per share. Each warrant
shall have a two year term for exercise. Failure to take such actions shall
constitute a breach of this Agreement.
13. Miscellaneous
Provisions.
13.1 No
Admission of Liability by Either Party. The
parties enter into this Agreement for the sole purpose of avoiding the time
and
expense of potential litigation or other dispute resolution
procedure. Neither
this Agreement nor anything contained herein shall be construed or interpreted
as an admission of any liability or fault by either party.
13.2 General
Release.
This
Agreement contains a complete and total release of all of Employee’s past and
present Released Claims against Company and the Company’s past and present
Released Claims against Employee. Neither Employee or the Company will be able
to recover any further monetary amounts from the other for any such Released
Claim, even if such Released Claim is not known to Employee or the Company
and
even if knowledge of the unknown Released Claim would have caused Employee
or
the Company not to enter into this Agreement.
13.3 Other
Promises.
No
promise, inducement or agreement, except those stated in this Agreement, has
been made to Employee or the Company to induce Employee or the Company to make
or sign this Agreement.
13.4 Integration.
The
terms of this Agreement are contractual and not mere recitals. This Agreement
constitutes the final and entire expression of the parties and supersedes all
prior statements, promises, representations, agreements and understandings,
either oral or written, with respect to the matters set forth herein, except
that Employee shall continue to be bound by Paragraphs 4, 9 (c) (i) and (ii)
of
the Second Amended and Restated Employment Agreement, as well as the provisions
of any other assignments of intellectual property and/or non-competition,
customer or employee non-solicitation, non-disclosure, confidentiality and/or
similar agreements between the Parties.
13.5 Modification.
No agent
or employee of Company or any other person may orally or by conduct add to,
delete or otherwise amend, modify, vary or contradict the terms or conditions
of
this Agreement or this subsection. This Agreement may be modified only by a
written agreement signed by an authorized representative of the Company and
the
Employee.
13.6 Titles
and Captions. All
section and subsection titles and captions contained in this Agreement are
for
convenience only and shall not be deemed part of the context nor affect the
construction or interpretation of this Agreement.
13.7 Number
and Gender.
Whenever
used herein, the singular number shall include the plural and the plural the
singular, and the use of any gender shall include all.
13.8 Severability.
The
invalidity or unenforceability of any provision herein, or portion thereof,
shall in no way affect the enforceability of any of the remaining provisions
of
this Agreement, which remaining provisions shall remain in full force and effect
as if this Agreement has been executed with the invalid portion thereof
eliminated.
13.9 Parties
in Interest.
This
Agreement shall be binding upon and inure to the benefit of Company, the other
Releasees, Employee, and Employee’s current and former spouses, family members,
successors, purchasers, representatives, attorneys, assigns, agents, heirs,
executors, administrators, and any and all other persons and entities acting
for, by, through, on behalf of or in concert with Employee or Company. No other
person or entity is intended to be a beneficiary of this Agreement or to have
any rights to enforce this Agreement. The parties intend that if Employee dies
before this Agreement is fully performed, the Agreement shall remain in effect
and his family and heirs shall obtain the benefits herein.
As
a
condition of any sale of the business or substantially all of its assets, or
any
change in control thereof, the Company shall obtain the agreement of the
purchaser to honor all terms of this Agreement.
13.10 Governing
Law.
This
Agreement shall be interpreted, construed, governed and enforced in accordance
with the laws of the state of Idaho, without regard to its conflict of law
rules, other than Section 187 of the Restatement (Second) of Conflicts of Laws,
which permits the Parties to choose the law to govern their contractual rights
and duties.
13.11 Attorney
Fees.
In any
action, other than an action involving the ADEA, brought to interpret or enforce
the provisions of this Agreement, the prevailing party shall be entitled to
an
award of its reasonable attorney fees and court costs, in addition to any other
relief that may be awarded.
13.12 Waiver.
Any
waiver by either party of any breach or violation of any provision of this
Agreement shall not operate or be construed to be a waiver of any other or
subsequent breach or violation of this Agreement.
13.13 Counterparts
and Facsimile Signatures. This
document may be executed in counterparts, and once so executed by the Parties,
each such counterpart shall be deemed to be an original instrument, but both
such counterparts together shall constitute but one Agreement. Any facsimile
signature hereon shall be deemed to be an original signature.
13.14 Construction
of Agreement. This
Agreement embodies the terms of a settlement that is the product of voluntary
negotiation between the Parties. Therefore, the language of this Agreement
shall
be construed as a whole, according to its fair meaning, and not strictly for
or
against either Party.
13.15 Voluntary
Execution /Authority.
Each of
the Parties executes this Agreement freely and voluntarily, without any duress
or influence on the part of the other Party or any third person, with the intent
to enjoy the Party’s benefits and discharge the Party’s obligations as set forth
in this Agreement. The parties warrant that the signatories have full authority
to execute this Agreement and bind their respective parties to its
terms.
13.16 Further
Action.
The
parties will execute and deliver to each other any other documents and will
take
any other action reasonably necessary to effectuate the intent of this
Agreement.
13.17 Default.
In the
event of a default by the Company of any of the payment obligations set forth
in
this Agreement, the parties agree that in addition to any remedies allowed
by
law, any overdue payments shall accrue interest at the rate of twelve percent
(12%). The parties also agree that the Company shall have thirty days to cure
the default (including the payment of any interest accrued) prior to Employee
instituting any legal action to collect on such unpaid balance.
During
the cure period and prior to default amount and interest being paid in full,
the
parties shall have the option, upon mutual agreement of both parties, of
converting the past due amount owed in paragraph 1.1 into a stock grant, with
the price of the stock calculated at the lesser
of
eighty-five cents ($.85) per share or the average trading price of the stock
for
the twenty (20) days prior to Employee’s election. If the parties mutually agree
to such a grant in writing, then the Company shall take all actions required
to
implement such stock grant within thirty (30) days of written notice of
election.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
Employee
and the Company have fully read and fully understand the terms of this
Agreement, and are fully aware of the legal and binding effect of signing this
Agreement.
| Employee | |
| /s/ ▇▇▇▇▇▇ ▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇▇▇▇ |
| STATE OF OHIO |
)
|
| ) ss. | |
| County of ▇▇▇▇▇ | ) |
On
this 14th day of December, 2007, before me personally appeared
▇▇▇▇▇▇
▇▇▇▇,
known
or identified to me (or proved to me on the oath of IDAHO DC), to be the person
whose name is subscribed to the within instrument, and acknowledged to me that
he executed the same.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
| /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
NOTARY
PUBLIC FOR 5/3 Bank
|
|
| Residing at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
| My Commission Expires 10-11-2011 |
DEPARTURE
AGREEMENT AND GENERAL RELEASE - 9
| By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
| Its CEO and President |
On
this 16th day of January, 2008, before me ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
personally appeared ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
known
or identified to me (or proved to me on the oath of personal knowledge) to
be
the President of RxElite,
Inc.,
the
corporation that executed the instrument or the person who executed the
instrument on behalf of said corporation, and acknowledged to me that such
corporation executed the same.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
| /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
NOTARY
PUBLIC FOR IDAHO
|
|
| Residing at Ada County | |
| My Commission Expires 8/6/09 |
DEPARTURE
AGREEMENT AND GENERAL RELEASE -
10