EX-10.7 5 mack-ex107_805.htm EX-10.7 SEPARATION AND RELEASE OF CLAIMS AGREEMENT
Exhibit 10.7
SEPARATION AND RELEASE OF CLAIMS AGREEMENT
This Separation and Release of Claims Agreement (the “Agreement”) is made as of the Effective Date (as defined below) between Merrimack Pharmaceuticals, Inc. (the “Company”) and Xxxxxx X. Xxxxxx (“Executive”) (together, the “Parties”).
1. |
(a) Executive’s effective date of separation from employment with the Company will be October 3, 2016 (the “Separation Date”). Executive hereby resigns, as of the Separation Date, from his employment with the Company and from his positions as a member of the Company’s Board of Directors and as an officer of the Company. Executive agrees to execute and deliver any documents reasonably necessary to effectuate such resignations, provided that nothing in any such document is inconsistent with any terms set forth in this Agreement. As of the Separation Date, all salary payments from the Company will cease and any benefits Executive had as of the Separation Date under Company-provided benefit plans, programs, or practices will terminate, except as required by federal or state law or as otherwise specifically set forth in this Agreement.
(b) Upon the Separation Date, the Company and Executive shall enter into a consulting agreement in the form attached to this Agreement as Attachment A and incorporated into this Agreement (the “Consulting Agreement”), pursuant to which Executive shall provide assistance in connection with the Company’s transition to new leadership. During the Consultation Period (as such term is defined in the Consulting Agreement), any unvested equity awards previously granted to Executive by the Company will continue to vest and be exercisable in accordance with the applicable equity plans and award agreements. It is anticipated that Executive’s performance of services under the Consulting Agreement will be limited to less than one (1) day per week.
1
(a) Salary Continuation – Commencing on the first regularly scheduled payroll date that follows the sixtieth (60th) day after the Separation Date (the “Payment Commencement Date”), the Company will, for a twelve (12) month period (the “Severance Period”), provide Executive with severance pay in the form of salary continuation payments at Executive’s current annual base salary rate of $598,689.00, less all applicable taxes and withholdings and in accordance with the Company’s regular payroll practices.
(c) Pro-Rata Bonus – On the Payment Commencement Date, the Company shall provide Executive with a pro-rata bonus payment of $154,271, which is equivalent to (i) the average of Executive’s annual bonus payments over each of the three (3) years prior to the Separation Date, multiplied by (ii) a fraction, the numerator of which is the number of days during calendar year 2016 during which Executive remained employed by the Company and the denominator of which is 365.
Other than the Severance Benefits, Executive will not be eligible for, nor shall he have a right to receive, any payments or benefits from the Company following the Separation Date, other than reimbursement for any outstanding business expenses in accordance with Company policy.
2
fiduciaries (each in their individual and corporate capacities) (collectively, the “Released Parties”) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature that Executive ever had or now has against any or all of the Released Parties up to the date on which he signs this Agreement, whether known or unknown, including, but not limited to, any and all claims arising out of or relating to Executive’s employment with and/or separation from the Company, including, but not limited to, all claims under Title VII of the Civil Rights Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Genetic Information Nondiscrimination Act, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act, Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, and the Employee Retirement Income Security Act, all as amended; all claims arising out of the Massachusetts Fair Employment Practices Act, Mass. Gen. Laws ch. 151B, § 1 et seq., the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148 et seq. (Massachusetts law regarding payment of wages and overtime), the Massachusetts Civil Rights Act, Mass. Gen. Laws ch. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, Mass. Gen. Laws. ch. 93, § 102 and Mass. Gen. Laws ch. 214, § 1C, the Massachusetts Labor and Industries Act, Mass. Gen. Laws ch. 149, § 1 et seq., Mass. Gen. Laws ch. 214, § 1B (Massachusetts right of privacy law), the Massachusetts Maternity Leave Act, Mass. Gen. Laws xx. 000, § 000X, and the Massachusetts Small Necessities Leave Act, Mass. Gen. Laws xx. 000, § 00X, all as amended; all common law claims including, but not limited to, actions in defamation, intentional infliction of emotional distress, misrepresentation, fraud, wrongful discharge, and breach of contract (including, without limitation, all claims arising out of or related to the Employment Agreement); all state and federal whistleblower claims to the maximum extent permitted by law; and any claim or damage arising out of Executive’s employment with and/or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that nothing in this release of claims prevents Executive from filing a charge with, cooperating with, or participating in any investigation or proceeding before, the Equal Employment Opportunity Commission or a state fair employment practices agency (except that Executive acknowledges that he may not recover any monetary benefits in connection with any such charge, investigation, or proceeding, and Executive further waives any rights or claims to any payment, benefit, attorneys’ fees or other remedial relief in connection with any such charge, investigation or proceeding). This release also does not prevent Executive from reporting possible violations of federal securities laws to government enforcement agencies without notice to the Company, or from receiving any applicable award for information provided to such government enforcement agencies. Further, nothing herein shall prevent Executive from bringing claims to enforce this Agreement and/or the Consulting Agreement, or release (i) any rights Executive may have under the Company’s certificate of incorporation, by-laws, insurance and/or any indemnification agreement between him and the Company (and/or otherwise under law) for indemnification and/or defense as an employee, officer or director of the Company for his service to the Company (recognizing that such |
3
indemnification and/or defense is not guaranteed by this Agreement and shall be governed by the instrument or law, if any, providing for such indemnification and/or defense), (ii) any rights Executive may have to vested equity ownership in the Company under the applicable equity plans and agreements, (iii) any rights Executive may have to vested pension or 401(K) benefits or interests under any ERISA-Covered benefit plan (excluding severance) provided by the Company, (iv) any rights to COBRA or Workers’ Compensation Benefits, or (v) any rights or claims that cannot be waived by law, including claims for unemployment benefits, which the Company agrees that it will not contest, provided that the Company will not make any false statement to any government agency. |
5. |
4
during his employment or while performing services under the Consulting Agreement. Executive further agrees that he will, upon the earlier of the Company’s request or the termination of his services under the Consulting Agreement, cancel all accounts for his benefit, if any, in the Company’s name, including but not limited to, credit cards, telephone charge cards, cellular phone and/or wireless data accounts and computer accounts. |
7. |
8. |
5
Company’s counsel, at reasonable times and locations designated by the Company, to investigate or prepare the Company’s claims or defenses, to prepare for trial or discovery or an administrative hearing, mediation, arbitration or other proceeding and to act as a witness when requested by the Company. The Company will reimburse Executive for all reasonable and documented out of pocket costs that he incurs to comply with this paragraph. Executive further agrees that, to the extent permitted by law, he will notify the Company promptly in the event that he is served with a subpoena (other than a subpoena issued by a government agency), or in the event that he is asked to provide a third party (other than a government agency) with information concerning any actual or potential complaint or claim against the Company. |
10. |
11. |
12. |
13. |
14. |
6
16. |
17. |
Applicable Law – This Agreement shall be interpreted and construed by the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions. Executive hereby irrevocably submits to and acknowledges and recognizes the jurisdiction of the courts of the Commonwealth of Massachusetts, or if appropriate, a federal court located in the Commonwealth of Massachusetts (which courts, for purposes of this Agreement, are the only courts of competent jurisdiction), over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof. |
18. |
19. |
7
21. |
8
IN WITNESS WHEREOF, the Parties have set their hands and seals to this Agreement as of the date(s) written below.
Merrimack Pharmaceuticals, Inc.
/s/ Xxxxxxx X. Xxxxxx |
|
Date: 10/2/16 | |
By: |
Xxxxxxx X. Xxxxxx |
|
|
|
General Counsel |
|
|
I hereby agree to the terms and conditions set forth above. I have been given at least twenty-one (21) days to consider this Agreement and I have chosen to execute this on the date below. I intend that this Agreement will become a binding agreement if I do not revoke my acceptance within seven (7) days.
Xxxxxx X. Xxxxxx
|
|
|
/s/ Xxxxxx X. Xxxxxx |
|
Date: 10/2/16 |
9
CONSULTING AGREEMENT
10
MERRIMACK PHARMACEUTICALS, INC.
CONSULTING AND CONFIDENTIALITY AGREEMENT
This Consulting and Confidentiality Agreement (this “Agreement”) is entered into as of October 3, 2016 (the “Effective Date”) by and between Merrimack Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxxx (the “Consultant”).
Section 2. Compensation and Reimbursement.
1
(b)Expense Reimbursement. The Company shall reimburse the Consultant for all reasonable out-of-pocket expenses incurred by the Consultant in connection with the performance of the Services under this Agreement, so long as they are approved in writing in advance by the Company and provided such expenses are consistent with the Company’s Travel and Expense Guidelines. Such expenses include, by way of example, coach-class travel, lodging, transportation and long distance telephone charges. The Company shall also reimburse the Consultant for any unusual expenses incurred at the request, and with the prior approval, of the Company.
Section 3. Term and Termination.
2
(c)Termination by the Consultant. The Consultant may terminate the Consultation Period for any reason, with or without cause, immediately upon written notice to the Company. The Consultant shall have such right to terminate the Consultation Period as set forth in this Section 3(c) without prejudice to any right or remedy it may have due to any failure of the Company to perform its obligations under this Agreement.
(d)Effects of Termination. In the event of any termination under this Section 3, the Consultant shall be entitled to payment for Services performed and expenses incurred in accordance with Section 2(b) prior to the effective date of such termination. In addition, but only in the event the Company terminates the Consultation Period without Cause, all unvested equity granted to the Consultant shall immediately vest and remain exercisable in accordance with the applicable equity plans and award agreements. Except as otherwise explicitly provided herein, the provisions of this Section 3(d) and Sections 6 through 10 shall survive the termination or expiration of this Agreement for any reason. For purposes hereof, “Cause” shall mean (i) a failure by the Consultant to perform the Services that results in material harm to the Company, (ii) the Consultant’s material breach of this Agreement or any other written agreement with the Company, including, without limitation, the Separation and Release of Claims Agreement to which this Agreement is Attachment A, (iii) the Consultant’s fraud, embezzlement or willful misconduct related to the Company, or (iv) the Consultant’s conviction of, or plea of nolo contendere to, a misdemeanor relating to the Company, any crime involving dishonesty or moral turpitude, or any felony.
(a)No trade secrets or other confidential or proprietary information of any third party shall be disclosed to the Company or used by the Consultant in the performance of the Services hereunder, and, with respect to any information, know-how, knowledge or data disclosed to the Company or used by the Consultant in the performance of the Services, the Consultant has the full and unrestricted right to disclose or use the same.
(b)The Consultant is not a party to, or otherwise bound by, any employment, consulting or similar agreement, arrangement or understanding with any for-profit enterprise that is or may be a direct competitor of the Company (a “Competitor”).
3
(c)If the Consultant is a faculty member of, or otherwise affiliated with, an academic institution or other not-for-profit research institution (an “Academic Institution”), (i) the Consultant has disclosed such fact to the Company and has provided the Company with all patent, consulting or other applicable policies and procedures of such Academic Institution, and (ii) the Consultant has obtained any and all necessary consents and satisfied any other conditions or requirements imposed by such Academic Institution to enter into this Agreement and perform Services for the Company as contemplated hereunder.
(d)Except as set forth in such policies and procedures of an Academic Institution previously provided to the Company, there are no agreements, arrangements or understandings to which the Consultant is a party, or by which the Consultant is bound, with any current or previous employer or any other party forbidding or restricting the Consultant from entering into this Agreement or performing the Services for the Company hereunder, or which otherwise conflicts with the Consultant’s obligations under this Agreement, nor shall the Consultant enter into any such third party agreements, including without limitation any employment, consulting or advisory agreements, arrangements or understandings with a Competitor.
(e)The Consultant’s performance of the Services or any other obligations under this Agreement does not and will not conflict with or breach any agreement, arrangement or understanding with any current or previous employer or any other party to which the Consultant is a party or by which the Consultant is bound (including without limitation any non-disclosure or non-competition agreement).
(f)The Consultant has not been debarred and, to the best of the Consultant’s knowledge, is not under consideration to be debarred, by the U.S. Food and Drug Administration from working in or providing consulting or advisory services to any pharmaceutical or biotechnology company.
4
(b)Employees and Agents. The Consultant shall only disclose Confidential Information to those of its employees and agents who require knowledge or access to the Confidential Information in the course of providing the Services and who are contractually bound to protect the confidentiality of such Confidential Information. The Consultant shall inform those employees and agents who have access to the Confidential Information that such information is strictly confidential. The Consultant shall use best efforts to ensure compliance by its employees and agents having access to the Confidential Information and shall be responsible for any breach of this Agreement by such employees and agents. The Consultant shall not provide Confidential Information to any of its employees or agents who do not have a need to know such Confidential Information.
(i)which is already in the Consultant’s possession at the time of disclosure by the Company, other than by previous disclosure by the Company, as demonstrated by prior written records;
(ii)which is or becomes publicly available or a matter of public knowledge generally, through no act or omission by the Consultant;
(iii)which is lawfully received by the Consultant from a third party who is or was not bound in any confidential relationship to the Company at the time of such disclosure to the Consultant;
(iv)which is independently developed by the Consultant without reference to or reliance upon the Confidential Information (and such independent development can be properly demonstrated by the Consultant by documentary evidence); or
(v)which is required to be disclosed by the Consultant to comply with applicable laws or governmental regulations.
Further, notwithstanding the Consultant’s confidentiality obligations hereunder, the Consultant is hereby advised as follows pursuant to the Defend Trade Secrets Act: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.”
(d)Return of Confidential Information. Any Confidential Information, including data and materials, furnished by the Company for use by the Consultant in connection with the Services shall remain the sole property of the Company. The Consultant shall promptly return all such Confidential Information to the Company upon request by the Company or upon termination or expiration of this Agreement.
(e)Injunctive Relief. The restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company and are considered by the Consultant to be reasonable for such purpose. The Consultant agrees that any breach of Section 6 or 7 is likely to cause the Company substantial and irrevocable damage which is difficult to measure.
5
Section 7. Ownership of Work Product.
6
(d)Agreement with Academic Institution. This Agreement is made with the understanding that the Consultant, if affiliated with an Academic Institution, may have signed an agreement concerning inventions with such Academic Institution under which the Consultant may be obligated to assign to such Academic Institution certain inventions which arise out of or otherwise relate to the Consultant’s work at or for such Academic Institution or from the Consultant’s use of certain of its facilities or intellectual property. In performing the Services hereunder, the Consultant agrees not to utilize Academic Institution facilities or intellectual property if the result of such use is that any Works would not be assignable solely to the Company as set forth in this Section 7.
If to the Consultant: Xxxxxx X. Xxxxxx 000 Xxxxx Xxxx Xxxxxxx, XX 00000 |
If to the Company: Merrimack Pharmaceuticals, Inc. Xxx Xxxxxxx Xxxxxx, Xxxxx X0000 Xxxxxxxxx, XX 00000 Attn: Legal Department |
From time to time, either party may, by written notice to the other in accordance with this Section 9, designate another address that shall thereupon become the effective address of such party for the purpose of this Section 9.
Section 10. Miscellaneous. This Agreement, together with all exhibits hereto, constitutes the entire understanding of the parties hereto with respect to the matters contained herein and supersedes all proposals and agreements, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without regard to its conflict of laws rules. The headings contained in this Agreement are for the convenience of the parties and are not to be construed as a substantive provision hereof. This Agreement may not be modified or amended except in writing signed or executed by the Consultant and the Company. In the event any provision of this Agreement is held to be unenforceable or invalid, such unenforceability or invalidity shall not affect any other provisions of this Agreement and such other provisions shall remain in full force and effect. If any provision of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law. This Agreement shall be binding upon, and inure to the benefit of, both parties hereto and their respective successors and assigns, including any corporation with or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the
7
responsibility for actual performance of the Services is personal to the Consultant and may not be assigned or delegated by the Consultant to any other person or entity. This Agreement may be executed in counterparts and by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
8
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
CONSULTANT |
|
COMPANY |
|
|
|
/s/ Xxxxxx X. Xxxxxx |
|
/s/ Xxxxxxx X. Xxxxxx |
Signature |
|
Signature |
|
|
|
Xxxxxx X. Xxxxxx |
|
Xxxxxxx X. Xxxxxx |
Printed Name |
|
Printed Name |
|
|
|
|
|
General Counsel |
|
|
Title |
9
Description of Services
The Consultant shall use his knowledge and expertise regarding the Company to assist Xxxx Xxxxxxx, the Company’s Chairman of the Board and interim Chief Executive Officer, with the leadership transition of the Company. The Consultant shall only provide such assistance as is directed by Xx. Xxxxxxx. The Consultant shall not undertake any actions for or on behalf of the Company without written pre-approval from Xx. Xxxxxxx, including initiating communications with any partner, stockholder or other business contact of the Company. In addition, if any partner, stockholder or other business contact of the Company initiates communications with the Consultant, the Consultant shall not substantively respond to or engage with such partner, stockholder or business contact, but rather shall promptly refer such communication to Xx. Xxxxxxx to determine the appropriate response.
10