SEPARATION AND GENERAL RELEASE AGREEMENT
EXHIBIT
10.2
This
Separation and General Release Agreement (this “Separation Agreement”), is
entered into this 5th day of
July, 2009, by and between Xxxxxxx X. Xxxxx, an individual (the “Executive”), and Delcath
Systems, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Executive is
resigning from employment with the Company effective July 6, 2009;
WHEREAS, the Executive and the
Company have agreed upon the terms set forth herein;
NOW, THEREFORE, in
consideration of the covenants undertaken and the releases contained in this
Separation Agreement, the Executive and the Company agree as
follows:
I. Resignation. The Executive
hereby resigns as an officer, employee, member, manager and in any other
capacity with the Company and each of its affiliates, effective July 6,
2009 (the “Separation
Date”); provided,
however, that the Executive does not resign from his position as a member
of the Board of Directors of the Company (the “Board”). Concurrently
with the execution of this Separation Agreement, the Executive shall execute the
letter attached as Annex A hereto and
promptly deliver such letter to the Company. The Company and its
affiliates hereby accept such resignation, effective as of the Separation
Date. The Executive shall be paid any accrued but unpaid base salary
for services performed through the Separation Date and payment for any
unreimbursed business expenses reasonably incurred prior to the Separation Date
and timely submitted in accordance with the Company’s reimbursement
policies.
II. Severance.
A. The
Company shall pay the Executive cash severance in the amount of $396,000 in a
lump sum within 30 days after the Separation Date.
B. Based on
his performance in fiscal year 2009 through the Separation Date, the
Compensation and Stock Option Committee of the Board has determined that the
Executive is entitled to a bonus in the amount of $80,000, which amount shall be
paid in a lump sum within 30 days after the Separation Date.
Payment
of the benefits set forth in this Section II is
contingent upon the Executive’s execution and non-revocation of this Separation
Agreement pursuant to Section
VI.B.5.
III. Health
Coverage. The Company shall
pay the entire premiums due for the Executive’s continued
participation in the Company’s medical and dental plans under COBRA for 12
months after the Separation Date.
IV. Stock
Options. As of the
Separation Date, the Executive is a party to option agreements (each, an “Option Agreement”) providing
for options (each, an “Option”) to acquire shares of
common stock of the Company as shown on the attached Schedule
I. Each Option is fully vested and exercisable for the periods
stated on such Schedule
I.
V. No Other
Benefits. The benefits
provided pursuant to Sections I, II, III and
IV are in lieu of any other payments or benefits beyond the Separation
Date, and no such payments or benefits shall accrue or be payable, except for
fees earned by the Executive for services provided after the Separation Date as
a non-employee member of the Board. The Executive specifically
acknowledges and agrees that
he is
entitled to receive no other severance pay or other benefits pursuant to any
plan or policy of the Company or any of its affiliates, including, without
limitation, the Employment Agreement.
VI. Release.
A. The
Executive, on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to xxx and fully releases and discharges the Company and each of its parents,
subsidiaries and affiliates, past and present, as well as its and their
trustees, directors, officers, members, managers, partners, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and successors,
past and present, and each of them, with respect to any claim under Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Family and Medical
Leave Act of 1993, the New York Human Rights Law, the New York Retaliatory
Action By Employers Law, the New York Civil Rights Law, the New
York Nondiscrimination for Legal Actions Law, the New York Wage-Hour
Law, the New York Workers' Compensation Law, the New York Wage Payment Law, the
New York City Human Rights Law, and for harassment, discrimination
and retaliation of any kind, or any other cause of action, or any claim, for
severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, workers’ compensation
or disability coverage, in each case arising out his service as an officer
or employee or his separation from his position as an officer or
employee, as applicable, committed or omitted prior to the date of this
Separation Agreement. Notwithstanding the foregoing, the Executive is
specifically not releasing any rights he has to indemnification by the Company
in his capacity as an officer or director of the Company, any claims he has or
may have in the future in his capacity as a director of the Company, or any
claims he has for reimbursement of medical or dental claims incurred under
Company policies. Nothing in this Section VI.A. shall
expressly or by implication diminish, decrease, discharge, release or lessen the
obligations of the Company under this Separation Agreement.
B. ADEA
Waiver. The Executive further expressly acknowledges and
agrees that:
1. In return
for this Separation Agreement, the Executive will receive consideration beyond
that which the Executive was already entitled to receive before entering into
this Separation Agreement;
2. The
Executive is hereby advised in writing by this Separation Agreement to consult
with an attorney before signing this Separation Agreement;
3. The
Executive has voluntarily chosen to enter into this Separation Agreement and has
not been forced or pressured in any way to sign it;
4. The
Executive was given a copy of this Separation Agreement on July 5, 2009 and
informed that he had twenty one (21) days within which to consider this
Separation Agreement and that if he wished to execute this Separation Agreement
prior to expiration of such 21-day period, he should execute the Endorsement
attached hereto as Annex B;
5. The
Executive was informed that he had seven (7) days following the date of
execution of this Separation Agreement in which to revoke this Separation
Agreement, and this Separation Agreement will become null and void if Executive
elects revocation during that time. Any revocation must be in writing
and must be received by the Company during the seven-day revocation
period. In the event that Executive exercises his right of
revocation, neither the Company nor Executive will have any obligations under
this Separation Agreement.
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VII. No
Transferred Claims. The Executive
warrants and represents that he has not heretofore assigned or transferred to
any person not a party to this Separation Agreement any released matter or any
part or portion thereof and he shall defend, indemnify and hold the Company and
each of its affiliates harmless from and against any claim (including the
payment of attorneys’ fees and costs actually incurred whether or not litigation
is commenced) based on or in connection with or arising out of any such
assignment or transfer made, purported or claimed.
VIII. Miscellaneous
A. Successors.
1. This
Separation Agreement is personal to the Executive and shall not, without the
prior written consent of the Executive, be assignable by the
Executive.
2. This
Separation Agreement shall inure to the benefit of and be binding upon the
Company and its respective successors and assigns and any such successor or
assignee shall be deemed substituted for the Company under the terms of this
Separation Agreement for all purposes. As used herein, “successor”
and “assignee” shall include any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires the ownership of the Company or to which the Company assigns
this Separation Agreement by operation of law or otherwise.
B. Waiver. No waiver of any
breach of any term or provision of this Separation Agreement shall be construed
to be, nor shall be, a waiver of any other breach of this Separation
Agreement. No waiver shall be binding unless in writing and signed by
the party waiving the breach.
C. Modification. This Separation
Agreement may not be amended or modified other than by a written agreement
executed by the Executive and the Company.
D. Complete
Agreement. This Separation
Agreement constitutes and contains the entire agreement and final understanding
concerning the Executive’s relationship with the Company and its affiliates and
the other subject matters addressed herein between the parties, and supersedes
and replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters hereof, it being
acknowledged that Section 6 of the Employment Agreement is incorporated herein
and remains binding on the Executive in accordance with its
terms. Except as specifically modified by this Separation Agreement,
the Option Agreements are outside of the scope of the preceding sentence and
shall continue in effect in accordance with their terms. Any
representation, promise or agreement not specifically included in this
Separation Agreement or an Option Agreement shall not be binding upon or
enforceable against either party.
E. Litigation
and Investigation Assistance. The Executive
agrees to cooperate, at the Company’s sole cost and expense, in the defense of
the Company or any of its affiliates against any threatened or pending
litigation or in any investigation or proceeding by any governmental agency or
body that relates to any events or actions which occurred during or prior to the
term of the Executive’s employment with the Company. Furthermore, the
Executive agrees to cooperate, at the Company’s sole cost and expense, in the
prosecution of any claims and lawsuits brought by the Company or any of its
affiliates that are currently outstanding or that may in the future be brought
relating to matters which occurred during or prior to the term of the
Executive’s employment with the Company. From and after the
Separation Date, except as requested by the Company or as required by law, the
Executive shall not comment upon any (i) threatened or pending claim or
litigation
3
(including
investigations or arbitrations) involving the Company or any of its affiliates
or (ii) threatened or pending government investigation involving the Company or
any of its affiliates.
F. Severability. If any provision
of this Separation Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or applications of the Separation
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Separation Agreement are
declared to be severable.
G. Cooperation
in Drafting. Each party has
cooperated in the drafting and preparation of this Separation
Agreement. Hence, in any construction to be made of this Separation
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
H. Counterparts. This Separation
Agreement may be executed in counterparts, including via facsimile, and each
counterpart, when executed, shall have the efficacy of a signed
original. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.
I. Choice of
Law; Forum; Waiver of Jury Trial.
1. THIS
SEPARATION AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE
INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.
2. Except
for the limited purpose of enforcing a restrictive covenant as provided in
Section 6.4 of the Employment Agreement, any legal dispute related to this
Separation Agreement and/or any claim related to this Separation Agreement, or
breach thereof, shall, in lieu of being submitted to a court of law, be
submitted to arbitration, in accordance with the applicable dispute resolution
procedures of the American Arbitration Association. The award of the arbitrator
shall be final and binding upon the parties. The parties hereto agree
that (i) one arbitrator shall be selected pursuant to the rules and procedures
of the American Arbitration Association, (ii) the arbitrator shall have the
power to award injunctive relief or to direct specific performance, (iii) each
of the parties, unless otherwise required by applicable law, shall bear its own
attorneys’ fees, costs and expenses and an equal share of the arbitrator’s and
administrative fees of arbitration, and (iv) the arbitrator shall award to the
prevailing party a sum equal to that party’s share of the arbitrator’s and
administrative fees of arbitration. Nothing in this Section shall be
construed as providing the Executive a cause of action, remedy or procedure that
the Executive would not otherwise have under this Separation Agreement or the
law.
3. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
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J. Advice of
Counsel. In entering this Separation Agreement, the parties
represent that they have had the opportunity to consult with attorneys and that
the terms of this Separation Agreement are fully understood and voluntarily
accepted by them.
K. Supplementary
Documents. All parties agree
to cooperate fully and to execute any and all supplementary documents and to
take all additional actions, in each case that may be reasonably necessary or
appropriate to give full force to the basic terms and intent of this Separation
Agreement and which are not inconsistent with its terms.
L. Headings. The
section headings contained in this Separation Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Separation Agreement.
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I have
read the foregoing Separation Agreement and I accept and agree to the provisions
it contains and hereby execute it voluntarily with full understanding of its
consequences.
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the
“Executive”
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/s/
Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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the
“Company”
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Delcath
Systems, Inc.,
a
Delaware corporation
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/s/
Xxxxx Xxxxxx
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By:
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Xxxxx
Xxxxxx
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Its:
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Secretary
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SCHEDULE
I
Options
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Name
of Company Plan
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Date
of Grant
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Number
of Shares Covered by Option (subject to adjustment in accordance with
applicable Plan)
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Exercise
Price per Share
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Last
Date on which Options May be Exercised (unless sooner terminated under
applicable Plan1)
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2004
Stock Incentive Plan
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November
14, 2006
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40,000
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$3.28
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November
14, 2011
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2004
Stock Incentive Plan
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July
2, 2007
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50,000
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$3.90
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5th
anniversary of the Separation Date
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||||
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2004
Stock Incentive Plan
|
July
2, 2007
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100,000
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$5.85
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5th
anniversary of the Separation Date
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||||
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2004
Stock Incentive Plan
|
January
2, 2008
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50,000
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$1.74
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5th
anniversary of the Separation Date
|
||||
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2004
Stock Incentive Plan
|
July
2, 2008
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50,000
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$2.44
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5th
anniversary of the Separation Date
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||||
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2004
Stock Incentive Plan
|
January
2, 2009
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50,000
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$1.24
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5th
anniversary of the Separation Date
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||||
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2009
Stock Incentive Plan
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July
2, 2009
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50,000
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$3.51
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5th
anniversary of the Separation
Date
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1. The Executive
and Company acknowledge that (a) the Options may terminate earlier than the
dates shown on the table in accordance with the terms of the applicable Company
Stock Incentive Plan under which they were granted (for example, if all options
under the Plan are terminated in connection with a sale of the Company) but (b)
the Options otherwise shall remain exercisable through the dates shown and (c)
the Executive is under no obligation to provide services to the Company as a
director, consultant or otherwise for any period of time as a condition to
retaining his rights to exercise the Options until the dates
shown.
