SEPARATION AND GENERAL RELEASE AGREEMENT
Exhibit
10.47
THIS
SEPARATION AND GENERAL RELEASE AGREEMENT
(this
“Agreement”) is made between J. Xxxxxx Xxxxxx (“Xxxxxx”) and DOV Pharmaceutical,
Inc. (“DOV” or the “Company”).
WHEREAS,
Xxxxxx
commenced employment by DOV on July 29, 2002;
WHEREAS,
Xxxxxx’x employment with DOV as senior vice president and general counsel will
terminate effective May 5, 2006;
WHEREAS,
DOV has
agreed to provide Xxxxxx with separation payments and transition benefits
subject to the terms and conditions set forth in this Agreement.
NOW,
THEREFORE,
DOV and
Xxxxxx hereby agree as follows:
1. Separation
of Employment.
Xxxxxx
and DOV hereby ratify and affirm that Xxxxxx will retire and terminate from
any
and all positions he holds with DOV effective as of May 5, 2006 (the “Separation
Date”). For option exercise purposes the termination is classified as retirement
pursuant to Xxxxxx’x Employment Agreement with DOV.
2. Separation
Payments.
DOV will
pay Xxxxxx on April 14, and 28, 2006, his regular payroll check and on the
next
following payroll date, May 12, 2006, his regular payroll check through May
5,
2006, plus 18
days of
accrued, unused vacation through the Separation Date.
The
Company will keep Xxxxxx on medical and dental benefits until May 30, 2006,
at
which time he will then be eligible for COBRA. Other than the foregoing, and
subject to the following sentence, Xxxxxx agrees that he has received all salary
and any other compensation or fringe benefits owed to him by DOV through the
Separation Date, and agrees that he has no further claims against DOV for salary
and any other compensation or fringe benefits through
the Separation Date. However, in consideration of the promises made by Xxxxxx
in
this Agreement, including the releases given by Xxxxxx to DOV in Paragraphs
3
through 6 of this Agreement, the parties have agreed on the following
post-termination benefits:
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(a)
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DOV
shall pay Xxxxxx at regular payroll intervals his basic compensation
as of
the Separation Date (based on his final basic compensation rate of
$28,333.33 per month) for 15 months through August 5, 2007 (such
15 month
period referred to herein as the “Severance Period”), provided that
if
the parties agree that Xxxxxx is a “specified employee” within the meaning
of Section 409A of the Code, such
payments will
not commence for
six months after
the Separation Date and
DOV
instead shall
pay Xxxxxx
on
November 6, 2006, a lump sum payment equal to six months’ basic
compensation plus, to the extent deferred pursuant to subparagraph
(b),
a
lump sum payment equal to the
cost to maintain and/or continue (as applicable) for such six-month
period
the
medical,
life, dental and disability insurance
benefits
which are provided pursuant to subparagraph (b)
below;
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(b)
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DOV
shall (i) pay on Xxxxxx’x behalf (or if more administratively practicable,
reimburse Xxxxxx for) all premiums associated with the continuation
of
medical and dental insurance coverage for the duration of the Severance
Period for Xxxxxx and his eligible dependants pursuant to COBRA (subject
to Xxxxxx’x proper election of and eligibility for such continuation
coverage under COBRA); and (ii) provide Xxxxxx with continuation
for the
duration of the Severance Period of the life and disability insurance
coverage Xxxxxx was receiving from DOV immediately prior to the Separation
Date at no cost to Xxxxxx (or, to the extent such continued coverage
is
not permitted under the applicable policies or law, shall pay premiums
on
Xxxxxx’x behalf not to exceed in the case of disability the premium
payment rate that was paid by the Company prior to the Separation
Date
(or, if more administratively practicable, reimburse Xxxxxx for all
such
premiums) associated with obtaining and providing Xxxxxx with reasonably
comparable life and disability insurance coverage for the duration
of the
Severance Period); provided
that,
if the parties agree that it is necessary to avoid a penalty tax
under
Section 409A of the Code, Xxxxxx shall pay the entire cost of such
benefits
for the
first six
months,
and DOV shall pay Xxxxxx a lump sum payment of such costs
in
accordance with the procedure set forth in subparagraph
(a);
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(c)
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effective
as of
the Separation Date, the vesting of all stock options to acquire
DOV
stock held
by Xxxxxx that are unvested shall accelerate and thereupon
vest.
It is the parties’ intention that such options remain exercisable for the
longest period permissible without causing Xxxxxx to incur a penalty
tax
under Section 409A. Under current Internal Revenue Service proposed
regulations, such options may, and shall
be
exercisable up to and including December 31, 2007, provided
that,
if Xxxxxx determines upon tax advice that an extension of
time to exercise to
a date not
later than
August 5, 2010, is permissible
without incurring a penalty tax
under Section 409A, such options shall be extended,
to and including such later date given by notice to DOV;
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(d)
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commencing
May 8, 2006, Xxxxxx shall be available upon reasonable notice to
perform
consulting services (as an independent contractor) of
up to half-time
during business days in May and June 2006 (the “Consulting Period”) for
which DOV shall pay Xxxxxx $200 per hour plus reasonable out-of-pocket
expenses; and
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(e)
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if
a replacement general counsel has not started employment with DOV
during
the above Consulting Period sufficient to permit a suitable transition
orientation, and starts employment on or prior to November 4, 2006,
Xxxxxx
shall provide reasonable consulting services for such purpose at
no
charge.
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The
foregoing severance payments shall be made net of standard withholdings and
authorized deductions, except that with respect to any consulting services
performed during the Consulting Period, Xxxxxx shall be an independent
contractor and nothing herein, explicitly or implicitly, shall be deemed or
construed to create a joint venture, partnership, agency or employee/employer
relationship between Xxxxxx and DOV with respect to the Consulting Period for
any purpose, including but not limited to taxes or employee benefits. Xxxxxx
thus understands that he will be solely responsible for paying all federal,
state and local taxes (including income tax, FICA, FUTA and other taxes that
may
be due) as a result of any consulting fees he receives pursuant to this
Agreement; and that he will not accrue any benefits under, or be covered by,
any
employee benefit plans of DOV (except for any continuation coverage as otherwise
provided in subparagraph (b) above). The severance, insurance and other payments
and benefits provided by DOV hereunder pursuant to subparagraphs (a)-(e) are
subject to Xxxxxx’x signing and delivering this agreement to DOV. In the event
of Xxxxxx’x death prior to full performance by DOV of its obligation hereunder,
severance and insurance payments if any yet to be paid, and DOV options if
any
not yet exercised, shall be paid to, or exercised by, his wife Xxxx Xxxxxx
or if
she dies to his or her legal representative or legatee. Xxxxxx acknowledges
that
the payments and benefits to be provided pursuant to subparagraphs (a)-(e)
are
payments and benefits to which he would not otherwise be entitled absent his
agreement to and compliance with the terms and conditions of this
Agreement.
3. General
Release by Xxxxxx.
In
consideration of the representations and covenants undertaken by DOV, including
the payments and benefits described in Paragraph 2 of this Agreement, Xxxxxx
releases, discharges and promises not to xxx DOV and its parent, if any,
subsidiaries, affiliates and related companies, and any of and all its current
or former directors, officers, members, employees, attorneys, representatives,
insurers, agents, successors, and assigns (individually and collectively the
“DOV Releasees”), from and with respect to any and all claims, actions, suits,
liabilities, debts, controversies, contracts, agreements, obligations, damages,
judgments, causes of action, and contingencies whatsoever (except
claims, etc., that arise hereunder relating to the enforcement
hereof),
including attorneys’ fees and costs, in law or in equity, known or unknown,
suspected or unsuspected, asserted or unasserted, that, against the DOV
Releasees, Xxxxxx and his heirs, administrators, executors, successors, assigns
and attorneys ever had, now have, or hereafter can, shall, or may have for,
upon, or by reason of any matter, cause, or thing whatsoever from the beginning
of the world to the date of this Agreement. This includes (i) any claims for
compensation, salary, bonus or similar benefit, severance pay, pension, vacation
pay, life insurance, disability benefits, health or medical insurance, or any
other fringe benefit; (ii) any claims under any federal, state, or local law,
regulation, or ordinance, including any claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans
with
Disabilities Act, the Employee Retirement Income Security Act, the Fair Labor
Standards Act, the Family Medical Leave Act, the New Jersey Law Against
Discrimination, the New Jersey Family Leave Act, the New Jersey Conscientious
Employee Protection Act, the New York State Human Rights Law, New York Executive
Law § 290 or the New York City Administrative Code; (iii) any claims arising out
of or relating to his employment with DOV, the terms and conditions of such
employment and/or the separation of such employment; and (iv) any claims related
to stock options, any claims for breach of contract (express or implied), and
any claims under common law. The parties intend this release by Xxxxxx to be
a
general release of any and all claims to the fullest extent permissible by
law.
4. New
Jersey LAD, FLA and CEPA Statutes Waiver.
Xxxxxx
recognizes that as part of his agreement to release any and all claims against
the DOV Releasees, he is releasing claims under the New Jersey Law Against
Discrimination, the New Jersey Family Leave Act and the New Jersey Conscientious
Employee Protection Act, although he has never asserted such claims. By his
signature below, Xxxxxx represents and warrants that he has been advised to
consult with an attorney of his own choosing and that he has been given a
reasonable period of time of at least twenty-one (21) days to consider this
Agreement and his release of claims pursuant to this Agreement.
5. Older
Workers Benefit Protection Act Disclosure and Waiver.
Xxxxxx
recognizes that as part of his agreement to release any and all claims against
the DOV Releasees, he is releasing claims for age discrimination under the
Age
Discrimination in Employment act, although he has never asserted such claims.
Accordingly, Xxxxxx has a right to reflect upon this Agreement for a period
of
twenty-one (21) days before executing it, and he has an additional period of
seven (7) days after executing this Agreement to revoke it under the terms
of
the Older Worker Benefit Protection Act. If Xxxxxx elects to revoke this
Agreement, he must provide written notice of such revocation to Xxxxx Xxxxxxx,
Assistant General Counsel, DOV Pharmaceutical, Inc., 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 by no later than the end of the seventh (7th)
day
after Xxxxxx executed this Agreement (this seven day period referred to herein
as the “Revocation Period”). If the last day of the Revocation Period falls on a
Saturday, Sunday or holiday, the last day of the Revocation Period shall be
deemed to be the next business day after such Saturday, Sunday or holiday.
This
Agreement shall be effective upon the expiration of the Revocation Period if
Xxxxxx has not revoked it during the Revocation Period. By his signature below,
Xxxxxx represents and warrants that he has been advised to consult with an
attorney of his own choosing, that he has been given a reasonable amount of
time
to consider this Agreement, and that if Xxxxxx signs this Agreement prior to
the
expiration of the twenty-one (21) day review period, he is voluntarily and
knowingly waiving the remainder of his twenty-one (21) day review
period.
6. Indemnification
for Claims Filed by Xxxxxx.
If
Xxxxxx files a complaint, charge or lawsuit against any of the DOV Releasees
regarding any of the claims released herein, Xxxxxx shall pay any and all costs
required in obtaining dismissal of such complaint, charge or lawsuit, including
the attorneys’ fees of any party against whom he has filed such a complaint,
charge or lawsuit. This paragraph shall not apply, however, to a claim of age
discrimination under the Age Discrimination in Employment Act.
7. Return
of DOV’s Property.
Xxxxxx
represents that by the Separation Date he will have returned to DOV all property
of DOV in his possession, including, if any, all his computer equipment, access
cards, and corporate credit cards, pagers, cellular phones and chargers, and
other property paid for by DOV. If
Xxxxxx
gives to DOV books and other documents belonging to him and currently maintained
in his legal library at DOV, he shall be accorded access thereto after the
Separation Date upon reasonable notice should such need arise, to include
temporary borrowing or copying at his expense.
8. Confidential
Information of DOV.
Xxxxxx
recognizes and agrees that DOV’s confidential information concerning its
business, its clients, prospects and contacts, which includes such things as
client lists, pricing information, financial information and data, business
development plans and strategies, and personnel policies and practices are
valuable, special and unique assets of DOV’s business, access to and knowledge
of which were essential to the performance of Xxxxxx’x duties while employed by
DOV. Xxxxxx represents that he will not disclose such confidential information,
knowledge or data that he obtained during his employment with DOV and that
is
not or does not become public knowledge (other than by acts of Xxxxxx or his
representatives in violation of this Agreement).
9. Confidential
Nature of Agreement.
Xxxxxx
agrees to keep this Agreement and the provisions of this Agreement confidential
prior to any public disclosure by DOV, except that he may disclose the existence
and terms of this Agreement, if necessary, to his tax advisors and attorneys,
to
his immediate family members and as otherwise required by law.
10. Liquidated
Damages.
It is
the parties’ intent to have the promises of confidentiality contained in
Paragraphs 8 and 9 enforced to the fullest extent. Xxxxxx and XXX agree that
money damages could not adequately compensate DOV in the case of a breach or
threatened breach of these promises of confidentiality and that, therefore,
DOV
would be entitled to injunctive relief upon such breach. Xxxxxx agrees that
if a
court finds that he has disclosed the existence or the terms of this Agreement
or disclosed DOV’s confidential information in violation of Paragraphs 8 and 9,
such violation shall constitute and be treated as a material breach of this
Agreement and, in addition, shall cause Xxxxxx to pay DOV total liquidated
damages in the amount of the aggregate separation payments made pursuant to
Paragraph 2, plus the actual attorneys’ fees and related costs incurred by DOV
to enforce Paragraphs 7 and 8 of this Agreement.
11. Non-Disparagement.
The
parties agree that neither will make any oral or written statements to any
person, firm, corporation or other entity that reflects negatively on the other
or on any of DOV’s officers or employees. The parties acknowledge that neither
has and agree that neither will engage in any conduct that is injurious to
the
other’s reputation or interest, including publicly disparaging (or inducing or
encouraging others to publicly disparage) the other. The term “disparage”
includes comments or statements to the press, professional associates, employees
of DOV, or individuals or entities with whom the parties have a relationship
or
potential relationship that would adversely affect in any manner the reputation
of the parties, the reputation of any of DOV’s employees or the conduct of DOV’s
business.
12. No
Admission.
The
parties expressly deny any liability, or violation of any agreement with the
other party or of state, federal, or local laws, regulations or ordinances.
Accordingly, while this Agreement resolves all issues if any between the parties
relating to any liability or violation of any such agreement or state, federal,
or local laws, regulations or ordinances, this Agreement does not constitute
an
adjudication or finding on the merits and is not, and shall not be construed
as,
an admission by the parties of liability or any violation of such agreement
or
of any state, federal, or local laws, regulations or ordinances. Moreover,
neither this Agreement nor anything in this Agreement shall be construed to
be
or shall be admissible in any proceeding as evidence of or an admission by
either party of any liability or violation of such agreement or of any state,
federal, or local laws, regulations or ordinances.
13. Modification.
This
Agreement may be modified or amended only by a written instrument duly signed
by
each of the parties hereto or their respective successors or
assigns.
14. Controlling
Law.
This
Agreement shall be construed in accordance with and governed by the laws of
the
State of New Jersey, without regard to principles of conflict of
laws.
15. Effect
of Voiding or Revocation of Agreement.
Xxxxxx
agrees that if he does not return a signed and dated copy of this Agreement
to
DOV by May 22, 2006 or if he revokes this Agreement prior to the expiration
of
the Revocation Period, the provisions of this Agreement shall be void and of
no
further force and effect. Further, if Xxxxxx receives any compensation from
DOV
after May 5, 2006, and if (i) he fails to execute this Agreement by May 22,
2006, or (ii) he revokes his acceptance of this Agreement prior to the
expiration of the Revocation Period, Xxxxxx agrees that DOV shall have the
right
to collect from him the amount of any such compensation.
16. Entire
Agreement.
This
Agreement constitutes and contains the complete understanding of Xxxxxx and
XXX
with respect to the subject matter addressed in this Agreement, and supersedes
and replaces all prior negotiations and all agreements, whether written or
oral,
concerning the subject matter of this Agreement. This is an integrated document.
17. Severability.
If
any
provision of this Agreement is held invalid, such invalidation shall not affect
other provisions or applications of the Agreement that can be given effect
without the invalid provision or application, and to this end the provisions
of
this Agreement are declared to be severable.
18. Knowing
and Voluntary Waiver.
By his
signature below, Xxxxxx represents that (i) he has been given a reasonable
amount of time to consider this Agreement of not less than twenty-one (21)
days;
(ii) he fully understands the significance of the terms and conditions of this
Agreement and has discussed them with his independent legal counsel, or has
had
a reasonable opportunity to have done so; (iii) he agrees to all the terms
and
conditions of this Agreement including, but not limited to, the releases,
waivers and covenants in Paragraphs 3 through 6; and (iv) he has signed this
Agreement voluntarily and of his own free will, with the full understanding
of
its legal consequences, and with the intent to be bound hereby.
19. Necessary
Amendments to Comply with Section 409A.
The
parties acknowledge that certain payments to be made hereunder may be subject
to
Section 409A of the Code, and that the requirements of Section 409A are still
being developed and interpreted at this time. In the event that (i) Xxxxxx
reasonably determines that there is an ambiguity with respect to any provision
of this Agreement that could cause such provision to be subject to Section
409A,
such ambiguity shall be interpreted and resolved in the manner the parties
agree
to, or (ii) Xxxxxx reasonably determines that any amendment to this Agreement
(including, but not limited to, the timing or form of payment) is necessary
or
appropriate in order to comply with Section 409A or avoid the application of
Section 409A entirely, the parties agree to make such amendments, on a
prospective or retroactive basis, provided that any such change shall be made
in
a manner that ensures, to the maximum extent reasonably possible, that Xxxxxx
is
not adversely affected by such change.
IN
WITNESS WHEREOF,
the
parties to this Agreement, intending to be legally bound, have caused this
Agreement to be executed on the dates indicated below.
| DOV Pharmaceutical, Inc. | ||
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/s/
J. Xxxxxx Xxxxxx
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By: /s/ Xxxxxx Xxxxxx | |
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J.
Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx | |
| Date: May 4, 2006 | Title: President and CEO | |
| Date: May 4, 2006 |
