EMPLOYMENT TERMINATION AND SEVERANCE AGREEMENT
THIS EMPLOYMENT TERMINATION AND SEVERANCE AGREEMENT (this "Termination
Agreement") is entered into as of January 15, 1998, by and between Aronex
Pharmaceuticals, Inc. ("Aronex"), and James M. Chubb, an individual residing at
183 Bristol Bend Circle, The Woodlands, Texas 77382 ("Employee").
WHEREAS, Aronex and Employee have previously entered into an Amended
and Restated Employment Agreement dated January 15, 1996 (the "Employment
Agreement");
WHEREAS, Employee intends to resign from his employment with Aronex
effective January 15, 1998 (the "Effective Date "); and
WHEREAS, Aronex and Employee now wish to terminate the Employment
Agreement and release each other from any claims arising thereunder effective
upon the Effective Date;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Termination. The Employment Agreement is terminated effective as of
the Effective Date and none of the parties shall have any further rights or
obligations thereunder after the Effective Date except as expressly specified
herein.
2. Severance. For and in consideration of Employee's execution of this
Termination Agreement, Aronex will, subject to the further provisions of this
Termination Agreement, (i) pay Employee monthly payments of $19,583 (Employee's
current Base Salary) for the period beginning as of January 15, 1998 and
continuing through January 15, 1999, payable as and when Employee would
otherwise be paid his salary under Section 4.1 of the Employment Agreement
(collectively, the "Severance Payments"), (ii) continue to pay through January
15, 1999 the premiums required for Employee's continued coverage under (A) the
Company's group medical and dental plans for Employee and Employee's family, (B)
the disability insurance presently maintained by the Company for the benefit of
Employee and (C) the life insurance presently maintained by the Company for the
benefit of Employee and Employee's beneficiaries, (iii) provide Employee with
basic outplacement services (consisting of office space and administrative
assistance) through Lee Hecht Harrison or a reasonably equivalent outplacement
services provider selected by Aronex, (iv) continue to pay Employee's regular
annual membership dues to maintain Employee's membership at The Woodlands
Country Club through January 15, 1999, (v) extend (and hereby does extend) the
period during which options granted to Employee under Aronex's Amended and
Restated 1989 Stock Option Plan (the "Plan") may vest until January 31, 2000,
with the same effect under the terms of such options as if Employee remained an
employee of Aronex through such date, and (vi) extend (and hereby does extend)
the period during which Employee may exercise options granted to Employee under
the Plan, to the extent such options are vested as of the Effective Date or
become vested pursuant to the preceding clause of this Termination Agreement,
until February 28, 2000. The Severance Payments shall not be subject to any
reduction or right of offset as a result of Employee's employment by another
entity during the term of this Termination Agreement, and the Severance Payments
and the benefits contemplated by clause (ii) above shall not be subject to any
reduction or right of offset as a result of Employee's death or disability,
provided in each such case that Employee has complied with the terms of Section
3 hereof and the terms of Section 5 hereof and the agreements referenced therein
(insofar as such terms of Section 5 and the agreements referenced therein relate
to Employee's obligations regarding confidentiality, nondisclosure and
inventions).
3. Release of Aronex by Employee. (a) Employee, on behalf of himself,
his heirs, beneficiaries and personal representatives, hereby releases, acquits
and forever discharges Aronex, its of officers, employees, former employees,
stockholders, directors, agents and assigns, and all other persons, firms or
corporations in control of, under the direction of, or in any way associated
with Aronex (collectively, the "Aronex Affiliates"), of and from all claims,
charges, complaints, liabilities, obligations, promises, agreements, contracts,
damages, actions, causes of action, suits, accrued benefits or other liabilities
of any kind or character, whether known or hereafter discovered, arising from,
growing out of, or in any way connected with or related to Employee's employment
with, and/or termination of employment from, Aronex and the Aronex Affiliates,
including, but not limited to, allegations of wrongful termination,
discrimination, breach of contract, intentional infliction of emotional
distress, invasion of privacy, promissory estoppel, whistleblowing, fraud,
termination for refusal to perform an illegal act, defamation, any action in
tort or contract, any action for unpaid wages, attorney's fees, or punitive
damages, and any violation of any federal, state, or local law, including but
not limited to, any violation of Title VII of the Civil Rights Acts of 1964 and
1991, as amended, 42 U.S.C. 2000e et seq., the Civil Rights Act of 1866, 42
U.S.C. 1981 et seq., the Equal Pay Act, 29 U.S.C. 206, the Employee Retirement
Income Security Act of 1974, as amended (ERISA), 29 U.S.C. 1001 et seq., the
Americans with Disabilities Act, 42 U.S.C. 12101 et. seq., the Fair Labor
Standards Act, as amended, 29 U.S.C. 621 et seq., the Age Discrimination in
Employment Act, as amended, 29 U.S.C. 621 et seq., the Family and Medical Leave
Act of 1993, 29 U.S.C. 2601 et seq., the Worker Adjustment and Restraining
Notification Act (WARN), 29 U.S.C. 2101 et seq., the Texas Commission on Human
Rights Act, as amended, Texas Labor Code 21.001 et seq., the Texas Payday Act,
Texas Labor Code 61.001 et seq., the Texas Workers' Compensation Statute, Texas
Labor Code 451.001 et seq. and any other civil rights act, and all amendments
made to any such laws from time to time, provided that the foregoing release
shall not apply to the express obligations of Aronex under this Termination
Agreement.
(b) Employee agrees not to commence any legal proceeding or lawsuit
against Aronex or any Aronex Affiliate arising out of or based upon Employee's
employment with Aronex or any Aronex Affiliate or because of the termination of
Employee's employment with Aronex or any Aronex Affiliate.
(c) The consideration cited above and the promises contained herein
are made for the purpose of purchasing the peace of Aronex and the Aronex
Affiliates and are not to be construed as an admission of liability or as
evidence of unlawful conduct by Aronex or any Aronex Affiliate, all such
liability being herein expressly denied.
(d) Employee voluntarily accepts the Severance Payments as sufficient
payment for the full, final and complete release stated herein, and agrees that
no other promises or representations have been made to Employee by Aronex or an
Aronex Affiliate or any other person purporting to act on the behalf of Aronex
or an Aronex Affiliate, except as expressly stated herein.
(e) Employee understands that this is a full, complete, and final
release of Aronex and the Aronex Affiliates. As evidenced by the signature
below, Employee expressly promises and represents to Aronex and the Aronex
Affiliates that he has completely read this Agreement and understands its terms,
contents, conditions, and effects. Employee stipulates and agrees that Aronex
and Aronex Affiliates do not owe Employee anything in addition to what Employee
will be receiving pursuant to Section 2 of this Termination Agreement.
(f) Employee hereby waives all rights to recall, reinstatement,
reemployment and past or future wages from Aronex and the Aronex Affiliates and
further, acknowledges that Employee is not entitled to any continued
participation in, or benefits under, any employee benefit plan or compensation
program of Aronex or any Aronex Affiliate, including, without limitation, any
profit, bonus or commission arrangement, the Plan, the Employment Agreement and
any other employment agreement (whether written or oral) with the Company,
except as may otherwise be required by ERISA or as otherwise expressly set forth
herein.
4. Release of Employee by Aronex. Aronex, on behalf of itself and the
Aronex Affiliates, hereby releases, acquits and forever discharges Employee, his
heirs, beneficiaries and personal representatives, of and from all claims,
charges, complaints, liabilities, obligations, promises, agreements, contracts,
damages, actions, causes of action, suits, accrued benefits or other liabilities
of any kind or character, whether known or hereafter discovered, arising from,
growing out of, or in any way connected with or related to Employee's employment
with, and/or termination of employment from, Aronex and the Aronex Affiliates,
provided that the foregoing release shall not apply to the express obligations
of Employee under this Termination Agreement or as contemplated by Section 5
below.
5. Acknowledgment of Remaining Obligations Under Employment Agreement.
Employee acknowledges that he is subject to agreements regarding
confidentiality, nondisclosure, inventions and noncompetition pursuant to the
provisions of Sections 8 and 9 of the Employment Agreement and the
confidentiality and non-disclosure agreement referenced therein, which
provisions and obligations remain in full force and effect following this
Termination Agreement.
6. Statements to Third Parties. Aronex agrees that it will not make
any statements to third parties which are intended to disparage, discredit or
injure the reputation of Employee. Employee agrees that he will not make any
statements to third parties which are intended to disparage, discredit or injure
the reputation of Aronex or any Aronex Affiliate.
7. No Assignment of Claims. Employee hereby warrants that he has not
assigned, transferred or conveyed at any time to any individual or entity any
alleged right, claim or cause of action against Aronex or any Aronex Affiliate.
Employee agrees to and does hereby indemnify and hold Aronex and the Aronex
Affiliates harmless from any claims, liabilities, damages, demands, losses,
costs, debts and causes of action whatsoever, including without limitation
attorney's fees, whether known or unknown, which may be asserted by parties for
breach of the foregoing warranty.
8. No Duress, Etc. Employee hereby warrants to Aronex that he has
completely read this Termination Agreement prior to executing it, and has had a
reasonable period of time within which to consider this Agreement and to
understand its terms, contents, conditions and effects and has entered into this
Termination Agreement knowingly and voluntarily. Employee understands that he
has the right to consult an attorney of his choice and represents that he has
consulted with an attorney. Employee states that he is not presently affected by
any disability which would prevent him from knowingly and voluntarily executing
this Termination Agreement, and further states that the promises made herein are
not made under duress, coercion or undue influence. Employee understands that
Employee has twenty-one days within which to consider and execute this
Agreement, and that this Agreement is revocable by Employee for a period of
seven days following the date of execution of this Agreement, and if not so
revoked, this Agreement will automatically become effective and enforceable on
the eighth day following the date of its execution.
9. Amendment. This Termination Agreement may not be amended or
modified in any respect except by an agreement in writing executed by the
parties in the same manner as this Agreement.
10. Successors. This Termination Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by each of the parties and
their respective successors and assigns.
11. Invalid Provisions. If any provision of this Termination Agreement
is held to be illegal, invalid or unenforceable under present or future law
effective during the term hereof, such provision shall be fully severable. This
Termination Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof and the
remaining portions hereof shall remain in full force and effect and shall not be
effected by the illegal, invalid or unenforceable provision or by its severance
here from. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically, as part of this Termination
Agreement, a provision similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
12. Descriptive Headings. The descriptive headings of the several
sections of this Termination Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
13. Governing Law. This Termination Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas.
14. Entire Agreement. This Termination Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
of this Termination Agreement and supersedes and is in full substitution for any
and all prior agreements and understandings whether written or oral between said
parties relating to the subject matter of this Termination Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Termination
Agreement effective as of the date first above written.
EMPLOYEE:
James M. Chubb
ARONEX PHARMACEUTICALS, INC.
By:
Geoffrey Cox
Chairman of the Board and
Chief Executive Officer