1
EXHIBIT 10.1
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release ("Agreement") is being entered
into as of July 30, 1999, by and between Janet M. Walter ("Employee") and Aronex
Pharmaceuticals, Inc. ("Aronex") in order to further the mutually desired terms
and conditions set forth herein:
WHEREAS, Employee has notified Aronex of her desire to voluntarily
resign as an employee and officer of Aronex and Aronex desires to accept such
resignation; and
WHEREAS, the parties desire to execute and deliver this Agreement to
evidence the terms of the parties' agreement concerning the Employee's
resignation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the receipt and sufficiency are hereby acknowledged,
the parties do hereby agree as follows:
1. RESIGNATION. Employee hereby voluntarily resigns as an
employee and officer of Aronex effective as of July 13, 1999 (the "Effective
Date of Resignation").
2. SEVERANCE.
(a) For and in consideration of the execution of this
Agreement, Aronex will, subject to the terms set forth
herein, pay to Employee a total payment of $160,000.00
("Severance Payment"), less standard deductions. The
Severance Payment shall be paid in twenty-four (24)
semimonthly payments of $6,666.66, subject to standard
deductions, for the period beginning as of July 16,
1999 and continuing through July 15, 2000, payable as
and when Employee would have otherwise received her
salary. The obligation of Aronex to pay, and the
Employee's right to receive, the Severance Payment
herein provided shall not terminate upon the
Employee's commencement of employment with another
employer.
(b) In addition to the foregoing, and in further
consideration of the execution of this Agreement,
Aronex does hereby agree to amend the terms of those
three (3) certain stock options previously granted by
Aronex to Employee as follows:
(i) That certain Non-Qualified Stock Option
Agreement dated August 18, 1997, for 13,610
shares of the Company's common stock, par
value $.001 per share (the "Common Stock")
and that certain Incentive Stock Option
Agreement dated August 18, 1997, for 86,390
shares of Common Stock are each hereby
amended to allow, under Section 4 of each
such agreement, the exercise of the vested
portions of the options evidenced thereby for
a period of up to ninety (90) days following
the Effective Date of Resignation.
1 of 7 pages
2
(ii) That certain Non-Qualified Stock Option
Agreement dated December 10, 1998 for 50,000
shares of the Company's Common Stock (the
"'98 Option Agreement") is hereby amended as
follows:
(A) The option evidenced by the '98 Option
Agreement shall, subject to the terms of this
Agreement, be fully vested and exercisable as
of the Effective Date of Resignation.
(B) The '98 Option Agreement is amended to
allow, under Section 4 thereof, the exercise
of the option evidenced thereby for a period
of up to ninety (90) days following the
Effective Date of Resignation.
In all other respects, the terms and provisions of the
above described Stock Option Agreements shall remain
in full force and effect as originally written.
(c) The Employee and Aronex hereby stipulate and agree
that as of the effective date of this Agreement and
after giving effect to the amendments in Paragraph
1(a) above, the number of shares of Common Stock
vested, and which may be acquired upon the exercise of
such options, shall be as follows:
(i) Non-Qualified Stock Option Agreement dated
August 18, 1997 -- 13,610 shares;
(ii) Incentive Stock Option Agreement dated August
18, 1997 -- 49,077 shares; and
(iii) Non-Qualified Stock Option Agreement dated
December 10, 1998 -- 50,000 shares.
(d) Except as provided in Paragraph 3 below, the Severance
Payment and the amendments of the above described
Stock Option Agreements represent the exclusive
consideration given by Aronex in connection with or
arising out of the termination of Employee's
employment with Aronex, and no further amounts or
other consideration shall be required for any items,
including, but not limited to, attorneys' fees.
3. RELEASE.
(a) Employee, on behalf of herself, her heirs,
beneficiaries and personal representatives hereby
releases, acquits and forever discharges Aronex, its
officers, employees, former employees, shareholders,
directors, partners, agents and assigns, and all other
persons, firms, partnerships, or corporations in
control of, under the direction of, or in any way
presently or formerly associated with Aronex, of and
from all claims, charges, complaints, liabilities,
obligations, promises, agreements, contracts, damages,
actions,
2 of 7 pages
3
causes of action, suits, accrued benefits or other
liabilities of any kind or character, whether known or
hereafter discovered, arising from or in any way
connected or related with employment with Aronex, her
resignation and termination of employment with Aronex,
including, but not limited to, allegations of wrongful
termination, breach of contract (other than in
connection with this Agreement), intentional
infliction of emotional distress, negligent infliction
of emotional distress, defamation, invasion of
privacy, any action in tort or contract, any violation
of any federal, state, or local law, (including, but
not limited to, and violation of Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C.
Section 2000e et seq., the Civil Rights Act of 1866,
42 U.S.C. Section 1981 et seq., the Equal Pay Act, 29
U.S.C. Section 206; the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") 29 U.S.C.
Section 1001 et seq., the Americans with Disabilities
Act, 42 U.S.C. Section 12101 et seq., the Age
Discrimination Employment Act of 1967, as amended
("ADEA"), 29 U.S.C. Section 621 et seq., the Fair
Labor Standards Act, as amended, 29 U.S.C. Section 201
et seq., the National Labor Relations Act, 29 U.S.C.
Sections 151 et seq., the Family and Medical Leave Act
of 1993, 29 U.S.A. Section 2601 et seq., the Worker
Adjustment and Retraining Notification Act (WARN), 29
U.S.C., Section 2101 et seq., the Texas Commission on
Human Rights Act, Texas Labor Code Section 21.001 et
seq., the Texas Payday Act, Texas Labor Code, Section
61.01 et seq., the Texas Workers' Compensation
Statute, Texas Labor Code Section 451.0001 et seq.,
and any other employment or civil rights act and,
except as provided below, any and all claims for
severance pay or benefits under any compensation or
employee benefit plan, program, policy, contract,
agreement or other arrangement of Aronex.
Notwithstanding the foregoing, for so long as Employee
shall continue to be eligible to receive benefits
under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA"), the Employee shall be entitled
to receive benefits under the then existing medical,
dental and vision employee benefit plans maintained by
Aronex. Aronex shall pay all premiums for such
medical, dental and vision benefit plans while
Employee is entitled to receive such benefits under
COBRA. Employee acknowledges and agrees that Employee
shall not be permitted to participate in, and Aronex
shall have no obligation to provide, any coverage
under any disability or life insurance plans
maintained by Aronex for the benefits of its
employees.
(b) Employee agrees not to commence any legal proceeding
or lawsuit against Aronex arising out of or based upon
employment with Aronex or the termination of
employment with Aronex.
(c) The consideration cited above and the promises
contained herein are made for the purpose of
purchasing the peace of Aronex and Employee and are
not to be construed as an admission of liability or as
evidence or unlawful conduct by Aronex or any of its
affiliates, all liability being expressly denied.
(d) Employee voluntarily accepts the consideration cited
herein as sufficient payment for the full, final and
complete release stated herein and agrees that
3 of 7 pages
4
no other promises or representations have been made by
Aronex or any other person purporting to act on behalf
of Aronex, except as expressly stated herein.
(e) Employee understands that this is a full, complete,
and final release of Aronex. As evidenced by the
signature below, Employee expressly promises and
represents to Aronex that she has completely read this
Agreement and understand its terms, contents,
conditions, and effects.
(f) Employee hereby waives all rights to recall,
reinstatement, reemployment and past or future wages
from Aronex and any affiliate thereof 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 of affiliate thereof, including without
limitation, any profits, bonus or commission
arrangement, and any other employment agreement
(whether written or oral) with Aronex, except as may
otherwise may be required by ERISA, COBRA or otherwise
expressly set forth in Paragraph 3(a) above.
4. CONFIDENTIALITY.
(a) For a period of three (3) years from the date of this
Agreement, Employee hereby agrees to hold and maintain
confidential and private in trust for the benefit of
Aronex and its affiliates all secret, confidential or
proprietary information of Aronex and/or its
affiliates including, without limitation, all
information pertaining to the research, design,
development, manufacture and sales of Aronex's
products including, without limitation, the findings,
reports, inventions, discoveries, developments,
improvements and confidential sales information,
pricing, terms and related data disclosed to Employee
by Aronex or any affiliate thereof or written,
invented or made or conceived by Employee in
connection with her employment by Aronex. Confidential
information shall not include any information which
(i) is, or lawfully becomes, generally available to
the public without fault of Employee, or (ii) is
independently developed, as shown by clear, convincing
written evidence, by Employee prior to the receipt of
any confidential information, (iii) is lawfully
obtained or acquired by Employee in good faith from a
third party other than a party furnishing the
information to Aronex, who has such information in
good faith and not under any confidentiality agreement
with any other party with respect to such information,
(iv) is in Employee's possession at the time of
disclosure other than as a result of Employee's breach
of any legal obligation, or (v) is required to be
disclosed by Employee to comply with the applicable
laws or governmental requirements, provided that
Employee provides prior written notice of such
disclosure to Aronex.
(b) Employee agrees to hold and maintain confidential and
not disclose to any third party the terms and
conditions of this Agreement including, without
4 of 7 pages
5
limitation, the Severance Payment and other
consideration provided for by this Agreement;
provided, however, that the foregoing shall not apply
to any disclosure that may be required to the extent
compelled by legal process or necessary to enforce the
Employee's rights hereunder.
5. NON-DISPARAGEMENT. Employee agrees not to communicate or
disseminate to others, whether verbally, in writing or in any
other form, any derogatory, negative or intentionally damaging
statements regarding Aronex, its affiliates, its officers,
directors, employees, policies or practices. Aronex agrees not
to communicate or disseminate to others, whether verbally, in
writing or in any other form, any derogatory, negative or
intentionally damaging statements regarding Employee.
6. NO ASSIGNMENT OF CLAIMS. Employee hereby warrants that she 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.
7. REPRESENTATIONS AND WARRANTIES CONCERNING RELEASE. Employee
hereby warrants to Aronex that she has completely read this
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 Agreement knowingly and voluntarily.
Employee understands that she has the right to consult an
attorney of her choice and represents that she has consulted
with an attorney or she has knowingly decided not to do so.
Employee states that she is not presently affected by any
disability which would prevent him from knowingly and
voluntarily executing this Agreement, and further states that
the promises made herein are not made under duress, coercion
or undue influence.
8. DEFAULT. In the event of a breach by the Employee of the
provisions of Paragraphs 4 and 5 of this Agreement, Aronex
shall be entitled to an injunction restraining the Employee
from using or disclosing, for her benefit or for the benefit
of others, in whole or in part, any confidential information
or otherwise making any derogatory, negative or damaging
statements regarding Aronex or its affiliates. In addition,
upon any such breach of Paragraphs 4 or 5 of this Agreement,
(i) Aronex's obligations to make any Severance Payment as
called for by this Agreement shall cease and Aronex shall have
no further liability or obligation to make any Severance
Payment to Employee as otherwise required under the terms of
Paragraph 1 of this Agreement, and (ii) the accelerated
vesting of the options evidenced by the '98 Option Agreement
shall no longer be effective and the Employee shall only be
permitted to exercise such '98 Option Agreement to the extent
vested as of the Effective Date of Resignation. In addition to
the foregoing, upon any such breach Aronex shall be permitted
to pursue any and all other remedies otherwise available to
Aronex for such breach including, without limitation, the
recovery of damages from the Employee.
5 of 7 pages
6
9. AMENDMENT. This 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 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 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 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 affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu
of such illegal, invalid or unenforceable provision, there
shall be added automatically, as part of this 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 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 Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of Texas.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the
subject matter of this 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 Agreement.
15. MULTIPLE COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an
original and, when taken together, shall constitute one
agreement which shall be binding upon and effective as to all
parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the date first above written.
EMPLOYEE:
/s/ Janet M. Walter
-----------------------------------------
Janet M. Walter
6 of 7 pages
7
ARONEX PHARMACEUTICALS, INC.
By: /s/ Geoffrey F. Cox
--------------------------------------
Name: Geoffrey F. Cox
------------------------------------
Title: Chairman and CEO
-----------------------------------
7 of 7 pages