SEPARATION AND RELEASE AGREEMENT
Exhibit 99.2
EXECUTION VERSION
This Separation and Release Agreement (the “Agreement”), by and between Emisphere
Technologies, Inc., a Delaware corporation (the “Company”), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual residing at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇▇▇▇”), is
executed as of the Execution Date (as defined on the signature page hereto) and shall be in full
force and effect as of the Execution Date.
WHEREAS, ▇▇▇▇▇▇▇▇ and Company desire to reach a mutual understanding and acceptance of the
terms and conditions related to ▇▇▇▇▇▇▇▇’▇ separation from employment with Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained it is
hereby agreed as follows:
1. Separation. ▇▇▇▇▇▇▇▇ shall cease to serve as President, Chief Executive Officer
and Director of the Company as of the Execution Date and shall execute and deliver a letter of
resignation to the Company, which shall be dated as of the Execution Date and shall be in the form
attached hereto as Exhibit A (the “Resignation Letter”).
2. Accrued Benefits. The Company will pay to ▇▇▇▇▇▇▇▇ the following accrued but
unpaid benefits net of all other withholdings required by law and applicable federal and state
taxes (such payment, the “Accrued Benefit Payment”):
| (a) | $300,000, which represents ▇▇▇▇▇▇▇▇’▇ accrued but unpaid bonus awards; plus | ||
| (b) | $28,205.13, which represents ▇▇▇▇▇▇▇▇’▇ accrued but unpaid vacation benefits through February 28, 2011. |
The Company shall pay to ▇▇▇▇▇▇▇▇ the Accrued Benefit Payment in a lump sum cash payment. The
Accrued Benefit Payment will be paid on the next regularly scheduled payroll date following the
expiration of the seven-day revocation period set forth in Section 8 herein. For the
avoidance of doubt, the parties agree that ▇▇▇▇▇▇▇▇ (i) has been paid all accrued base salary owed
to him through February 28, 2011 and, accordingly, shall not be entitled to any additional payments
in respect of his base salary; and (ii) shall not be entitled to any bonus payment for fiscal year
2010 or fiscal year 2011.
3. COBRA Coverage. If ▇▇▇▇▇▇▇▇ elects COBRA coverage for health and/or dental
insurance in a timely manner, the Company shall pay the Company’s current share of the monthly
premium, as in effect on the Execution Date, when each premium payment is due until the earlier of:
(i) eighteen (18) months from the Execution Date; (ii) the date ▇▇▇▇▇▇▇▇ obtains new employment
which offers health and/or dental insurance that is reasonably comparable to that offered by the
Company; (iii) the date COBRA coverage would otherwise terminate in accordance with the provisions
of COBRA; or (iv) the date upon which the Company determines
▇▇▇▇▇▇▇▇ is violating, has violated or otherwise breaches any of the terms and/or conditions
set forth in this Agreement, (the “COBRA Continuation Period”), ▇▇▇▇▇▇▇▇ hereby agrees and
acknowledges that if, during the COBRA Continuation Period set forth above, if it has been
adjudicated that he has violated or otherwise breached any of the terms and/or conditions of the
Non-Competition Agreement (as defined in Section 17) or this Agreement, then he shall
return and pay back to the Company all monies constituting the Company’s share of the monthly
premium paid on ▇▇▇▇▇▇▇▇’▇ behalf during the COBRA Continuation Period.
4. Equity Incentives/ Benefits. The Company and ▇▇▇▇▇▇▇▇ agree and acknowledge that
▇▇▇▇▇▇▇▇ owns incentive stock options to purchase an aggregate of 1,600,000 shares of common stock
of the Company (the “Option Shares”), all of which were granted pursuant to the terms and
conditions of the governing stock option agreement (collectively, the “Option Agreements”)
and the applicable stock option or equity incentive plans. As of the Execution Date, (a) 1,500,000
shares of the Option Shares have vested under the applicable Option Agreements (such vested shares,
the “Vested Option Shares”), and (b) 100,000 shares of the Option Shares remain unvested
under the applicable Option Agreements (such unvested shares, the “Unvested Option
Shares”).
Notwithstanding the terms and conditions set forth in the Option Agreements relating to the
Option Shares, (a) the Vested Option Shares shall be exercisable by ▇▇▇▇▇▇▇▇ until April 6, 2012,
and (b) the Unvested Option Shares shall continue to vest in accordance with the vesting schedule
set forth in the applicable Option Agreements; provided, however, that if ▇▇▇▇▇▇▇▇ violates or
otherwise breaches any of the terms and/or conditions set forth in the Non-Competition Agreement or
this Agreement, then all Vested Option Shares and Unvested Option Shares shall be immediately and
irrevocably forfeited and terminated. Any Unvested Option Shares that vest after the Execution
Date in accordance with the vesting schedule set forth in the applicable Option Agreements and this
Section 4 shall be exercisable by ▇▇▇▇▇▇▇▇ until April 6, 2012.
5. Consulting Services. For a period of eighteen (18) months after the Execution Date
and at the reasonable request of the Company, ▇▇▇▇▇▇▇▇ hereby agrees to provide consulting services
to the Company solely through inquiries by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or another designated member of the Board
of Directors of the Company. Such consulting services shall be requested by the Company upon
reasonable notice thereof and provided by ▇▇▇▇▇▇▇▇ at reasonable times. All expenses relating from
such services will be the responsibility of the Company.
6. No Consideration Absent Execution of this Agreement. ▇▇▇▇▇▇▇▇ understands and
agrees that he would not receive the COBRA continuation benefits set forth in Section 3 or the
accelerated Equity Incentive benefits set forth in Section 4 except for ▇▇▇▇▇▇▇▇’▇ execution of
this Agreement and the fulfillment of the promises contained herein.
7. General Release of Claims. ▇▇▇▇▇▇▇▇, for himself and for his representatives,
heirs, successors and assigns, specifically releases, remises and forever discharges the Company
and its past or present parent corporations or entities, affiliates, divisions, subsidiaries,
shareholders, directors, any affiliates of its shareholders or directors, legal representatives,
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successors and assigns and each of the respective former and present employees, officers,
directors, members, managers, partners, consultants, experts, attorneys, agents, representatives,
benefit plans, benefit plan sponsors, benefit plan administrators, subsidiaries, parent companies,
successors, assigns, and affiliates of any of the foregoing (collectively, the “Released
Parties”) from any and all claims of any nature, known or unknown, foreseen or unforeseen,
accrued or unaccrued, whether common law claims or statutory claims, in law or in equity, arising
from ▇▇▇▇▇▇▇▇’▇ relationship with the Company, including but not limited to:
(a) Claims under any state or federal discrimination, fair employment practices or other
employment related statute, or regulation (as they may have been amended through the date of this
Agreement) prohibiting discrimination or harassment based upon any protected status including,
without limitation, race, color, religion, national origin, age, gender, marital status,
disability, handicap, veteran status or sexual orientation; without limitation, specifically
included in this paragraph are any claims arising under the Federal Rehabilitation Act of 1973, Age
Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act,
Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Equal Pay
Act, the Americans With Disabilities Act and any similar federal, state or local statute or
ordinance;
(b) Claims under any other state or federal employment related statute, or regulation (as they
may have been amended through the date of this Agreement) relating to wages, hours or any other
terms and conditions of employment; without limitation, specifically included in this paragraph are
any claims arising under the Fair Labor Standards Act, the Family and Medical Leave Act of 1993,
the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the New York Human Rights Law, the
New York Labor Law, the New York Whistleblower Protection Law, the New York Wage and Hour Laws, and
any similar federal, state or local statute or ordinance;
(c) Claims under any state or federal common law theory including, without limitation,
wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment,
breach of a covenant of good faith and fair dealing, violation of public policy, defamation,
interference with contractual relations, intentional or negligent infliction of emotional distress,
invasion of privacy, misrepresentation, deceit, fraud or negligence; and
(d) Any other claim arising under state or federal law, including but not limited to, the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
8. Older Workers Benefit Protection Act. This paragraph is intended to comply with
the Older Workers Benefit Protection Act of 1990 (“OWBPA”) with regard to ▇▇▇▇▇▇▇▇’▇ waiver
of rights under the Age Discrimination in Employment Act of 1967 (“ADEA”):
(a) ▇▇▇▇▇▇▇▇ is specifically waiving rights and claims under ADEA;
(b) The waiver of rights under ADEA does not extend to any rights or claims arising after the
date this Agreement is signed by ▇▇▇▇▇▇▇▇;
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(c) ▇▇▇▇▇▇▇▇ acknowledges receiving consideration for this waiver;
(d) ▇▇▇▇▇▇▇▇ acknowledges that he has been advised to consult with an attorney before signing
this Agreement; and
(e) ▇▇▇▇▇▇▇▇ acknowledges that after receiving a copy of this Agreement, ▇▇▇▇▇▇▇▇ has the
right to take up to 21 days to consider his decision to sign this Agreement; the parties agree that
changes, whether material or immaterial, do not restart the running of the 21 day period.
▇▇▇▇▇▇▇▇ may revoke his release of claims solely with respect to ADEA claims within a period
of seven (7) days after execution of this Agreement. ▇▇▇▇▇▇▇▇ agrees that any such revocation is
not effective unless it is made in writing and delivered to Emisphere Technologies, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, by the seventh
(7th) calendar day after execution of this Agreement. This Agreement as it applies to ADEA claims
becomes effective on the eight (8th) calendar day after it is executed, at which time ▇▇▇▇▇▇▇▇’▇
release of all ADEA claims will be final, binding, enforceable, and irrevocable. This Agreement as
it applies to claims other than ADEA claims becomes effective upon execution of this Agreement at
which time ▇▇▇▇▇▇▇▇’▇ release of all claims other than ADEA claims will be final, binding,
enforceable, and irrevocable.
9. Acknowledgments and Affirmations. ▇▇▇▇▇▇▇▇ further represents and warrants that
he has not filed or participated in the filing of any complaint, grievance, charge or claim with or
before any local, state or federal agency or board, union or any court or other tribunal relating
to the Company or ▇▇▇▇▇▇▇▇’▇ employment with, or the termination of, his employment with the
Company and its affiliates. Nothing contained herein is intended to nor shall prohibit ▇▇▇▇▇▇▇▇
from (i) filing a charge or complaint with or from participating in an investigation or proceeding
conducted by the Equal Employment Opportunity Commission (“EEOC”); or (ii) participating in
any investigation or proceeding conducted by the EEOC. In the event ▇▇▇▇▇▇▇▇ files a charge with
the EEOC, ▇▇▇▇▇▇▇▇ waives and releases the right to recover any damages in any claim or suit
brought by or through the EEOC or any state or local agency on ▇▇▇▇▇▇▇▇’▇ behalf.
▇▇▇▇▇▇▇▇ also affirms that he has been paid and/or has received all compensation, wages,
bonuses, commissions, and/or benefits to which he may be entitled. ▇▇▇▇▇▇▇▇ affirms that he has
been granted any leave to which he was entitled under the Family and Medical Leave Act or related
state or local leave or disability accommodation laws.
▇▇▇▇▇▇▇▇ further affirms that he has no known workplace injuries or occupational diseases.
▇▇▇▇▇▇▇▇ also affirms that he has not divulged any proprietary or confidential information of
the Company and will continue to maintain the confidentiality of such information consistent with
the Company’s policies and ▇▇▇▇▇▇▇▇’▇ agreement(s) with the Company and/or common law.
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▇▇▇▇▇▇▇▇ further affirms that he has not been retaliated against for reporting any allegations
of wrongdoing by the Company or its officers, including any allegations of corporate fraud. Both
parties acknowledge that this Agreement does not limit either party’s right, where applicable, to
file or participate in an investigative proceeding of any federal, state or local governmental
agency. To the extent permitted by law, ▇▇▇▇▇▇▇▇ agrees that if such an administrative claim is
made, ▇▇▇▇▇▇▇▇ shall not be entitled to recover any individual monetary relief or other individual
remedies. ▇▇▇▇▇▇▇▇ agrees not to re-apply for employment with the Released Parties in the future.
10. Return of Property. ▇▇▇▇▇▇▇▇ affirms that he has returned all of the Company’s
property, documents, and confidential information in his possession or control. ▇▇▇▇▇▇▇▇ must
provide in writing all valid passwords for all of the systems and devices that ▇▇▇▇▇▇▇▇ manages,
return any software products, tools, or technologies that had been provided to ▇▇▇▇▇▇▇▇ during the
course of employment together with the required software keys or passwords. ▇▇▇▇▇▇▇▇ shall not
destroy or constrain access in any way to work related files, lap tops, computers, systems etc.
that ▇▇▇▇▇▇▇▇ has worked with or has been provided to ▇▇▇▇▇▇▇▇ during the course of employment.
▇▇▇▇▇▇▇▇’▇ personal belongings, as identified by him, shall be boxed up by his executive
assistant and forwarded to his home address upon execution of this Agreement or sooner. Upon
receipt of his personal belongings, ▇▇▇▇▇▇▇▇ affirms that he is in possession of all of the
property that ▇▇▇▇▇▇▇▇ had at the Company’s premises and that the Company is not in possession of
any of ▇▇▇▇▇▇▇▇’▇ property. The Company agrees that ▇▇▇▇▇▇▇▇ shall receive reimbursement for all
appropriate business expenses through his final day of employment.
11. Governing Law and Interpretation. This Agreement shall be governed and conformed
in accordance with the laws of the state of New Jersey without regard to its conflict of laws
provision. In the event of a breach of any provision of this Agreement, either party may institute
an action specifically to enforce any term or terms of this Agreement or to seek any damages for
breach. Should any provision of this Agreement be declared illegal or unenforceable by any court
of competent jurisdiction and cannot be modified to be enforceable, excluding the general release
language, such provision shall immediately become null and void, leaving the remainder of this
Agreement in full force and effect.
12. Nonadmission of Wrongdoing. The parties agree that neither this Agreement nor the
furnishing of the consideration for this Agreement shall be deemed or construed at any time for any
purpose as an admission by Released Parties or ▇▇▇▇▇▇▇▇ of wrongdoing or evidence of any liability
or unlawful conduct of any kind.
13. Amendment. This Agreement may not be modified, altered or changed except in
writing and signed by both parties wherein specific reference is made to this Agreement.
14. Non-Disparagement; Non-Communication. ▇▇▇▇▇▇▇▇ and the Company hereby agree that
they will refrain from making any derogatory or false statements with respect to ▇▇▇▇▇▇▇▇ or the
Company and/or any of its officers, directors, employees, advisors, customers,
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shareholders or other related or affiliated parties or any other Released Parties. ▇▇▇▇▇▇▇▇ further
agrees that he will not communicate or otherwise contact any of the Company’s (a) shareholders, (b)
current or former employees or (c) current or prospective strategic and/or business partners
concerning matters relating to or affecting the Company, except as may be agreed to by ▇▇▇▇▇▇▇
▇▇▇▇▇▇ or another designee of the Board of Directors of the Company. ▇▇▇▇▇▇▇▇ may, however,
provide factual information about his professional accomplishments and tasks performed while
employed by the Company in communications with prospective employers, consistent with his
obligations under this Agreement, the Non-Competition Agreement and any other applicable
contractual or legal obligations.
15. Form 8-K Disclosure. The Company and ▇▇▇▇▇▇▇▇ hereby acknowledge and agree that
the Company is obligated to file and, accordingly, shall file a Current Report on Form 8-K with the
Securities and Exchange Commission (the “Form 8-K”). The Form 8-K shall be filed within
four business days after the Execution Date. The Form 8-K shall report, under Item 5.02(b), that
▇▇▇▇▇▇▇▇ and the Company, through its Board of Directors, have mutually agreed not to renew his
employment contract for 2011 and, in connection therewith, ▇▇▇▇▇▇▇▇ delivered the Resignation
Letter to the Company.
16. Entire Agreement. Subject to Section 17, this Agreement sets forth the
entire agreement between the parties, and fully supersedes any prior agreements or understandings
between the parties, including without limitation that certain Employment Agreement, dated as of
April 6, 2007, by and between ▇▇▇▇▇▇▇▇ and the Company. ▇▇▇▇▇▇▇▇ acknowledges that he has not
relied on any representations, promises, or agreements of any kind made to him in connection with
his decision to accept this Agreement, except for those set forth in this Agreement.
17. Survival of Non-Competition Agreement. The Employee Invention, Non-Disclosure,
Non-Competition and Non-Solicitation Agreement, dated as of April 6, 2007, by and between ▇▇▇▇▇▇▇▇
and the Company (the “Non-Competition Agreement”), shall remain in full force and effect in
accordance with its terms; provided, however, that the second paragraph under the
“Non-Compete/Non-Solicitation” section shall be amended and restated in its entirety to read as
follows:
| “For so long as I am employed by the Company and for a period of 12 full months thereafter, I will not, without the express written consent of the Board of Directors, directly or indirectly, engage in, participate in, or assist, as owner, part-owner, partner, director, officer, trustee, employee, agent or consultant, or in any other capacity, any business organization or person, anywhere in the world where the Company does business, (A) whose activities or products are directly or indirectly competitive with drug delivery technology activities or products of the Company, whether currently ongoing or in development or currently contemplated to be undertaken or developed, or (B) is engaged in the development or marketing of products incorporating any compounds or molecules that are currently incorporated or proposed to be incorporated with the company’s drug delivery technology.” |
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18. Severability. The provisions of this Agreement are severable. If any provision of
the Agreement is declared invalid or unenforceable, any court of competent jurisdiction reviewing
such provision shall enforce the provision to the maximum extent permissible under applicable law.
Any ruling will not affect the validity and enforceability of any other provision of the Agreement.
19. Remedies. Any breach or threatened breach by ▇▇▇▇▇▇▇▇ or the Company of the
provisions of this Agreement could result in irreparable and continuing damage to the Company or
▇▇▇▇▇▇▇▇ for which there is no adequate remedy at law. In such event, and upon the adjudication by
a court of competent jurisdiction, the Company or ▇▇▇▇▇▇▇▇ shall be entitled to injunctive relief
and/or specific performance, and such other relief that may be proper (including monetary damages,
if proper).
20. Assignment. ▇▇▇▇▇▇▇▇ hereby represents and warrants to Company that he has not
assigned any claim that ▇▇▇▇▇▇▇▇ may or might have against Company, from which the Company would
otherwise be released pursuant to this Agreement, to any third party.
21. Counterparts. This Agreement may be signed in counterparts, and each
counterpart, when executed, shall have the efficacy of a signed original. Photocopies of the signed
Agreement may be used in lieu of originals for any purpose.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company and ▇▇▇▇▇▇▇▇ have executed and delivered this Agreement as of
the Execution Date (as defined below).
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||
Date: February 28, 2011 (the “Execution Date”)
EMISPHERE TECHNOLOGIES, INC.
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | CFO & Corporate Secretary | |||
Date: February 28, 2011
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Exhibit A
Form of Resignation Letter
February 28, 2011
Emisphere Technologies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Emisphere Technologies, Inc. (the “Company”)
Dear Ladies and Gentlemen:
I hereby resign as a member of the Board of Directors of the Company and from my office as
Chief Executive Officer and President of the Company, effective as of the date set forth above.
| Sincerely, |
||||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||
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