EXHIBIT 10.1
EMPLOYMENT SEPARATION AGREEMENT
AND RELEASE OF LEGAL RIGHTS
This Agreement is entered into between OSI Pharmaceuticals, Inc., including its
Directors, officers, employees and agents (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
M.D. ("▇▇. ▇▇▇▇▇▇").
I. STIPULATIONS
1. The Company and ▇▇. ▇▇▇▇▇▇ have mutually agreed to amicably terminate
their existing employment relationship effective May 2, 2005.
2. The purpose of this Agreement is to facilitate ▇▇. ▇▇▇▇▇▇'▇ separation
from employment with the Company and provide her with enhanced severance
payments, some of which she is not otherwise entitled to in exchange for her
release of legal rights.
3. The Company and ▇▇. ▇▇▇▇▇▇ are parties to an Employment Agreement dated
December 21, 2001 (the "Employment Agreement") and Employment Covenants
Agreement signed by ▇▇. ▇▇▇▇▇▇ on August 25, 2003 (the "Covenants Agreement").
4. This Agreement extinguishes and supercedes all of the Company's
obligations under the Employment Agreement, but does not extinguish ▇▇. ▇▇▇▇▇▇'▇
obligations under the provisions of the Covenants Agreement designed to survive
termination of her employment with the Company. It is therefore understood that
certain terms of the Covenants Agreement continue in effect pursuant to the
terms of that Agreement.
5. Both the Company and ▇▇. ▇▇▇▇▇▇ are represented by legal counsel and ▇▇.
▇▇▇▇▇▇ has accordingly been advised of the legal rights she is giving up by
signing this Agreement. ▇▇. ▇▇▇▇▇▇'▇ legal counsel is ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Except as provided otherwise in this Agreement, the Company and ▇▇. ▇▇▇▇▇▇ shall
each pay its and her own costs and attorneys fees in connection with the
negotiation, execution and enforcement of this Agreement.
6. It is intended that this Agreement be interpreted in the broadest
possible manner in favor of forever resolving all disputes between ▇▇. ▇▇▇▇▇▇
and the Company. The only exceptions to the scope of the legal release executed
by ▇▇. ▇▇▇▇▇▇ in favor of the Company are specifically noted in this Agreement,
and all such exceptions are to be narrowly construed.
7. ▇▇. ▇▇▇▇▇▇ understands that all payments made by the Company under this
Agreement are subject to tax reporting obligations and standard payroll
deductions for federal and state taxes. The Company, however, makes no
representations whatsoever concerning the tax consequences of this Agreement to
▇▇. ▇▇▇▇▇▇.
8. ▇▇. ▇▇▇▇▇▇'▇ last day of work for the Company will be May 2, 2005, at
which time all pay and benefits associated with her employment will terminate
except as provided for in this Agreement or under applicable law.
II. CONSIDERATION
9. As consideration for signing this Agreement, and for the release of her
legal rights, ▇▇. ▇▇▇▇▇▇ will receive the following enhanced severance payments
and benefits, some of which she is not currently entitled to under her existing
Employment Agreement:
(i) Severance pay equal to one year's salary in the gross amount of
$375,000;
(ii) A prorated portion of her bonus for 2005 in the gross amount of
$50,000; and
(iii) Payment of these two amounts (the "Total Severance Amount")
shall be paid in full on May 2, 2005.
10. In addition to the Total Severance Amount of $425,000, all unvested
options previously granted to ▇▇. ▇▇▇▇▇▇ which, if her employment were not to
terminate as of May 2, 2005, would vest on or before April 30, 2006, shall vest
and become exercisable on May 2, 2005. Notwithstanding any provision to the
contrary in the Option Agreements accompanying the grants of her options, the
Compensation Committee of the Board of Directors has approved a modification to
such agreements to allow the exercise of such options through December 31, 2005.
11. At or about the time of her termination from employment on May 2, 2005,
▇▇. ▇▇▇▇▇▇ will receive notice of her right to continue her medical insurance at
her own expense for eighteen (18) months under a federal law known as COBRA. The
Company, however, will pay ▇▇. ▇▇▇▇▇▇ a lump sum payment at the time of her
termination to reimburse her for twelve (12) months of medical expenses in the
gross amount of $14,760. This is in addition to the Total Severance Amount.
III. IMPORTANT REQUIRED NOTICE
12. Because ▇▇. ▇▇▇▇▇▇ is over age forty, she has special rights under a
federal law known as the Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Protection Act. Under this federal law, employees
over age forty have a right to be free from discrimination in all aspects of the
employment relationship. ▇▇. ▇▇▇▇▇▇ understands that she is giving up the right
to ▇▇▇ the Company for age discrimination by signing this Agreement.
13. In exchange for giving up these legal rights, ▇▇. ▇▇▇▇▇▇ is receiving
pay or benefits that she is not otherwise entitled to under her Employment
Agreement or under any existing Company policy.
14. Because this is a legally binding document, the Company has an
obligation to inform ▇▇. ▇▇▇▇▇▇ that she should consult a lawyer before signing
this Agreement and giving up her legal rights and ▇▇. ▇▇▇▇▇▇ represents that she
is represented by the lawyer identified in this Agreement.
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15. ▇▇. ▇▇▇▇▇▇ has the right to take twenty-one days to decide whether or
not to sign this Agreement and give up her legal rights. If she signs before the
expiration of twenty-one days, she is not required to do so and could have taken
the entire twenty-one days to consider this Agreement.
16. ▇▇. ▇▇▇▇▇▇ also has the right to revoke this Agreement within seven
days after signing it. Such revocation must be in writing addressed to ▇▇▇▇▇▇▇
▇. ▇▇▇▇, Vice President and General Counsel of the Company, ▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. If this Agreement is revoked, however, ▇▇. ▇▇▇▇▇▇ will not
be entitled to any of the severance pay or benefits provided in this Agreement
except for the benefits that she is already entitled to under existing Company
policy or the terms of her existing Employment Agreement.
IV. LEGAL RELEASE
17. ▇▇. ▇▇▇▇▇▇ releases the Company (as defined in this Agreement, which
includes all officers, Directors, employees and agents and all subsidiaries and
affiliated companies) from all legal claims and obligations of whatever nature
or kind, including all legal claims relating to ▇▇. ▇▇▇▇▇▇'▇ employment and
separation from employment.
18. The legal claims that ▇▇. ▇▇▇▇▇▇ is giving up by signing this Agreement
include, but are not limited to, the following:
(i) All claims that ▇▇. ▇▇▇▇▇▇ may have against the Company under the
laws of any state, including claims for breach of contract
(express or implied), misrepresentation, fraud, defamation,
claims for unpaid wages, or any claims of fraud or
misrepresentation in connection with the negotiation and
execution of this Agreement;
(ii) All claims for alleged personal injury sustained;
(iii) All claims that ▇▇. ▇▇▇▇▇▇ may have against the Company for
alleged age discrimination in employment, if based in whole or in
part on acts, occurrences, or omissions that occurred before the
effective date of this Agreement, or that relate in any way to
▇▇. ▇▇▇▇▇▇'▇ employment or discharge from employment;
(iv) All claims that ▇▇. ▇▇▇▇▇▇ may have alleging any other forms of
discrimination in employment arising out of federal or state
laws; and
(v) All claims arising under the Employment Retirement Income
Security Act (ERISA) except future rights to vested benefits of
employment, if any.
19. This legal release in favor of the Company is intended to be construed
in the broadest possible manner and is subject only to the following exceptions,
which are to be narrowly construed:
(i) Workers compensation claims to the extent such claims cannot be
released under state law without the approval of a court of
competent jurisdiction;
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(ii) Rights to retirement benefits previously vested by operation of
law pursuant to the terms of the Company's 401(k) Plan;
(iii) Rights to unemployment compensation benefits under state law, to
the extent such claims cannot be waived in an agreement between
the parties;
(iv) Actions to enforce the terms of this Agreement to the extent that
specific rights and benefits are conferred by this Agreement; and
(v) Actions to enforce the Company's indemnity obligations under
applicable law, with specific reference to the securities class
action lawsuit styled ▇▇▇▇▇▇▇▇ v. OSI Pharmaceuticals, Inc. et
al. (the "Class Action"), in which ▇▇. ▇▇▇▇▇▇ is named as an
individual defendant.
V. NON-DISPARAGEMENT OBLIGATIONS
20. ▇▇. ▇▇▇▇▇▇ acknowledges that she enjoyed a position of trust and
confidence with the Company, and has a fiduciary duty to act in the Company's
best interests. ▇▇. ▇▇▇▇▇▇ agrees that this fiduciary duty shall continue for a
period of twelve (12) months following the termination of her employment with
the Company under this Agreement.
21. ▇▇. ▇▇▇▇▇▇ further agrees that following her termination of employment
with the Company and for the next five (5) years thereafter, she will not make
any statement that is professionally or personally disparaging about, or adverse
to, the interests of the Company, any of its officers, Directors, Shareholders
or employees, including, without limitation, any statement that disparages any
product, service, financial condition, or financial capability of the Company,
or that is disparaging to any Director, officer, Shareholder, or executive of
the Company. This includes the obligation to refrain from any conduct that is
intended to or has the result of damaging the professional or personal
reputation of the Company or any of its Directors, officers, or executives.
22. ▇▇. ▇▇▇▇▇▇ acknowledges that the Company may disclose the terms of this
Agreement if disclosure is required by law or by a governmental agency or court
order.
23. In the event the Company has reason to believe that ▇▇. ▇▇▇▇▇▇ has
violated her obligations of non-disparagement hereunder or the provisions of the
Covenants Agreement intended to survive termination of her employment with the
Company, the following dispute resolution procedures shall apply:
(i) If the Company has any reason to believe that ▇▇. ▇▇▇▇▇▇ is not
complying with her non-disparagement obligations or the provisions of
the Covenants Agreement, it shall notify her in writing and give her a
reasonable opportunity to explain why she is in compliance.
(ii) If, following reasonable consideration, the Company is not
satisfied with ▇▇. ▇▇▇▇▇▇'▇ explanation, it shall have the right to
commence a final and binding arbitration proceeding in accordance with
Article VI below in order to enforce its rights.
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VI. FINAL AND BINDING ARBITRATION
24. Any dispute concerning ▇▇. ▇▇▇▇▇▇'▇ non-disparagement obligations of
this Agreement and her obligations under the surviving terms of the Covenants
Agreement (but no other provisions of this Agreement) shall be resolved only by
final and binding arbitration under the Federal Arbitration Act. The parties
acknowledge that the Federal Arbitration Act applies because the Company is
engaged in interstate commerce.
25. ▇▇. ▇▇▇▇▇▇ or the Company may invoke arbitration with the American
Arbitration Association and the arbitration shall be conducted before a single
arbitrator in Denver, Colorado, pursuant to the employment dispute resolution
rules of the American Arbitration Association.
26. The Company shall pay the administrative costs of the arbitration,
including the arbitrator's fees and costs. Each party, however, shall be solely
responsible for payment of its and her own attorneys fees and costs. It is the
intent of this provision to deprive the arbitrator of the discretion to award
fees and costs to the prevailing party.
27. The jurisdiction of the arbitrator shall be limited to a determination
of whether ▇▇. ▇▇▇▇▇▇ has complied with her obligations of non-disparagement
under this Agreement or under the surviving provisions of the Covenants
Agreement. If she has not complied, the arbitrator shall order ▇▇. ▇▇▇▇▇▇ to
repay the amount, if any, sought by the Company. The arbitrator shall have no
jurisdiction to award punitive or compensatory damages.
VII. MISCELLANEOUS PROVISIONS
28. At any time and from time to time after the termination of ▇▇. ▇▇▇▇▇▇'▇
employment with the Company, ▇▇. ▇▇▇▇▇▇ shall cooperate with the Company and
shall use all commercially reasonable efforts to take, or cause to be taken, any
and all actions as may be required by the Company (or any lawyers engaged by the
Company and acting on its behalf) in its reasonable discretion in connection
with any investigation, prosecution, defense or settlement of any litigation or
proceeding (including, without limitation, any proceeding brought by a
governmental agency) brought against the Company and, in particular, the Class
Action, including, without limitation, providing information, documents, files,
books or records, and meeting with defense counsel for the Class Action and
being available for depositions and other activities related to the Class Action
as needed. The Company will reimburse ▇▇. ▇▇▇▇▇▇, upon request, for travel and
other out-of-pocket expenses reasonably incurred by ▇▇. ▇▇▇▇▇▇ in the course of
taking any such actions under this Section 28 upon the presentation of
appropriate receipts and other relevant documentation for all such expenses as
part of any request by ▇▇. ▇▇▇▇▇▇ for reimbursement.
29. This is the entire agreement between the parties regarding the subject
matter hereof, other than the Covenants Agreement, the surviving terms of which
shall remain in full force and effect, and any amendment to, modification of, or
supplement to this Agreement must be in writing and signed by each party or an
expressly authorized representative.
30. If any term or provision of this Agreement shall be held to be invalid
or unenforceable for any reason, such term or provision shall be ineffective to
the extent of such invalidity or unenforceability without affecting the validity
of the remaining terms or provisions
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of this Agreement, and such invalid term shall be deemed modified to the extent
necessary to make it enforceable.
31. Except for the waiver of federal claims, this Agreement shall be
construed in accordance with and governed by the laws of the State of Colorado,
without regard to choice of law provisions.
32. This Agreement may be enforced in any court of competent jurisdiction.
33. By her signature below, ▇▇. ▇▇▇▇▇▇ acknowledges that she understands
and accepts the terms of this Agreement, that she has the legal capacity to
enter into this Agreement, and understands that it is legally binding, and that
she has been advised by her lawyer concerning this Agreement.
/s/ /s/
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▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D. OSI Pharmaceuticals, Inc.
Dated: April 20, 2005 By:
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Dated: April 20, 2005
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