TARGETED GENETICS CORPORATION SEPARATION AGREEMENT AND RELEASE
TARGETED
GENETICS CORPORATION
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (this “Agreement”)
is
made by and between Targeted Genetics Corporation, a Washington corporation
(the
“Company”),
and
H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (“▇▇. ▇▇▇▇▇▇”
or
“Employee”)
on
November 14, 2008 (the “Agreement
Date”),
effective as of the Separation Date (as defined below).
WHEREAS,
▇▇.
▇▇▇▇▇▇ is the Chief Executive Officer and President of the Company up to the
Separation Date.
WHEREAS,
the
Company and ▇▇. ▇▇▇▇▇▇ wish to terminate their working relationship as of the
Separation Date (defined below), and as such ▇▇. ▇▇▇▇▇▇’▇ employment with the
Company is being terminated (the “Termination”).
WHEREAS,
in
exchange for ▇▇. ▇▇▇▇▇▇’▇ agreement to release the Company from any and all
claims arising from or related to the employment relationship, and for agreeing
to continue to provide consulting services to the Company for a period of six
(6) months following the Separation Date, the Company shall provide the benefits
as set forth herein.
NOW,
THEREFORE,
in
consideration of the mutual promises made herein, the Company and ▇▇. ▇▇▇▇▇▇
(individually referred to as a “Party,”
collectively referred to as the “Parties”)
hereby
agree as follows:
1. Termination
of Employment.
▇▇.
▇▇▇▇▇▇ and the Company acknowledge and agree that ▇▇. ▇▇▇▇▇▇’▇ employment with
the Company shall terminate, as of the close of business, on November 6, 2008
(the “Separation
Date”).
2. Separation
Benefits.
In
consideration for the release of claims set forth below and other obligations
under this Agreement and in full satisfaction of its obligations to ▇▇. ▇▇▇▇▇▇
under the terms of any agreements ▇▇. ▇▇▇▇▇▇ may have with the Company, and
provided that this Agreement is executed and delivered by ▇▇. ▇▇▇▇▇▇ and not
revoked under Section 6 herein, the Company agrees to provide ▇▇. ▇▇▇▇▇▇
with the benefits described in Section 3 below.
3. Separation
Consideration.
In
exchange for ▇▇. ▇▇▇▇▇▇’▇ agreement to the release of claims set forth in
Section 5, below, the Company agrees to provide ▇▇. ▇▇▇▇▇▇ with the
following benefits (the “Separation
Benefits”):
(a) Restricted
Stock Units.
▇▇.
▇▇▇▇▇▇ holds a total of One Hundred Thousand (100,000) restricted stock units
(the “RSUs”)
issued
pursuant to the terms of the Company’s Stock Incentive Plan (the “Plan”)
and
related restricted stock unit agreement. As of the Separation Date, Sixteen
Thousand Six Hundred Sixty-Six (16,666) of such RSUs have vested and have been
paid out pursuant to the terms of the Plan and the related restricted stock
unit
agreement and the remaining Eighty Three Thousand Three Hundred Thirty-Four
(83,334) of the RSUs are unvested. ▇▇. ▇▇▇▇▇▇ agrees that under the terms of
the
Plan and related restricted stock unit agreement the unvested RSUs are to be
immediately forfeited without consideration. Notwithstanding the foregoing,
in
exchange for ▇▇. ▇▇▇▇▇▇’▇ release of claims and her agreement to provide
consulting services as described in Section 7, the Company shall fully
accelerate the vesting of such unvested RSUs such that the remaining Eighty
Three Thousand Three Hundred Thirty-Four (83,334) RSUs shall become fully
vested. Such accelerated RSUs shall be settled not later then December 31,
2008,
provided that this Agreement is effective.
(b)
Stock
Grant.
In
exchange for ▇▇. ▇▇▇▇▇▇’▇ release of claims and agreement to perform
consulting services as described in Section 7, pursuant to the Plan, the Company
has made a Stock Grant (as defined in the Plan) to ▇▇. ▇▇▇▇▇▇ in the amount
of
One Hundred Fifty Thousand (150,000) Shares (as defined in the Plan), subject
to
the execution and effectiveness of this Agreement. The Parties shall execute
a
Stock Grant Agreement (as defined in the Plan).
(c)
Payment
of COBRA Continuation Coverage Premiums.
If ▇▇.
▇▇▇▇▇▇ timely elects continuation coverage under COBRA, the Company will pay,
on
▇▇. ▇▇▇▇▇▇’▇ behalf, the applicable COBRA premiums to continue her group health
insurance coverage through COBRA at the level in effect as of the Separation
Date (including dependent coverage, if applicable) through May 31, 2009, to
the extent such coverage remains available. Notwithstanding the foregoing,
the
Company’s obligation to pay ▇▇. ▇▇▇▇▇▇’▇ COBRA premiums will cease immediately
in the event that she becomes covered under the group health insurance plan
of a
new employer at any time during such period, and such coverage is substantially
equivalent to or superior than such coverage provided by the Company, and ▇▇.
▇▇▇▇▇▇ agrees to provide prompt written notice to the Company (or its successor)
if she becomes eligible for such group health insurance coverage during such
period.
(d)
Cell
Phone.
▇▇.
▇▇▇▇▇▇ shall be permitted to keep the cell phone she currently uses and the
Company shall continue pay the expenses for such cell phone for a period of
thirty (30) days commencing on the Separation Date. ▇▇. ▇▇▇▇▇▇ shall personally
assume the contract for such cell phone and become personally liable for any
expenses related to such cell phone upon the expiration of such thirty-day
period.
(e)
Payment of Attorney’s Fees.
The
Company shall pay ▇▇. ▇▇▇▇▇▇’▇ documented attorneys' fees and expenses incurred
as a result of negotiating this Agreement, in an amount not to exceed Three
Thousand Dollars ($3,000).
4. No
Other Payments Due.
▇▇.
▇▇▇▇▇▇ acknowledges that, on the Agreement Date, the Company provided her a
final paycheck for all accrued salary, any commissions or bonuses that may
have
accrued or may accrue, unused accrued vacation and other sums that were due
to
▇▇. ▇▇▇▇▇▇ through the Separation Date. Except as specifically provided in
Sections 3 and 8 hereof, ▇▇. ▇▇▇▇▇▇ acknowledges and agrees that she
shall not be entitled to earn or receive payment of any commission or other
incentive compensation from the Company.
5. Release
of Claims.
In
consideration for the benefits set forth in this Agreement, the Company and
▇▇.
▇▇▇▇▇▇, on behalf of themselves and each of their respective heirs, executors,
administrators, predecessor and successor corporations and assigns, each hereby
fully and forever releases ▇▇. ▇▇▇▇▇▇ and the Company and its affiliates and
subsidiaries, and each of their respective heirs, executors, officers,
directors, employees, investors, stockholders, administrators, predecessor
and
successor corporations and assigns, respectively (collectively, the
“Released
Parties”),
of
and from any claim, duty, obligation or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected,
that
any of them may possess arising from any omissions, acts or facts that have
occurred up until and including the Separation Date including, without
limitation:
(a) any
and
all claims relating to or arising from ▇▇. ▇▇▇▇▇▇’▇ employment relationship with
the Company and the Termination;
(b) except
for the rights granted in Section 3(a) - (b) hereof (and the rights
appurtenant thereto), any and all claims relating to or arising from the RSUs
or
any other right to purchase shares of the Company’s stock;
(c) any
and
all claims for sales commissions, performance bonuses or similar
payments;
(d) any
and
all claims for wrongful discharge of employment; breach of contract, both
express and implied; breach of a covenant of good faith and fair dealing, both
express and implied, negligent or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; negligence; and
defamation;
(e) any
and
all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, the California Fair Employment and
Housing Act, and any family and medical leave acts;
(f) any
and
all claims relating to or arising out of any other laws and regulations relating
to employment or employment discrimination; and
(g) except
as
provided in Section 3(e), any and all claims for attorneys’ fees and
costs.
The
Company and ▇▇. ▇▇▇▇▇▇ agree that the release set forth in this Section 5
shall be and remain in effect in all respects as a complete general release
as
to the matters released. This release does not extend to any actions of
enforcement by the Securities and Exchange Commission against ▇▇. ▇▇▇▇▇▇ in
her
capacity as an officer or member of the Board of Directors of the Company,
fraud
perpetrated by ▇▇. ▇▇▇▇▇▇, willful misconduct by ▇▇. ▇▇▇▇▇▇ that resulted in
injury to the Company , payments or benefits receivable, or obligations incurred
or specified under this Agreement or to any right of indemnification ▇▇. ▇▇▇▇▇▇
had as an officer or member of the Board of Directors of the Company, or to
any
benefits to which ▇▇. ▇▇▇▇▇▇ is entitled under any 401(k), profit sharing or
other employee benefit plan maintained by the Company to which she is entitled
or vested prior to and as of the Separation Date. The Company shall defend
and
indemnify ▇▇. ▇▇▇▇▇▇ as required and to the fullest extent permitted by its
Articles of Incorporation and Bylaws.
6. Acknowledgment
of Waiver of Claims under ADEA.
▇▇.
▇▇▇▇▇▇ acknowledges that she is waiving and releasing any rights she may have
under the Age Discrimination in Employment Act of 1967 (“ADEA”)
and
that this waiver and release is knowing and voluntary. ▇▇. ▇▇▇▇▇▇ and the
Company agree that this waiver and release does not apply to any rights or
claims that may arise under ADEA after the date of this Agreement. ▇▇. ▇▇▇▇▇▇
acknowledges that the consideration given for this waiver and release Agreement
is in addition to anything of value to which ▇▇. ▇▇▇▇▇▇ was already entitled.
▇▇. ▇▇▇▇▇▇ further acknowledges that she has been advised by this writing that
(a) she should consult with an attorney prior
to
executing this Agreement; (b) she has at least twenty-one (21) days within
which to consider this Agreement; (c) she has seven (7) days following
her execution of this Agreement to revoke the Agreement (the “Revocation
Period”).
This
Agreement shall not be effective until the Revocation Period has expired.
Nothing in this Agreement prevents or precludes ▇▇. ▇▇▇▇▇▇ from challenging
or
seeking a determination in good faith of the validity of this waiver under
the
ADEA, nor does it impose any condition precedent, penalties or costs for doing
so, unless specifically authorized by federal law.
7. Consulting
Services.
For a
period of six (6) months following the Separation Date, ▇▇. ▇▇▇▇▇▇ agrees to
provide consulting services to the Company in order to provide transition
assistance to the interim or newly hired Chief Executive Officer of the Company,
as reasonably required by the Company, not to exceed ten hours per month, at
such times as are mutually agreed to by ▇▇. ▇▇▇▇▇▇ and the Company. ▇▇. ▇▇▇▇▇▇
shall be paid Five Thousand Dollars ($5,000) per month, payable at the Company’s
normal payroll intervals, in return for her consulting services, with partial
months being pro-rated. In the event ▇▇. ▇▇▇▇▇▇ incurs any expenses directly
related to the provision of such consulting services, the Company agrees to
reimburse ▇▇. ▇▇▇▇▇▇ for reasonable documented business expenses in accordance
with its standard reimbursement policy. ▇▇. ▇▇▇▇▇▇’▇ termination of employment
is intended to constitute a separation from service as such term is defined
in
Treasury Regulation Section 1.409A-1(h)(1).
8. Benefits.
▇▇.
▇▇▇▇▇▇’▇ health insurance benefits will cease on the Separation Date, subject to
her right (and her qualified beneficiaries’ rights) to COBRA continuation
coverage. As set forth in Section 3 above, the Company shall pay the
applicable COBRA premium set forth above. ▇▇. ▇▇▇▇▇▇’▇ participation in all
other employee benefits and incidents of employment cease on the Separation
Date. ▇▇. ▇▇▇▇▇▇ ceases accruing employee benefits, including, but not limited
to, vacation time and paid time off and stock option and RSUs vesting as of
the
Separation Date. Nothing herein is in any way intended to apply to ▇▇. ▇▇▇▇▇▇’▇
401(k) voluntary contributions prior to the Separation Date.
9. Covenants.
(a) Confidential
Information.
▇▇.
▇▇▇▇▇▇ represents, warrants and agrees that: (i) she properly signed,
returned and became a party to the Invention Disclosure and Confidentiality
Agreement with the Company (the “Confidentiality
Agreement”),
(ii) the Confidentiality Agreement remains binding and enforceable between
the parties; and (iii) ▇▇. ▇▇▇▇▇▇ has not breached any of her obligations
to the Company under the terms of the Confidentiality Agreement.
(b) Mutual
Non-Disparagement.
▇▇.
▇▇▇▇▇▇ agrees that she will not engage in conduct or undertake
speech
(written
or oral)
derogatory to or otherwise disparage the Company, any officer of the Company,
any member of its Board of Directors as of the date of this agreement, or their
products or services. The Company agrees that its officers and Board of
Directors will not engage in conduct or undertake speech (written or oral)
that
is derogatory to or otherwise disparage ▇▇. ▇▇▇▇▇▇.
(c) Computer
Access.
▇▇.
▇▇▇▇▇▇ shall be permitted to keep her computer, provided, however, that the
Company shall remove any non-personal data, programs, or other information
from
such Computer.
(d) Return
of Company Property.
▇▇.
▇▇▇▇▇▇ represents, warrants and agrees that she has returned to the Company
all
property or data of the Company of any type whatsoever that has been in her
possession or control including the transfer of all passwords, access cards,
keys or signatory authority controlled by her on behalf of the
Company.
(e) Resignation
from the Board of Directors.
Upon
the effective date of this Agreement, ▇▇. ▇▇▇▇▇▇ shall resign as a member of
the
board of directors of the Company. Such resignation shall be effective
immediately as of the date thereof.
10. Breach
of this Agreement.
The
Parties acknowledge that upon material breach of any provision of this
Agreement, the Company its officers and directors, on the one hand, and ▇▇.
▇▇▇▇▇▇ on the other hand, would sustain irreparable harm from such breach,
and,
therefore, the Parties agree that in addition to any other remedies which a
Party may have for any material breach of this Agreement or otherwise, such
Party shall be entitled to obtain equitable relief including specific
performance, injunctions and restraining the other Party from committing or
continuing any such violation of this Agreement.
11. Authority.
The
Company represents and warrants that the undersigned has the authority to act
on
behalf of the Company and to bind the Company and all who may claim through
it
to the terms and conditions of this Agreement. ▇▇. ▇▇▇▇▇▇ represents and
warrants that she has the capacity to act on her own behalf and on behalf of
all
who might claim through her to bind them to the terms and conditions of this
Agreement. Each Party warrants and represents that there are no liens or claims
of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.
12. No
Representations.
Neither
Party has relied upon any representations or statements made by the other Party
hereto which are not specifically set forth in this Agreement.
13. Severability.
In the
event that any provision hereof becomes or is declared by a court or other
tribunal of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said
provision.
14. Arbitration.
The
Parties shall attempt to settle all disputes arising in connection with this
Agreement through good faith consultation. In the event no agreement can be
reached on such dispute within fifteen (15) days after notification in writing
by either Party to the other concerning such dispute, the dispute shall be
settled by binding arbitration to be conducted in King County, Washington before
the American Arbitration Association under its under its Employment Arbitration
Rules and Mediation Procedures, or by a judge to be mutually agreed upon. The
Company shall pay the costs of the arbitration proceeding, provided however
that
each Party shall bear its or her own attorneys' fees and expenses, unless
otherwise determined by the arbitrator, who shall have the authority
to award payment of attorneys' fees and costs as provided under any
applicable Washington statute or regulation. The arbitration decision shall
be final, conclusive and binding on both Parties and any arbitration award
or
decision may be entered in any court having jurisdiction. The Parties agree
that
the prevailing Party in any arbitration shall be entitled to injunctive relief
in any court of competent jurisdiction to enforce the arbitration award. This
Section 14 shall not apply to any breach of or efforts to enforce the
Confidentiality Agreement. The
Parties hereby waive any rights they may have to trial by jury in regard to
arbitrable claims.
15. Entire
Agreement.
This
Agreement, along with the other agreements referenced herein, represents the
entire agreement and understanding between the Company and ▇▇. ▇▇▇▇▇▇ concerning
▇▇. ▇▇▇▇▇▇’▇ separation from the Company, and supersedes and replaces any and
all prior agreements and understandings concerning ▇▇. ▇▇▇▇▇▇’▇ employment
relationship with the Company.
16. Withholding
Taxes.
All
amounts payable pursuant to this Agreement shall be subject to applicable
withholding taxes.
17. No
Oral Modification.
This
Agreement may only be amended in writing signed by ▇▇. ▇▇▇▇▇▇ and the
Company.
18. Effective
Date.
This
Agreement is effective upon the expiration of the Revocation Period described
in
Section 6.
19. Governing
Law.
This
Agreement shall be governed by the laws of the state of Washington, without
regard to its conflicts of law provisions.
20. Counterparts.
This
Agreement may be executed in counterparts, and each coun-terpart shall have
the
same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.
21. Assignment.
This
Agreement may not be assigned by ▇▇. ▇▇▇▇▇▇ without the prior written consent
of
the Company.
22. Voluntary
Execution of Agreement.
This
Agreement is executed voluntarily and without any duress or undue influence
on
the part or behalf of the Parties hereto, with the full intent of releasing
all
claims. The Parties acknowledge that:
(a) they
have
read this Agreement;
(b) they
have
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel;
(c) they
understand the terms and consequences of this Agreement and of the releases
it
contains; and
(d) they
are
fully aware of the legal and binding effect of this Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Parties have executed this Separation Agreement and Release
on the respective dates set forth below.
TARGETED
GENETICS
CORPORATION
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ | |||
|
Its: Executive Chairman |
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| Dated: November 14, 2008 |
H.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
| /s/ H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
|
Dated: November 14, 2008 |
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