Exhibit 10.29
TRANSITION AND RELEASE AGREEMENT
This Settlement Agreement and Release ("Agreement") is made by and
between ISTA Pharmaceuticals, Inc. (the "Company") and ▇▇▇▇▇▇ ▇. Danse
("Employee").
WHEREAS, Employee has been terminated as the President and Chief
Executive Officer of the Company;
WHEREAS, for a specified period following such termination, Employee
shall remain with the Company as an employee to ensure a successful transition;
WHEREAS, the Company and Employee have entered into an Employee
Confidentiality and Invention Assignment Agreement dated November 11, 1998 (the
"Confidentiality Agreement");
WHEREAS, the Company and Employee have entered into Unsecured Promissory
Note dated May 29, 1997 (the "Note"); and
WHEREAS, the Company and Employee have entered into stock options
agreements (the "Option Agreements") attached hereto as Exhibit A, pursuant to
which the Employee has received options to purchase up to 462,592 shares of
Common Stock, of which 355,902 would have been vested as of January 31, 2002.
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as "the Parties") hereby agree as
follows:
1. Termination. Employee was terminated as the President and Chief
Executive Officer of the Company on December 19, 2001.
2. Transition Period.
(a) Services. Employee agrees to remain with the Company as an
employee until January 31, 2002 (the "Termination Date") performing those duties
requested from time to time by the Company's Board of Directors, and otherwise
providing a smooth transition. On the Termination Date, Employee's employment
with the Company will terminate.
(b) Compensation. For services performed under Section 2(a) through
the Termination Date and in consideration for the release of claims set forth
below, the Company will continue to (i) pay Employee his base salary as
currently in effect, less applicable withholding, in accordance with the
Company's normal payroll practices through the Termination Date and (ii) provide
Employee with existing employee benefits through the Termination Date.
3. Supplemental Release. Subject to and in consideration for the
execution by Employee of a general release on the Termination Date, the form of
which is attached hereto as Exhibit B (the "Supplemental Agreement"), Employee
shall receive the following severance benefits:
(a) Severance Payments and COBRA Reimbursement. The Company shall (i)
pay Employee at the rate of $26,500 per month, less applicable withholding, in
accordance with the Company's normal payroll practices (the "Termination
Salary"), for the period (the "Payment Period") from the Termination Date
through the nine month anniversary of the Termination Date, and if the Employee
does not have a new job with base annual compensation of at least $100,000 (the
"New Job") on the nine month anniversary of the Termination Date, the Company
shall continue to pay the Employee the Termination Salary to the earlier of the
twelve month anniversary of the Termination Date or the date the Employee gets a
New Job, and (ii) reimburse Employee for health care coverage under COBRA during
the Payment Period. During the Payment Period, Employee will not be entitled to
accrual of any employee benefits, including, but not limited to, vacation
benefits or bonuses.
(b) Stock Options. All shares subject to Employee's outstanding
options to purchase shares of the Company's Common Stock shall become fully
vested and exercisable as of the Effective Date of the Supplemental Agreement
(as defined therein) and shall remain exercisable for a period of one (1) year
following the Effective Date of the Supplemental Agreement. Except as otherwise
set forth herein, the exercise of any stock options shall continue to be subject
to the terms and conditions of the Option Agreements.
(c) Loan Forgiveness. All outstanding principal and accrued interest
with respect to Note shall be forgiven as of the Effective Date of the
Supplemental Agreement.
(d) Bonus. The Company shall pay Employee a bonus, to be determined
by the Board of Directors, on or before January 31, 2002.
(e) Placement. The Company shall pay the cost of outplacement
services up to a maximum amount of $20,000.
4. Confidential Information. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all the Company's property and confidential and proprietary information
in his possession to the Company on the Effective Date of this Agreement.
5. Payment of Salary. Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, commissions and
other benefits due to Employee once the above noted payments and benefits are
received.
6. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company. Employee, on behalf of himself, and his respective heirs, family
members, executors and assigns, hereby fully and forever releases the Company
and its past, present and future officers, agents, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
parents, predecessor and successor corporations and assigns from, and agrees not
to ▇▇▇ or otherwise institute or cause to be instituted any legal or
administrative proceedings concerning, any claim, duty, obligation or cause of
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action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that he may possess arising from any omissions, acts
or facts that have occurred up until and including the Effective Date of this
Agreement, including, without limitation:
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to or arising from Employee's right
to purchase, or actual purchase of, shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law and securities fraud
under any state or federal law;
(c) any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;
(d) 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 Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the Worker
Adjustment and Retraining Notification Act, the California Fair Employment and
Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and
all amendments to each such act as well as the regulations issued thereunder;
(e) any and all claims for violation of the federal, or any state,
constitution;
(f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(g) any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section 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 obligations incurred under this
Agreement. Employee acknowledges and agrees that any breach of any provision of
this Agreement shall constitute a material breach of this Agreement and, in the
case of a breach by Employee, shall entitle the Company immediately to recover
and cease the severance benefits provided to Employee under this Agreement.
Employee shall also be responsible to the Company for all costs, attorneys' fees
and damages incurred by the Company in (a) enforcing the obligations of this
Agreement, including the bringing of any suit to recover the severance benefits
provided under this Agreement, and (b) defending against a claim or suit brought
or pursued by Employee in violation of this Agreement.
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7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Employee acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21)
days within which to consider this Agreement; (c) he has seven (7) days
following the execution of this Agreement by the Parties to revoke this
Agreement; and (d) this Agreement shall not be effective until the revocation
period has expired. Any revocation should be in writing and delivered to ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Ph.D. at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, by the
close of business on the seventh day from the date that Employee signs this
Agreement.
8. Civil Code Section 1542. Employee represents that he is not aware of
any claims against the Company other than the claims that are released by this
Agreement. Employee acknowledges that he has been advised by legal counsel and
is familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive
any rights he may have thereunder, as well as under any other statute or common
law principles of similar effect.
9. No Pending or Future Lawsuits. Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
10. Confidentiality. Employee agrees to use his best efforts to maintain
in confidence the existence of this Agreement, the contents and terms of this
Agreement and the consideration for this Agreement (hereinafter collectively
referred to as "Settlement Information"). Employee agrees to take every
reasonable precaution to prevent disclosure of any Settlement Information to
third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Employee agrees to take every
precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities and family members who have a reasonable need
to know of such Settlement Information.
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11. No Cooperation. Employee agrees he will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so.
12. Non-Disparagement. Employee agrees to refrain from any defamation,
libel or slander of the Company and its respective officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations and assigns or tortious
interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations and assigns.
13. Non-Solicitation. Employee agrees that for a period of twelve (12)
months immediately following the Effective Date of this Agreement, Employee
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage, take away or hire
employees of the Company, either for himself or any other person or entity.
14. No Admission of Liability. Employee understands and acknowledges
that this Agreement constitutes a compromise and settlement of disputed claims.
No action taken by the Company, either previously or in connection with this
Agreement, shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or admission by
the Company of any fault or liability whatsoever to the Employee or to any third
party.
15. Costs. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.
16. Indemnification. Employee agrees to indemnify and hold harmless the
Company from and against any and all loss, costs, damages or expenses,
including, without limitation, attorneys' fees or expenses, incurred by the
Company arising out of the breach of this Agreement by Employee, or from any
false representation made herein by Employee, or from any action or proceeding
which may be commenced, prosecuted or threatened by Employee or for Employee's
benefit, upon Employee's initiative, or with Employee's aid or approval,
contrary to the provisions of this Agreement. Employee further agrees that, in
any such action or proceeding, this Agreement may be pled by the Company as a
complete defense, or may be asserted by way of counterclaim or cross-claim.
17. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation and any of the matters
herein released, including any potential claims of harassment, discrimination or
wrongful termination, shall be subject to binding arbitration, to the extent
permitted by law, in Orange County, California, before the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes.
EMPLOYEE AGREES TO AND DOES HEREBY WAIVE HIS RIGHT TO JURY TRIAL AS TO MATTERS
ARISING OUT OF THE TERMS OF THIS AGREEMENT AND
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ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. 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.
18. Authority. Employee represents and warrants that he has the capacity
to act on his own behalf and on behalf of all who might claim through him to
bind them to the terms and conditions of this Agreement.
19. No Representations. Employee represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
20. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
21. Entire Agreement. This Agreement and the Confidentiality Agreement
represent the entire agreement and understanding between the Company and
Employee concerning Employee's separation from the Company, and supersede and
replace any and all prior agreements and understandings concerning Employee's
relationship with the Company and his compensation by the Company.
22. No Oral Modification. This Agreement may only be amended in writing
signed by Employee and the President of the Company.
23. Governing Law. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California.
24. Effective Date. This Agreement is effective eight days after it has
been signed by both Parties (the "Effective Date").
25. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the Parties.
26. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties, 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;
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(c) They understand the terms and consequences of this Agreement and
of the releases it contains;
(d) They are fully aware of the legal and binding effect of this
Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
ISTA PHARMACEUTICALS, INC.
Dated: By:
---------------- ----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. Ph.D.
Chief Executive Officer and President
▇▇▇▇▇▇ ▇. DANSE, an individual
Dated:
---------------- -------------------------------------------
▇▇▇▇▇▇ ▇. DANSE
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EXHIBIT B
SUPPLEMENTAL SEVERANCE AND RELEASE AGREEMENT
This Supplemental Severance and Release Agreement (this
"Supplemental Agreement") is made by and between ▇▇▇▇▇▇ ▇. Danse ("Employee")
and ISTA Pharmaceuticals, Inc. (the "Company") (collectively referred to as the
"Parties"):
27. Severance Agreement. The Company and Employee agree that the terms
of the Transition and Release Agreement dated January 2, 2002 (the "Agreement")
shall remain in full force and effect, which Agreement is fully incorporated
herein except to the extent it is inconsistent with this Supplemental Agreement.
Capitalized terms used in this Supplemental Agreement shall have the meanings
given to them in the Agreement unless otherwise defined herein.
(a) Consideration.
(i) Severance Payments and COBRA Reimbursement. The Company
shall (i) pay Employee the Termination Salary for the Payment Period, and (ii)
reimburse Employee for health care coverage under COBRA during the Payment
Period. During the Payment Period, Employee will not be entitled to accrual of
any employee benefits, including, but not limited to, vacation benefits or
bonuses.
(ii) Stock Options. All shares subject to Employee's outstanding
options to purchase shares of the Company's Common Stock shall become fully
vested and exercisable as of the Effective Date (as defined below) and shall
remain exercisable for a period of one (1) year following the Effective Date.
Except as otherwise set forth herein, the exercise of any stock options shall
continue to be subject to the terms and conditions of the Option Agreements.
(iii) Loan Forgiveness. All outstanding principal and accrued
interest with respect to the Note shall be forgiven as of the Effective Date.
(iv) Bonus. The Company shall pay Employee a bonus, to be
determined by the Board of Directors, on or before January 31, 2002.
(v) Placement. The Company shall pay the cost of outplacement
services up to a maximum amount of $20,000.
28. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its officers, managers, supervisors, agents and employees.
Employee, on his own behalf, and on behalf of his respective heirs, family
members, executors, agents, and assigns, hereby fully and forever releases the
Company and its officers, directors, employees, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, from, and agrees not to ▇▇▇ concerning, any claim,
duty, obligation or cause of action relating to any matters of
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any kind, whether presently known or unknown, suspected or unsuspected, that
Employee may possess arising from any omissions, acts or facts that have
occurred up until and including the Effective Date of this Supplemental
Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to or arising from Employee's right
to purchase, or actual purchase of, shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law and securities fraud
under any state or federal law;
(c) any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;
(d) 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 Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the Worker
Adjustment and Retraining Notification Act, the California Fair Employment and
Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and
all amendments to each such act as well as the regulations issued thereunder;
(e) any and all claims for violation of the federal, or any state,
constitution;
(f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(g) any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section 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 obligations incurred under this
Supplemental Agreement. Employee acknowledges and agrees that any breach of any
provision of this Supplemental Agreement shall constitute a material breach of
this Supplemental Agreement and, in the case of a breach by Employee, shall
entitle the Company immediately to recover and cease the severance benefits
provided to Employee under this Supplemental Agreement. Employee shall also be
responsible to the Company for all costs, attorneys' fees and damages incurred
by the Company in (a) enforcing the obligations of this Supplemental Agreement,
including the bringing of any suit to recover the severance benefits
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provided under this Supplemental Agreement, and (b) defending against a claim or
suit brought or pursued by Employee in violation of this Supplemental Agreement.
(h) Acknowledgement of Waiver of Claims Under ADEA. Employee
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Supplemental Agreement. Employee
acknowledges that the consideration given for this waiver and release
Supplemental Agreement is in addition to anything of value to which Employee was
already entitled. Employee further acknowledges that he has been advised by this
writing that (a) he should consult with an attorney prior to executing this
Supplemental Agreement; (b) he has twenty-one (21) days within which to consider
this Supplemental Agreement; (c) he has seven (7) days following the execution
of this Supplemental Agreement by the Parties to revoke this Supplemental
Agreement; and (d) this Supplemental Agreement shall not be effective until the
revocation period has expired. Any revocation should be in writing and delivered
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D. at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, by the close of business on the seventh day from the date that Employee
signs this Supplemental Agreement.
29. Civil Code Section 1542. Employee represents that he is not aware of
any claims against the Company other than the claims that are released by this
Agreement. Employee acknowledges that he has been advised by legal counsel and
is familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive
any rights he may have thereunder, as well as under any other statute or common
law principles of similar effect.
30. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Supplemental Agreement, their interpretation and any of the
matters herein released, including any potential claims of harassment,
discrimination or wrongful termination, shall be subject to binding arbitration,
to the extent permitted by law, in Orange County, California, before the
American Arbitration Association under its National Rules for the Resolution of
Employment Disputes. EMPLOYEE AGREES TO AND DOES HEREBY WAIVE HIS RIGHT TO JURY
TRIAL AS TO MATTERS ARISING OUT OF THE TERMS OF THIS SUPPLEMENTAL AGREEMENT AND
ANY MATTERS HEREIN RELEASED TO THE EXTENT PERMITTED BY LAW. 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.
Entire Agreement. This Supplemental Agreement represents the entire
agreement and understanding between the Company and Employee concerning the
subject matter of this
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Supplemental Agreement, and supersedes and replaces any and all prior agreements
and understandings between the Parties concerning the subject matter of this
Supplemental Agreement.
31. Governing Law. This Supplemental Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of the State of
California.
32. Effective Date. This Supplemental Agreement is effective eight days
after it has been signed by both Parties (the "Effective Date").
33. Voluntary Execution of Agreement. This Supplemental Agreement is
executed voluntarily and without any duress or undue influence on the part or
behalf of the Parties, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Supplemental Agreement;
(b) They have been represented in the preparation, negotiation and
execution of this Supplemental 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 Supplemental
Agreement and of the releases it contains; and
(d) They are fully aware of the legal and binding effect of this
Supplemental Agreement.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the Parties have executed this Supplemental
Agreement on the respective dates set forth below.
ISTA PHARMACEUTICALS, INC.
Dated: January 23, 2002 By:
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. Ph.D.
Chief Executive Officer and President
▇▇▇▇▇▇ ▇. DANSE, an individual
Dated: January 23, 2002 ---------------------------------------------
▇▇▇▇▇▇ ▇. DANSE
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