EXHIBIT 10.27
SEVERANCE AGREEMENT
This Severance Agreement is entered into this 20th day of September, 1999
by and between Xxxx X. Xxxxx ("White") and Interleukin Genetics, Inc. ("ILGN").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, White is presently employed as the Senior Vice President and
General Counsel of ILGN pursuant to the Employment Agreement dated January 1,
1996, as amended, between ILGN and White (the "Employment Agreement").
WHEREAS, the Company and White wish to discontinue their employment
relationship and, in lieu thereof, enter into this Severance Agreement (the
"Agreement");
NOW, THEREFORE, in consideration of the premises, the agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and White agree as
follows:
1. This Agreement embodies the full and final settlement of all rights and
obligations of the Company and White under the Employment Agreement and the
Employment Agreement shall be terminated in all respects except for the terms
thereof that specifically survive as set forth in this Agreement. Each party
hereto acknowledges that the Employment Agreement is being terminated without
cause by mutual agreement of the parties hereto pursuant to Section 12.1.3 of
the Employment Agreement. ILGN and White acknowledge and agree that White is not
owed any amounts under the Employment Agreement resulting from this mutual
agreement to terminate, and that no compensation or payment of monies how so
ever characterized is due to White upon or subsequent to such termination of the
Employment Agreement or termination of his employment.
2. White acknowledges that, effective August 31, 1999, White's employment with
ILGN will be terminated. ILGN hereby acknowledges and agrees that White shall be
entitled to retain the laptop computer, facsimile machine, and printer that
White currently has in his possession. White also agrees that he will return his
corporate American Express card on September 30, 1999, and ILGN will continue to
pay for the telephone and fax lines to his home office until September 30, 1999.
ILGN acknowledges that the desk, credenza and coat rack being utilized in one of
the ILGN offices are the property of White, and White agrees that ILGN is
entitled to use such property until White asks for its return or until ILGN
wishes to return it to White, which ever occurs earlier.
3. In consideration for the release contained herein, ILGN agrees to pay White,
by ILGN check on the eighth day following White's execution of this Agreement
and provided White has not revoked this Agreement in the seven-day period
following his execution of this Agreement, a lump sum payment equal to
$104,673.99 (less standard legal deductions). White acknowledges that this lump
sum payment includes total payment due him for accrued vacation under the
Employment
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Agreement. White releases the Company from all liabilities under, and
all obligations to perform or observe any term or provision of, the Employment
Agreement.
4. In further consideration for the release contained herein, ILGN agrees to pay
each month for 18 months for the cost of White's COBRA health insurance for he
and his immediate family, provided that White completes the paperwork for
conversion of his current coverage to COBRA coverage within the prescribed
statutory timeframe. This reimbursement is for coverage for the time period
September 1, 1999 to February 28, 2001. White acknowledges that ILGN has
provided him with the paperwork for COBRA conversion.
5. ILGN also agrees to fully vest White's ILGN stock options. ILGN also agrees
to convert each of his four option grants from incentive stock options to
non-qualified stock options under the 1996 Equity Incentive Plan. White
acknowledges that ILGN has provided him with amendments to each of his four
stock option grants which provide for full vesting and conversion to
non-qualified stock options. The table below lists White's four stock option
agreements, each of which have been amended to reflect full vesting and
conversion to restricted stock options.
---------------------------------------
# OF STRIKE
DATE OF GRANT OPTIONS PRICE
---------------------------------------
1/1/97 10,000 $2.04
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5/1/97 15,000 $2.75
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12/1/98 5,312 $1.50
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3/18/99 14,166 $0.75
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6. ILGN shall pay White his full salary through August 31, 1999 and no other
compensation or benefits shall be paid to White under the Employment Agreement
or otherwise. Effective August 31, 1999, White shall not be entitled to any
benefits (including medical and other insurance) from ILGN and shall not be a
participant in ILGN's 401(k) Plan or the ILGN Profit Sharing Plan; provided,
however, nothing herein shall effect White's eligibility to elect the
continuation of health care coverage pursuant to Title X of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").
7. Each of White and the Company releases, remises, acquits and discharges the
other party and their predecessors and affiliates, and their divisions,
officers, directors, agents, employees, consultants, independent contractors,
attorneys, advisers, successors and assigns, jointly and severally, from any and
all claims, known or unknown, which releasing party, their heirs, successors or
assigns have or may have against any of such parties and any and all liability
that any of such parties may have to the released party whether denominated
claims, demands, causes of action, obligations, damages or liabilities arising
from any and all bases, however denominated, including but not limited to claims
of discrimination under the Age Discrimination in Employment Act, as amended,
Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of
1991, the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, 42 U.S.C. ss. 1981, the Texas Commission on Human Rights
Act, or any other U.S. federal, state or local law or any other law, rule or
regulation or workers' compensation or disability claims under any such laws.
This release relates to claims arising from and during White's relationship with
ILGN and its predecessors and affiliates or as a result of the termination of
such relationship. This release is for any relief, no matter how denominated,
including but not limited to wages, back pay, front pay,
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repayment of moving expense reimbursement, compensatory damages or punitive
damages. Each party further agrees that they will not file or permit to be filed
on their behalf any such claim. This release shall not apply to (i) the
obligations set forth in this Agreement or those under the Confidentiality
Agreement (as defined hereafter), (ii) ILGN's obligation to defend, indemnify
and hold harmless White under its indemnification obligations to Officers and
Directors under its Bylaws, or (iii) any other claims based on acts or omissions
of any released party first occurring after the date on which he signs this
Agreement.
8. For a period of one year, beginning September 1, 1999 and ending August 31,
2000, White agrees that he will not, directly or indirectly, work for, provide
consulting services on his own behalf for, own an interest in (excluding a
passive investment in a public company where White owns less than 5% of the
stock of such company), operate, join, control, or participate in, or be
connected as an officer, employee, agent, independent contractor, partner,
shareholder, or principal of any corporation, partnership, proprietorship, firm,
or association which conducts research and/or develops genetic diagnostics in
clinical fields where ILGN currently is marketing or developing products,
without the prior written consent of ILGN. This clause shall not restrict White
from providing professional legal services to any Company.
9. This Agreement does not affect White's obligations or ILGN's rights under the
Confidentiality and Invention Assignment Agreement ("Confidentiality Agreement")
dated as of January 1, 1996, by and between ILGN and White; or any other
confidentiality, secrecy or proprietary information or intellectual property
agreement; or any laws governing such matters.
10. White acknowledges he received a copy of this Agreement on September 21,
1999. White shall have until and including October 12, 1999, to accept and
consider this Agreement, a period White acknowledges to be twenty-one (21) days
following receipt of this Agreement.
11. This Agreement shall not become effective and enforceable until seven (7)
days following its execution. White may revoke this Agreement in a writing
delivered to and received by U. Xxxxxxx Xxxxx, CFO, Interleukin Genetics, Inc.,
000 X.X. Xxxx 000, #000, Xxx Xxxxxxx, Xxxxx 00000, within said seven (7) days.
12. This Agreement is personal to White and, without the prior written consent
of the Board of Directors of ILGN, shall not be assignable by White otherwise
than by will or the laws of descent and distribution. The terms of this
Agreement shall be binding and inure to the benefit of the parties hereto and
their affiliates and their respective successors and assigns. The terms of this
Agreement may be changed, modified or discharged only by an instrument in
writing signed by the parties hereto. This Agreement shall be construed,
enforced and interpreted in accordance with applicable federal law and the laws
of the State of California without reference to its principles of conflicts of
law. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be original.
13. The parties each agree that White is no longer an employee of ILGN. White
shall take no unilateral action or incur any expense, and has no express or
implied authority to do either, on behalf of ILGN, as an independent contractor,
a consultant or otherwise, unless he has received written instructions from
ILGN's President to so proceed. White further represents that he maintains a
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separate place of business, serves customers other than ILGN, has all necessary
permits and licenses to conduct the services under this Agreement, withholds and
pays all state and federal income, social security, disability and insurance
taxes and maintains adequate insurance. The parties further agree that nothing
contained in this Agreement shall be construed to place them in the relationship
of partners, principal and agent, employer/employee or joint venturers.
14. The failure of either party at any time to enforce any of the provisions of
this Agreement or to require performance by the other party of any provision
hereof shall not be construed to be a waiver of such provisions or to affect the
validity of this Agreement, or of any part hereof, or of the right of either
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
15. Written notices required or furnished under this Agreement shall be sent to
the following addresses:
to ILGN: U. Xxxxxxx Xxxxx
Interleukin Genetics, Inc.
000 X.X. Xxxx 000, #000
Xxx Xxxxxxx, Xxxxx 00000
to White: Xxxx X. Xxxxx
000 Xxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
16. Notices shall be effective on the first business day following receipt
thereof. Notices sent by mail shall be deemed received on the date of delivery
shown on the return receipt.
17. This Agreement represents and contains the entire agreement between the
parties hereto with respect to the subject matter hereof, and the terms of this
Agreement are contractual and not a mere recital. Further, this Agreement
supersedes any and all prior oral and written agreements and understandings, and
no representation, warranty, condition, understanding, or agreement of any kind
with respect to the subject matter hereof shall be relied upon by the
undersigned unless incorporated herein.
18. Except for the provisions of Paragraph 7 regarding the Confidentiality
Agreement, with respect to which the Company expressly reserves the right to
petition a court directly for injunctive and other relief, any claim, dispute or
controversy of any nature whatsoever, including but not limited to tort claims
or contract disputes, between the parties to this Agreement or their respective
heirs, executors, administrators, legal representatives, successors and assigns,
as applicable, arising out of or relating to the terms or conditions of this
Agreement or the Employment Agreement hereby terminated, including the
implementation, applicability and interpretation thereof, shall be resolved
exclusively as follows: Upon the written request of one party served upon the
other, any such claim, dispute or controversy shall be submitted to and settled
by arbitration in accordance with the provisions of the Federal Arbitration Act,
9 U.S.C. xx.xx. 1-14, as amended. If arbitration is requested, each of the
parties to this Agreement shall
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appoint one person as an arbitrator to hear and determine any such disputes. The
two arbitrators shall then choose a third arbitrator from a panel made up of
experienced arbitrators selected pursuant to the procedures of the American
Arbitration Association (the "AAA"). The majority decision of the three
arbitrators shall be final, binding and conclusive upon the parties to this
Agreement. Each party shall be responsible for the fees and expenses of its
arbitrator and the fees and expenses of the third arbitrator shall be shared
equally by the parties; PROVIDED, HOWEVER, to the extent possible, the
arbitrators shall, as part of their decision, provide that the non-prevailing
party shall pay all costs incurred by the prevailing party (including fees and
costs of the arbitrators and the prevailing party's legal counsel). The terms of
the commercial arbitration rules of AAA shall apply except to the extent they
conflict with the provisions of this paragraph. Arbitration shall take place in
San Antonio, Texas. It is further agreed that any of the parties hereto may
petition the United States District Court for the State of Texas for a judgment
to be entered upon any award entered through such arbitration proceedings.
(a) The parties hereto acknowledge that their legal counsel has advised
them, and that they are familiar with, the provision of Section 1542 of the
California Civil Code, 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."
(b) Being aware of said Civil Code Section 1542, the parties hereto
expressly waive and relinquish any rights or benefits they may have thereunder,
as well as under any other state or federal statutes or common law principles of
similar effect.
IN WITNESS WHEREOF, ILGN has caused this Agreement to be executed by its
duly authorized officer, and White has executed this Agreement, in each case as
of the date first above written.
Interleukin Genetics, INC.
By: _______________
Name: U. Xxxxxxx Xxxxx
Title: C.F.O.
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Xxxxx acknowledges that he has read the foregoing Agreement and knows its
contents and fully understands it. White acknowledges that he has been advised
to consult with an attorney prior to executing this Agreement, has had such
opportunity, and he is executing the Agreement voluntarily, fully understanding
the significance and consequences of this Agreement.
WHITE
_____________
Xxxx X. Xxxxx
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