EHIBIT 10.9
SEPARATION AGREEMENT AND RELEASE
THIS SEPARATION AGREEMENT AND RELEASE ("Agreement") is made and entered
into as of July 15, 2005 ("Execution Date") by and between Cytomedix, Inc.
("Cytomedix" or "Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (hereinafter referred to as
"Employee").
1. Purpose of Agreement
1.1 On March 25, 2004, the Company and the Employee executed a letter
agreement providing the terms of the Employee's employment with the Company
("Original Agreement"). On September 30, 2004, this Original Agreement was
amended by an Addendum to the Employment Agreement between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and Cytomedix, Inc., dated March 25, 2004 and effective November 15, 2003 (the
"Addendum"). The Original Agreement and the Addendum are hereinafter referred to
collectively as the "Employment Agreement."
1.2 Paragraph D of the Addendum provided that the Company and the Employee
were to negotiate a new one-year employment agreement on or about April 20,
2005. Paragraph F of the Addendum provided the terms of a severance package to
be awarded to the Employee in the event that the Company and the Employee are
unable to agree upon the terms of a new employment agreement. Paragraph F of the
Addendum also provided that the Executive agreed to remain employed by the
Company to recruit and train his successor for a maximum of ninety (90) days.
For each thirty-day or partial period in which recruiting and training is
necessary, the severance period would be reduced fifteen days or at a ratio or
two to one up to one and one-half (1 1/2) months. The parties were unable to
negotiate a satisfactory one-year employment agreement as is referenced above
and have agreed to the terms of Employee's departure from the Company. By the
terms of this Agreement, the parties have agreed to set forth their final
agreement regarding the termination of Employee's employment with the Company
and the duration of the severance period.
1.3 Both the Company and the Employee agree that Employee's departure is
not due to any disagreement regarding accounting principles or practices
utilized by the Company or financial statement disclosures made by the Company,
nor is the Employee's departure the result of the Company's dissatisfaction with
the Employee's performance as Chief Financial Officer or the Employee's
dissatisfaction with any aspect of the Company's management, policies or
actions. Rather, due to ancillary circumstances caused in large part by the
considerable travel required of Employee during his employment and the inability
to reach a mutually acceptable relocation arrangement, the Company and the
Employee agree that the Employee's departure is in the best interest of both
parties.
1.4 The Company desires and the Employee has agreed that Employee will
remain with the Company as its Chief Executive Officer and Secretary until
August 15, 2005 (the "Resignation Date"). Both parties have agreed that the
Resignation Date shall be the last day of Employee's employment with the
Company. The Employee represents and warrants that during this period, and as of
the Resignation Date, he has disclosed to the Chief Executive Officer and the
Audit Committee of the Company all material facts in his knowledge or possession
which relate or pertain to the Company.
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Separation Agreement and Release Page 1
1.5 The parties have agreed that in return for the consideration granted
Employee in this Agreement, Employee will be available by telephone for
consultation with the Company for a period of three (3) months following the
Resignation Date.
1.6 The Company and Employee have agreed to enter into this Agreement for
the purpose of setting forth their arrangement and understanding regarding the
Employee's departure from the Company, the termination of his employment
relationship with the Company, and the provision of consulting services
following the termination of his employment.
2. Termination of Employment; Consultation:
2.1 Employee hereby tenders his voluntary resignation as Chief Financial
Officer and Secretary of the Company as of the Resignation Date. The Company
hereby accepts such resignation.
2.2 In consideration of this Agreement and the items of consideration
provided in paragraph 3 below, Employee hereby agrees that from August 16, 2005,
until November 16, 2005, he will be available by telephone during reasonable
business hours to provide consulting services to the Company.
3. Consideration:
3.1 Employee and Company both agree that this Agreement contains
compensation or benefits to which each is not otherwise entitled.
3.2 Pursuant to the Original Agreement and the Stock Option Grant Notice
issued in conjunction therewith, the Employee received options to purchase
175,000 shares of the Company's common stock at a price of $1.50 per share.
These options vested on November 15, 2004. As provided in the Addendum, the
Company has agreed to extend the expiration date of these options, and has
agreed to a cashless exercise provision, as is provided in the Amended Stock
Option Grant Notice which is attached to this Agreement as Appendix A.
3.3 The Employee shall continue to receive his regular salary until
January 22, 2006.
3.4 Premiums for the medical and dental programs that Employee is enrolled
in as of the Resignation Date shall continue to be paid by the Company until
January 22, 2006; provided, however, that Employee shall continue to pay the
employee portion of such premiums.
3.5 All accrued and earned vacation as of the Resignation Date shall be
paid to Employee upon the Resignation Date.
4. No Current Claims:
4.1 Employee warrants and represents that he is not presently a named
plaintiff in any law suit, filed in any jurisdiction, against Company and that
he has not filed a charge with the United States Equal Employment Opportunity
Commission or any other administrative agency against Company. In the event that
this warranty and representation is incorrect, Company shall have the absolute
right to terminate this Agreement, and to demand and have immediately returned
to Company all consideration paid by it to Employee pursuant to this Agreement.
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4.2 Company is hereby indemnified and held harmless by Employee for any
breach of the warranty and representation contained in this Section 4, and to
recover from Employee all costs and expenses incurred as a result of Employee's
breach of the warranty and representation contained in this Section 4, and all
costs and expenses incurred in defending any now pending legal or administrative
proceeding, not referenced in this Section 4, in which Employee is a named
plaintiff, claimant or petitioner. Costs and expenses, for purposes of this
Section 4, shall include, but not be limited to, attorneys' fees and other legal
costs.
5. Covenant Not to ▇▇▇ and Release:
5.1 Except for the rights and obligations provided by or arising under
this Agreement, Employee hereby releases, acquits, withdraws, retracts and
forever discharges any and all claims, manner of actions, causes of action, in
law or in equity, suits, judgments, debts, liens, contracts, agreements,
promises, liabilities, demands, damages, losses, costs, expenses or disputes,
known or unknown, fixed or contingent, which he now has or may have hereafter,
directly or indirectly, personally or in a representative capacity, against
Company, and its predecessors, successors, administrators, attorneys,
fiduciaries, officers, directors, shareholders, representatives, agents,
employees, and all persons acting through or in connection with Company, by
reason of any act, omission, matter, cause or thing whatsoever, from the
beginning of time to, and including, the Resignation Date. This General Release
includes, but is not limited to, all claims, manner of actions, causes of action
in law or in equity, suits, judgments, debts, liens, contracts, agreements,
promises, liabilities, demands, damages, losses, costs, expenses or disputes,
known or unknown, fixed or contingent, which arise under the Employment
Agreement; Title VII of the Civil Rights Act of 1964, as amended; The Age
Discrimination in Employment Act of 1967, as amended; The Americans with
Disabilities Act; The Rehabilitation Act of 1973, as amended; The Family and
Medical Leave Act, as amended; 42 U.S.C. ▇▇.▇▇. 1981 through 1988, as amended;
any federal, state or local statute or ordinance, all as amended; common law
claims of breach of contract, intentional or negligent infliction of emotional
distress, negligent hiring, breach of the covenant of good faith and fair
dealing, promissory estoppel, negligence, wrongful termination or employment,
interference with prospective economic advantage, violation of civil rights and
all other claims of any type or nature including any claims for attorneys' fees.
The parties intend that this release shall discharge all claims against the
released parties to the extent permitted by law.
5.2 Employee represents and warrants that he has not heretofore assigned
or transferred, or purported to assign or transfer, to any person or entity, any
claim that is a subject of this Agreement or any portion thereof or interest
therein, and agrees to indemnify, defend, and hold Company harmless from any and
all claims based on or arising out of any such assignment or transfer, or
purported assignment or transfer, of any claims, or any portion thereof or
interest therein.
5.3 Nothing in this Agreement is or should be construed as a release by
Employee of, or an agreement by Employee not to ▇▇▇ on, any charges, complaints,
claims, liabilities, obligations, promises, agreements, controversies, damages,
costs, losses, debts, or expenses arising out of any matter, cause, acts,
conduct, claims, or events which may occur after the Resignation Date.
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5.4 Except for the rights and obligations provided by or arising under
this Agreement, the Company hereby releases, acquits, withdraws, retracts and
forever discharges any and all claims, manner of actions, causes of action, in
law or in equity, suits, judgments, debts, liens, contracts, agreements,
promises, liabilities, demands, damages, losses, costs, expenses or disputes,
known or unknown, fixed or contingent, which he now has or may have hereafter,
directly or indirectly, personally or in a representative capacity, against the
Employee by reason of any act, omission, matter, cause or thing whatsoever, from
the beginning of time to, and including, the Resignation Date.
6. No Admission of Liability or Wrongdoing:
6.1 Company and Employee agree and acknowledge that this Agreement is the
result of a compromise and shall never at any time for any purpose be construed
as an admission of any liability or wrongdoing on the part of any party. Company
specifically disclaims any liability to Employee or to any other person or
entity.
7. Confidentiality of Trade Secrets; Covenant Not to Compete
7.1 During the term of Employee's employment by Company, Employee has
acquired knowledge of confidential and proprietary information regarding, among
other things, Company's products and intellectual property, Company's present
and future operations, its current or potential customers, pricing strategies,
its compensation and incentive programs for employees and the methods used by
Company and its employees. Employee hereby agrees that he shall not directly or
indirectly use or disclose, any of the Company's Trade Secrets, as defined
hereinafter, that he may have acquired during the term of his employment. The
term "Trade Secret" as used in this Agreement shall mean information including,
but not limited to, technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers which:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of reasonable efforts by the Company to maintain
its secrecy.
7.2 Employee agrees and acknowledges that the confidentiality and
non-compete provisions contained in Exhibit A to the Original Agreement shall
continue to apply to Employee as provided therein.
7.3 Employee agrees and acknowledges that, if a violation of any covenant
contained in Section 7 and Exhibit A to the Original Agreement occurs or is
threatened, such violation or threatened violation will cause irreparable injury
to Company, that the remedy at law for any such violation or threatened
violation will be inadequate and that Company shall be entitled to appropriate
equitable relief.
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8. Property:
8.1 Employee agrees, warrants and represents that within seven days of
execution of this Agreement he will return all records, files, memoranda,
reports, price lists, customer lists, employee lists, employee files, drawings,
plans, sketches, documents, and the like (together with all copies thereof)
relating to the business of the Company, which Employee shall have used or
prepared or come in contact with in the course of, or as a result of, his
employment and agrees that he shall not hereafter cause removal of such
materials from the premises of the Company. Employee further agrees that upon
execution of this Agreement he will return all files, notes, documents and the
like related to his employment, including but not limited to any audio tapes of
conversation(s) with any current of former Company employee(s). Employee further
warrants and represents that within seven days of execution of this Agreement he
will return all office equipment and other items, all Company credit cards,
keys, parking cards, and all other property of every type and description
belonging to Company.
9. No Disparaging Statement:
9.1 Company and Employee shall refrain from making any disparaging
statement about the other or about any of Company's personnel. This specifically
excludes communications and opinions solicited by directors of the Company.
10. Voluntary Agreement:
10.1 Employee represents and agrees that he has had a full and adequate
opportunity to discuss and consider any claims against the Company. Further,
Employee represents and agrees that: (1) this Agreement is written in a manner
that he understands; (2) this Agreement and the promises made in this Agreement
by Employee are granted in exchange for the consideration which is granted to
Employee in this Agreement; (3) Employee has been advised to and has had an
opportunity to consult with an attorney prior to deciding whether to enter into
this Agreement; and (4) Employee has been given at least twenty-one days within
which to consider this Agreement.
10.2 This Agreement is executed with the full knowledge and understanding
on the part of Employee that there may be more serious consequences, damages or
injuries, which are not now known, and that any payment or benefits conferred
herein to Employee in consideration of this Agreement are accepted as final.
Employee further agrees and represents that it is within his contemplation that
he may have claims against Company of which, at the time of the execution of
this Agreement, he has no knowledge or suspicion, but he agrees and represents
that this Agreement extends to all claims in any way based upon, connected with
or related to the matters released herein, whether or not known, claimed or
suspected by him.
10.3 Company and Employee represent and acknowledge that in executing this
Agreement, they did not rely upon and have not relied upon any written or oral
representations or statements not expressly a part hereof that have been made by
any party to this Agreement, or by the agents, representatives, or attorneys of
any party with regard to the subject matter, basis, or effect of this Agreement.
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11. Advised to Consult an Attorney:
11.1 EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT.
12. Period for Review and Consideration:
12.1 Employee acknowledges that he received a copy of this Agreement and
was given a period of twenty-one days in which to review, consider and accept
the Agreement.
13. Employee's Right to Revoke:
13.1 Employee is advised that he may revoke this Agreement within seven
days of signing it. Revocation must be made by delivering written notice of the
revocation to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇. If this Agreement is revoked by Employee in
this seven day period, the Agreement will not be effective and enforceable as it
relates to the Employee's resignation as Chief Financial Officer and Secretary
of the Company.
14. Entire Agreement:
14.1 This Agreement sets forth the complete and exclusive statement of the
terms of the agreement between the parties hereto and fully supersedes any and
all prior agreements (oral or in writing) or understandings between the parties
hereto pertaining to the subject matter hereof.
15. Successors:
15.1 This Agreement shall be binding upon Employee and upon his heirs,
administrators, representatives, executors, and assigns. This Agreement shall
inure to the benefit of Company and its successors, and past, current and future
fiduciaries, officers, directors, shareholders, administrators, agents,
employees, and assigns.
16. Governing Law:
16.1 This Agreement shall be construed in accordance with the laws of the
State of Maryland.
17. Modifications:
17.1 This Agreement may be amended or modified only by a written
instrument, signed by Company and Employee, that expressly sets forth the
parties' intention to amend or modify this Agreement. No condition, term, or
provision of this Agreement may be waived by any party except in writing, signed
by the party or its authorized representative, that expressly sets forth the
party's intention to waive a condition, term or provision of this Agreement.
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18. Severability:
18.1 Should any provision of this Agreement be declared or be determined
by any court to be illegal or invalid, the validity of the remaining parts,
terms, or provisions shall be deemed not to be affected.
19. Authority to Execute Agreement:
19.1 Company represents and warrants that this instrument is a valid and
binding corporate action and that the person executing this instrument on behalf
of Company is duly authorized to do so on behalf of the Company.
EMPLOYEE COMPANY
CYTOMEDIX, INC.
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
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APPENDIX A TO SEPARATION AGREEMENT AND RELEASE
CYTOMEDIX, INC.
AMENDED STOCK OPTION GRANT NOTICE
UNDER THE CYTOMEDIX, INC. LONG-TERM INCENTIVE PLAN
Cytomedix, Inc. (the "Company"), pursuant to the Separation Agreement and
Release dated July 15, 2005 (the "Separation Agreement") and the Company's
Long-Term Incentive Plan (the "Plan"), hereby amends the Stock Option Grant
Notice dated February ___, 2004 (the "Original Award"), between the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as Optionholder, and agrees to amend the terms of the
Original Award as set forth below. Except as otherwise set forth below or in the
Separation Agreement, the terms of the Original Award, including the terms
provided in the Plan and the Stock Option Agreement and Notice of Exercise
issued to ▇▇. ▇▇▇▇▇▇▇▇ at the time of the Original Award, continue to govern
this Option and are incorporated herein in their entirety. The Separation
Agreement is the controlling document and prevails and is incorporated herein in
its entirety.
Optionholder: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Date of Grant: November 15, 2003
Vesting Commencement Date: November 15, 2003
Number of Shares Subject to Option: 175,000 shares of common stock
Exercise Price (Per Share): $1.50
Total Exercise Price: $262,500
Expiration Date: November 15, 2013
Type of Grant:
Nonqualified Stock Option representing 175,000 shares of common stock.
Exercise Schedule:
Same as Vesting Schedule; No Early Exercise Permitted
Vesting Schedule: The Option shall be fully vested.
Payment: By one or a combination of the following (described in the Stock
Option Agreement):
By cash or check; and/or
If the Company so allows:
Pursuant to a Regulation T Program or by delivery of already-owned shares;
and/or
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In lieu of exercising the Option by paying in cash or by check (of Regulation T
Program, if allowed), the Optionholder may from time to time elect to receive,
without the payment of any additional consideration, shares of Common Stock
equal to the value of the Option by surrender of the Option at the principal
office of the Company together with notice of such election, in which event the
Company shall issue to Optionholder a number of shares of Common Stock computed
using the following formula:
X = Y(A - B)
--------
A
Where: X = The number of shares of Common Stock to be
issued to Optionholder.
Y = The number of Shares purchasable under the Option at
the time of such exercise.
A = The fair market value of one share of Common Stock, at
the time of such exercise.
B = The Exercise Price of the Option.
The fair market value of one share of Common Stock as of a particular date shall
be, (i) in the event a public market exists for the Company's Common Stock on
the date of exercise, the closing bid price of one share of Common Stock on the
date of exercise or, (ii) if no public market exists for the Common Stock, as
mutually determined in good faith upon a review of all factors deemed
appropriate by the Company's Board of Directors; provided, that if the Option is
being exercised upon the closing of an initial public offering, the value shall
be the initial "price to the public" of one share of such Common Stock specified
in the final prospectus with respect to such offering.
Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Amended Grant Notice, the Stock
Option Agreement, the Plan, and the Separation Agreement. Optionholder further
acknowledges that as of the Date of Grant, this Amended Grant Notice, the Stock
Option Agreement, the Plan and the Separation Agreement set forth the entire
understanding between Optionholder and the Company regarding the acquisition of
stock in the Company and supersede all prior oral and written agreements on that
subject. However, in the event that there is a conflict among the terms in the
different documents referred to herein, the terms in the Separation Agreement
shall control.
EXECUTED as of the 15th day of July, 2005.
CYTOMEDIX, INC. OPTIONHOLDER:
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Ph.D Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director and Chief Executive Officer
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