Attached files
| file | filename |
|---|---|
| 10-K - Protagenic Therapeutics, Inc.\new | v178944_10k.htm |
| EX-23.1 - Protagenic Therapeutics, Inc.\new | v178944_ex23-1.htm |
| EX-31.1 - Protagenic Therapeutics, Inc.\new | v178944_ex31-1.htm |
| EX-31.2 - Protagenic Therapeutics, Inc.\new | v178944_ex31-2.htm |
| EX-21.1 - Protagenic Therapeutics, Inc.\new | v178944_ex21-1.htm |
| EX-32.1 - Protagenic Therapeutics, Inc.\new | v178944_ex32-1.htm |
| EX-10.21 - Protagenic Therapeutics, Inc.\new | v178944_ex10-21.htm |
| EX-10.20 - Protagenic Therapeutics, Inc.\new | v178944_ex10-20.htm |
| EX-10.23 - Protagenic Therapeutics, Inc.\new | v178944_ex10-23.htm |
SEPARATION
AGREEMENT AND MUTUAL RELEASE
This Separation Agreement and Mutual
Release (this “Agreement”), dated as of October 20, 2009, is entered into by and
between Atrinsic, Inc., a Delaware corporation (the “Company”), and Burton Katz, an individual
("Executive"').
|
A.
|
The
Company and Executive entered into that certain Employment Agreement.
dated February 1, 2008, and as amended on June 25, 2009 (the “Employmeut
Agreement”). pursuant to which the Company retained Executive, as
more fully described therein: and
|
|
B.
|
As a result of the decision by
Executive to terminate his employment for good reason, the Company and Executive desire to
enter into this Agreement to document Executive's separation from the
Company, effective as of October 6, 2009 (the “Termination
Date”).
|
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Termination of Employment
Agreement. Notwithstanding anything to the contrary which may be
contained in the Employee Agreement, the parties hereby acknowledge and agree
that, effective as of Termination Date:
1.1 Executive
is no longer employed by the Company in any capacity and shall no longer serve
as a Director and Chief Executive Officer of the Company.
1.2 Except
with respect to the Company's indemnification and director and officer liability
insurance obligations under Section 20 thereof, the Employment Agreement is
terminated and of no further force or effect.
1.3 Except
as expressly provided herein, all responsibilities, duties and obligations of
Executive to the Company and of the Company to Executive under the Employment
Agreement shall be terminated and of no further force or effect.
2. Termination Payment.
As full and complete consideration for the covenants hereunder, the Company
shall pay Executive an amount equal to $850,000 (the “Termination
Payment”). The Company shall pay fifty percent of the Termination Payment
($425,000) in a lump sum paid by wire transfer promptly following the Effective
Date to the account provided by Executive on the signature page hereto, and
shall pay the remaining fifty percent of the Termination Payment ($425,000) in
twenty-four (24) equal monthly installments on or before the fifth (5th) day of each
calendar month, commencing in the calendar month immediately following the
Effective Date, until paid in full. Except as otherwise provided in this
separation agreement, Executive acknowledges that the Termination Payment set
forth herein fully satisfies all obligations of the Company to Executive,
including under the Employment Agreement (whether attributable to salary, bonus
payments, benefit plans, vacation pay, automobile allowance, expenses or other
amounts). The parties acknowledge that all amounts due to Executive (other than
amounts provided for in this Agreement), including all accrued salary and
accrued vacation, have been paid to Executive prior to, or concurrently with,
the execution of this Agreement.
1
Notwithstanding
the foregoing, the Company agrees that it shall continue to be obligated to
repay all balances on Company credit cards incurred by Executive to the extent
such amounts represent expenses incurred pursuant to the Company's existing
policies for business expenses prior to the date of this Agreement.
3. Additional Covenants of the
Company and Executive.
3.1 The
Company granted Executive: (i) an option to purchase 363,184 shares of common
stock, at an exercise price of $2.34 per share, on August 6, 2006 and (ii) an
option to purchase 81,250 shares of common stock, at an exercise price of $6.00
per share, on February 16, 2007 (the "Employee
Option Agreements"). The Company agrees
that all options under the Employee Option Agreement are vested and the period
to exercise such options under the Employee Option Agreements is extended to
October 5, 2010. The Company and Executive acknowledge and agree that Executive
holds no other options to purchase securities of the Company, the Employee
Option Agreements- are the
only option agreements between the Company and Employee that are currently in
effect and that all other option agreements entered into between the Company and
Executive and options granted by the Company to Executive have been (or are
hereby) terminated.
3.2 The
Company granted Executive: (i) restricted stock units for 275,000 shares of
common stock on June 25, 2009 and (ii) restricted stock units for 100,000 shares
of common stock on June 25, 2009 (the “RSU’s”). The Company and
Executive acknowledge and agree, effective as of the Termination Date, the
RSU's, and all rights of Executive to receive shares of common stock of the
Company thereunder, are terminated.
3.3 The
Company shall continue to provide Executive with coverage under all medical and
dental benefit plans offered by the Company, or at the option of the Company,
pay Executive an amount necessary for Executive to obtain substantially similar
coverage, until the earlier of (i) the second anniversary of the Termination
Date or (ii) the date Executive is eligible to receive similar benefits from a
new employer. The Company shall continue to pay the premiums on the $5,000,000
term life insurance policy obtained pursuant to Section 3(e) of the Employment
Agreement until the second anniversary of the Termination Date. Executive will
promptly notify the Company when he becomes eligible to receive any benefits
from a new employer.
3.4 Notwithstanding
anything to the contrary in his Agreement, the Company acknowledges and agrees
that the Company's obligations to Executive under section 20 of the Employment
Agreement shall survive the termination of such Agreement and shall remain in
full force and effect as provided for therein. Without limitation, the Company
acknowledges and agrees that it shall continue to defend, indemnify and hold
Executive harmless, and maintain directors and officers liability insurance in
full force and effect as provided for in section 20 of the
Agreement.
3.5 Neither
party shall make any statement or allegation to any third party, nor make any
public announcement, press release or broad-tape release, public speech or
permit press interviews, which expressly or impliedly indicates that the other
party breached or defaulted under any obligation or commitment to it, or which
might reasonably have the effect of disparaging such other party or injuring or
harming the personal or business reputation of the other party.
2
4. Non-Competition Non-Solicitation and
Confidentiality Agreement. The parties each acknowledge and agree that
the Non-Competition, Non-Solicitation and Confidentiality Agreement, entered
into between the Company and Executive on February 1, 2008 (the "Confidentiality
Agreement"), shall survive execution of this Agreement; provided,
however, the Confidentiality Agreement is hereby amended so that Executive's
restrictions and obligations set forth in Section 2 (Non-Competition) of the
Confidentiality Agreement expire sixteen (16) months following the Termination
Date.
5. Mutual
Release.
5.1 Executive's
Release. Subject to Section 5.3, Executive, for
himself and on behalf of
his successors, assigns, agents, attorneys, representatives, heirs, executors
and administrators (collectively, the "Executive
Parties" and individually,
an "Executive
Party"), hereby releases
and forever discharges and
agrees to hold harmless the Company and its successors, assigns, officers, directors, stockholders,
employees, affiliates, subsidiaries, parent corporations, agents, attorneys and representatives, past and
present (collectively, the "Company
Parties" and individually, a "Company
Party") from any and all
demands, claims, duties, actions, obligations or causes of action, assessments,
losses, damages, liabilities, costs and expenses (including attorneys' fees) of any kind, nature or
description, whether known or unknown, suspected or unsuspected, fixed or contingent
(collectively, the "Released
Claims"), that Executive
or any Executive Party
currently has or possesses, or had prior to the date of this Agreement or at any
time may have the Company and/or against one or more Company Parties, arising
out of, based upon or in
any way related to (i) any employment agreement or the Employment Agreement or
any other contracts,
express or implied, any covenant of good faith and fair dealing, express or
implied, any theory of
wrongful discharge, negligence, negligent or intentional infliction of
emotional distress,
negligent or intentional interference with contract or prospective economic
advantage, negligent or intentional misrepresentation, conspiracy, defamation
(including libel and
slander), invasion of privacy, fraud, quantum meruit, failure to pay
compensation of any kind, failure to pay equal compensation for equal work or
any legal restriction on the Company's right to terminate employees; (ii)
Executive's employment with the Company or the cessation thereof, any claims for
wages, compensation of any kind, automobile allowance, vacation pay,
severance pay, bonuses or
damages of any kind whatsoever, including without limitation all claims for or under, among
other things, Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. sections 2000e,
et
seq.), the
Fair Labor Standards Act, including the Equal Pay Act (29 U.S.C. section 206(d)
and interpretive regulations), the Employment Retirement Income Security Act of 1974 (29
U.S.C. sections 100, et seq.),
the Family
and Medical Leave Act (29 U.S.C. sections 2601,
et
seq. and 29
C.F.R. Part 825), the Americans with Disabilities Act (42 U.S.C. sections 12101,
et
seq.), the
Age Discrimination in Employment Act, including the Older Worker Benefits
Protection Act (29 U.S.C. sections 623, et seq.), the Worker Adjustment and
Retraining
Notification Act (29 U.S.C. sections 2101, et seq.)
and any other
federal or state law, whether statutory or
common law; (iii) all matters arising out of any common law or federal,
state, local
or other governmental statute, regulation, ordinance or wage order, including
any federal,
state or local law (statutory or decisional) or regulation relating to
employment, employment discrimination
or harassment; or (iv) arising out of any principle of contract law or
common
law.
3
5.2 The Company's
Release. Subject to Section 5.3, the Company, for itself and on behalf of
the Company Parties, hereby releases and forever discharges and agrees to hold
harmless Executive and each of the Executive Parties from any and all Released
Claims that the Company or any Company Party currently has or possesses, or had
prior to the date of this Agreement or at any time may have against Executive
and/or one or more Executive Parties, arising out of, based upon or in any way
related to the Employment Agreement or Executive's employment with the Company,
or any other matter of any nature whatsoever.
5.3 Claims not Released.
The releases set forth in this Section 5 shall not (i) release obligations
incurred pursuant to this Agreement; (ii) release claims in connection with
events occurring after the date hereof (including without limitation, for any
breach of the Confidentiality Agreement); or (iii) preclude any party hereto
from enforcing its rights and remedies hereunder.
5.4 Release of Unknown
Claims. Executive, for himself and on behalf of the Executive Parties,
and the Company, for itself and on behalf of the Company Parties (collectively,
the "Releasing
Parties") intend to waive and release all rights the Releasing Parties
may have under Section 1542 of the California Civil Code, and under any similar
law of any other jurisdiction, which provides as follows:
“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT NOW 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.”
The
Releasing Parties hereby waive the provisions of Section 1542 of the California
Civil Code and any other similar law of any other jurisdiction and acknowledge
that this waiver is an essential and material term of this Agreement. Executive
further acknowledges that his counsel has advised him as to the effect of the
foregoing waiver.
5.5 Executive's
Acknowledgement. Executive
knowingly and voluntarily, of his own free will without any duress, being fully
informed and after due deliberation, accepts the terms of this Agreement,
including without limitation, the releases set forth in this Section 5, and
signs the same as his own free act. Executive understands that as a result of executing this
Agreement, Executive will not have the right to assert that the Company
unlawfully terminated his employment or violated any of his rights.
5.6 Third Parties Bound.
Each party hereto shall cause each of its successors, assigns, agents,
attorneys, representatives, heirs, executors, administrators, officers,
directors, shareholders, employees, affiliates, subsidiaries, parent
corporations, attorneys and representatives, as the case may be, to be bound by
this Agreement to the extent that it has the power to do so.
4
6. Effective
Date. Executive may take up to twenty-one
(21) days to consider this Agreement. Executive affirms that he
was advised to consult with an attorney before signing this Agreement and was
given ample opportunity to do so. This Agreement will become binding and
effective upon the date it
is signed by Executive (the "Effective Date").
7. Mutual Representations and
Warranties. Each of the Company and Executive (each, a "Representing Party") represents and
warrants to the other that:
7.1 The
Representing Party has all necessary power and authority to enter into this
Agreement and has taken all action necessary to consummate the transactions
contemplated hereby and to perform each of their respective obligations
hereunder.
7.2 The
Representing Party has duly executed and delivered this Agreement, and this
Agreement is a legal, valid and binding obligation of the Representing Party,
enforceable against the Representing Party in accordance with its
terms.
7.3 None
of the execution, delivery or performance of this Agreement, the consummation of
the transactions contemplated hereby, nor compliance by such Representing Party
with any of the provisions hereof, will violate or conflict with any agreement
by which the Representing Party is bound, and that no notices to, declaration,
filing or registration with, approvals or consents of, or assignments by, any
persons or entities are necessary to be made or obtained by the Representing
Party in connection with the execution, delivery or performance of this
Agreement.
7.4 The
Representing Party has not assigned or transferred, in
whole or in part, or purported to assign or transfer any claim or portion
of claim against the other party hereto which is covered by this Agreement which
it may now have or claim to have, of whatever kind or nature, either in its
representative or in its individual capacities, to any other person or entity in
any manner including, without limitation, assignment or transfer by subrogation
or by operation of law.
8. Severability. The
parties hereto agree that if any term, provision, covenant or condition of this
Agreement is found to be invalid, illegal or unenforceable, then the parties
hereto shall renegotiate such term, provision, covenant or condition in good
faith to effectuate its/their purpose and to conform the provision(s) to
applicable law to make such term valid, legal and enforceable, or if such term,
provision, covenant or condition may not be amended or modified so as to become
valid, legal and enforceable, then such term, provision, covenant or condition
shall be deemed excised from this Agreement, and the remaining terms and
conditions hereof shall remain in full force and effect and shall in no way be
impaired or invalidated thereby.
9. Successors and
Assigns;
Assignment. This Agreement shall
inure to the benefit of, and shall be binding upon, the successors,
heirs, and assigns of the parties hereto, This Agreement may not be assigned by
either party hereto without the prior written consent of the other; provided,
that the Company and the Company Parties may assign this Agreement in
whole or in part to any person or entity which succeeds to all or a portion of
such person's or entity's rights (whereupon such assignor and assignee shall
both benefit from this Agreement).
5
10. Third Party
Beneficiaries. The parties hereto expressly agree that the Executive
Parties and the Company Parties shall be third-party beneficiaries of this
Agreement.
11. Arbitration. In the
event of a disagreement or dispute between the Company and Executive related to
this Agreement, the matter will be finally settled in New York, New York, by
expedited arbitration by a single arbitrator in a proceeding conducted under the
expedited rules of the American Arbitration Association or any similar successor
body, the arbitrator also apportioning the costs of the arbitration, including
the fees of the arbitrator. The arbitrator shall be selected by the Company and
Executive each providing the other with a list of five (5) proposed arbitrators
within five (5) business days of notice of arbitration and if one or more
arbitrators appears on each of such lists, the Company and Executive shall
provide each other with a list of an additional five (5) arbitrators within two
(2) business days. If no arbitrator is named on both of such lists (including
the previously provided list), the Company and Executive shall each appoint an
arbitrator, who shall jointly appoint a third arbitrator. Such arbitrators shall
act as an arbitration panel. As used herein, the term "arbitrator"
shall include the arbitration panel, if applicable. The decision of the
arbitrator in writing shall be final and binding upon the parties hereto and
will not be subject to appeal. If either party hereto fails to abide by such
decision, the other may seek the order of a court which shall enter judgment on
the decision of the arbitrator, and the party hereto so failing to abide shall
be responsible for the payment of the expenses of the court proceeding and all
resulting enforcement expenses, including reasonable attorneys' fees. The
Company and Executive shall instruct the arbitrator that a written decision is
to be rendered within three (3) months of the appointment of the arbitrator and
any party hereto causing unreasonable delay shall be subject to sanctions by the
arbitrator.
12. Attorneys' Fees. If
any party hereto brings any action to enforce or interpret any term of this
Agreement (including pursuant to Section 11), the non-prevailing party in any
such action shall pay all the reasonable attorneys' fees, expenses and costs
incurred by the other in connection with any such action.
13. Governing Law. This
Agreement and all matters arising hereunder or in connection herewith shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflicts of law principles.
14. Further Assurances.
Upon the terms and subject to the conditions contained herein, the parties
hereto agree (a) to use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (b) to execute any documents, instruments or agreements of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (c) to cooperate with each other in
connection with the foregoing.
15. Entire Agreement.
This Agreement sets forth the entire understanding between the parties hereto
and, except for the Confidentiality Agreement, supersedes any prior or
contemporaneous written or oral agreements or understandings pertaining to the
terms hereof and the termination of Executive's employment relationship with the
Company. The parties hereto agree that, except as expressly provided herein, any
prior agreements and understandings between them, whether oral or written, and
of whatever nature, are hereby cancelled, terminated and superseded by this
Agreement and shall be of no further force or effect. For the avoidance of
doubt, the Confidentiality Agreement shall not be superseded by this Agreement,
but shall be modified as provided herein. Executive acknowledges that he has not
relied upon any representation or statements by any representative of the
Company concerning the subject matter hereof except as expressly set forth
herein. This Agreement may only be modified by a writing signed by each party
hereto.
6
16. Non-Admission of Liability
or Wrongdoing. By entering into this Agreement, neither party hereto
admits any impropriety, illegality, wrongdoing or liability of any kind
whatsoever, and each party hereto hereby expressly denies the same.
17. Tax Withholding. All
amounts required to be paid by the Company pursuant to this Agreement shall be
subject to reduction in order to comply with applicable Federal, state and local
tax withholding requirements.
18. Notice. Any notice to
be provided hereunder shall be in writing and shall be deemed to have been
delivered (a) the day of delivery, if personally delivered, (b) three (3) business days after having
been mailed via U.S. mail, registered or certified mail, return receipt
requested, postage prepaid, or (c) one (1) business day after having been sent
by national reputable overnight courier. Notices shall be addressed to the
parties hereto at the addresses set forth on the signature pages hereto. Any
party hereto may change the address for notices hereunder by delivery of written
notice in accordance with the provisions set forth herein.
19. Facsimile;
Counterparts. This Agreement may be executed by facsimile and in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
20. Headings. The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
[Remainder
of page intentionally left
blank Signature page follows.]
7
IN
WITNESS WHEREOF, the parties hereto hereby execute this Agreement as of the date
first above written.
|
ATRINSIC,
INC.,
|
|||||
|
a
Delaware corporation
|
|||||
|
/s/
Burton Katz
|
By:
|
/s/
Jerome A. Chazen
|
|||
|
Burton
Katz
|
Name:
|
Jerome
A. Chazen
|
|||
|
Title:
|
Chairman
of Board
|
||||
|
Address:
|
Address:
|
||||
|
Attn:
|
|||||
|
Tel:
|
Tel:
|
||||
|
Fax:
|
Fax:
|
||||
8