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Exhibit 10.66
August 10, 2000
L. William McIntosh
31201 Paseo Miraloma
San Juan Capistrano, California 92675
Re: Acceptance of Consulting Arrangement and Resignation, Severance
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Agreement and General Release
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Dear Bill:
This letter confirms the acceptance of your consulting arrangement and
resignation from employment with Nexell of California, Inc., formerly known as
Nexell Therapeutics Inc., ("Nexell") effective July 14, 2000 ("Resignation
Date"). Effective your Resignation Date, you have resigned from all officer and
director positions you hold with Nexell, including your duties as President and
Chief Executive Office ("CEO") of Nexell. You have also resigned from all
officer positions held with Nexell's parent corporation, Nexell Therapeutics
Inc. (formerly known as VIMRx Pharmaceuticals Inc.) ("Nexell Parent"), including
your duties as President and Chief Operating Officer ("COO") of Nexell Parent,
but you have not resigned as a director of Nexell Parent. (For purposes of this
letter, Nexell, Nexell Parent and all their related, affiliated, parent or
subsidiary entites are collectively referred to as the "Nexell Entities.") You
have further resigned any other officer or director positions you hold with any
other Nexell Entities. Set forth below are the terms of your Severance Agreement
and General Release and Consulting Agreement ("Agreement") with the Nexell
Entities. You understand and agree that you have waived notice to any proceeding
before Nexell Parent's Board of Directors ("Board") to discuss the terms of
these agreements.
Consulting Agreement
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1. You agree to provide advisory and consulting services for the Nexell
Entities as requested by the CEO or COO of Nexell Parent for a period of
fourteen (14) months from your Resignation Date, until September 14, 2001
("Consulting Period"). You agree to make yourself available not less than two
days per week during the Consulting Period, unless prior to the end of the
Consulting Period, you are engaged as a full time employee for another entity.
You acknowledge that your consulting services are not intended to include
services you render as a director of Nexell Parent, and you will not be
compensated for services you render as a director of Nexell Parent.
2. You shall be compensated for consulting services at a daily rate of
$1,000.00 per day for each day of service (or any portion thereof) specifically
requested by the CEO or COO of Nexell Parent. The Nexell Entities shall use your
services as a consultant for a minimum of thirty (30) days during the Consulting
Period or, alternatively, pay you at the end of the Consulting Period the
difference between the amount of $30,000.00 and the amount actually received by
you for consulting services under this Consulting Agreement if that amount is
less than $30,000.00. You shall also be reimbursed for all reasonable
out-of-pocket expenses incurred by you in performing services under this
Consulting Agreement. Any consulting fees earned or reasonable expenses
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incurred by you shall be paid on a monthly basis in accordance with Nexell's
ordinary accounts payable practices after receipt of a statement from you.
Nexell shall have the right to audit and review the reasonableness of your
expense claims.
3. You agree that the intent of this Consulting Agreement is for you to
provide services to the Nexell Entities as an independent contractor. Nothing in
this Consulting Agreement shall be interpreted or construed as creating or
establishing the relationship of employee or employee between you (and your
employees or agents) and any of the Nexell Entities. You shall be solely and
entirely responsible for your acts and the acts of your employees, agents or
subcontractors. You retain the sole and exclusive right to control or direct the
manner or means by which the consulting services are to be performed, except
that your services shall be rendered in a timely and professional manner at such
places and during such hours as you and the CEO or COO of Nexell Parent may
determine consistent with the needs of the project as defined by the CEO or COO
of Nexell Parent. You will provide the supplies and equipment necessary to
perform the services requested. The Nexell Entities will provide you with
reasonable access to the information and facilities necessary to enable you to
perform services under this Consulting Agreement.
4. The Nexell Entities will not have an exclusive right to your services
during the Consulting Period, and you shall retain the right to perform services
for others during the Consulting Period, provided such services (a) are not
competitive with the Nexell Entities and (b) do not involve you in a conflict of
interest with respect to the consulting arrangements set forth in this
Consulting Agreement. The Nexell Entities are free to utilize the services of
others during the Consulting Period.
5. Because you are engaged as an independent contractor and not an
employee, you will not be eligible to participate in employee benefits, leaves
of absence or other programs that are now or may be provided by the Nexell
Entities to their employees, except as expressly stated in the Severance
Agreement below.
6. Because you are engaged as an independent contractor and not an
employee, no payment received by you pursuant to this Consulting Agreement shall
be subject to employment tax withholding, nor shall the Nexell Entities withhold
or pay federal social security tax (FICA), Medicare tax, or federal or state
income tax, or make contributions to the federal or state unemployment or
disability insurance funds on your behalf. You are responsible for filing all
income and other tax forms and paying all taxes due.
7. You acknowledge that you will not be covered by Nexell's worker's
compensation insurance should you be injured while performing services under
this Consulting Agreement, and you agree that you will maintain health insurance
for yourself during the term of the Consulting Agreement either by maintaining
your group health insurance in effect pursuant to paragraph 13 below or by
obtaining major medical health insurance coverage from some alternative source.
8. This Consulting Agreement is assignable by the Nexell Entities upon
written notice to you. However, since the services to be rendered by you are
personal in nature, this Consulting Agreement may not be assigned by you without
the written consent of the CEO or COO of Nexell Parent. You also may not use
your employees, agents or subcontractors to perform services under this
Consulting Agreement without the express, written consent of the CEO or COO of
Nexell Parent.
9. You acknowledge and agree that you have no authority to enter into
contracts or
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agreements on behalf of the Nexell Entities, or to represent the Nexell Entities
as an agent or in any other capacity without the express written consent of the
CEO or COO of Nexell Parent.
Severance Agreement and General Release
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10. You will continue to be paid your base salary through September 30,
2000 in accordance with Nexell's ordinary payroll practices. You will continue
to be eligible to participate in Nexell's group benefit plans and 401(k) plan in
accordance with plan terms and you will continue to accrue vacation through
September 30, 2000. You will also be paid for any accrued, but unused, vacation
through September 30, 2000.
11. Commencing on October 1, 2000 and ending on September 30, 2001, Nexell
shall pay you a severance payment equivalent to twelve months of your current
annual base salary of $21,091.20 per month for a total of $253,094.40, less
applicable state and federal withholdings and deductions. These payments shall
be made in semi-monthly installments in accordance with Nexell's ordinary
payroll practices. Except for the one-time bonus described in paragraph 12 below
and the compensation described in the Consulting Agreement above, you shall
receive no further compensation of any kind from the Nexell Entities. During
this twelve-month severance period, you shall not be eligible to receive the
annual cash bonus or to participate in any benefit plans offered employees of
the Nexell Entities unless expressly provided for in this letter. In particular,
you shall not accrue paid vacation, nor shall you be eligible to participate in
Nexell's 401(k) Plan.
12. You shall be paid a one-time bonus of $50,000.00, less applicable
withholdings. The bonus shall be paid at the time bonuses are regularly paid to
Nexell's officers, but in no event shall it be paid later than February 27,
2001. You understand and agree that, except as provided in this paragraph, you
will not be paid any other bonuses by the Nexell Entities, including the annual
cash bonus provided for in paragraph 2(d) of your Employment Agreement with
Nexell dated May 28, 1998 ("Employment Agreement").
13. As of September 30, 2000, your rights if any, regarding continuation
of group health insurance coverage will be governed by COBRA. Under separate
cover you will receive COBRA information, which will include the notice of your
rights to elect continuation coverage under COBRA for medical and dental
insurance. In this regard, you may elect, in accordance with a federal statute
(COBRA), to continue your medical and dental benefits for up to 18 months
following September 30, 2000. Through September 30, 2001, you and Nexell will
share the cost of medical and dental premiums. You must pay the full COBRA cost
for the remaining six months of the COBRA coverage period. Thus, for the period
July 19, 2000 through September 30, 2001, you will pay or have deducted on your
behalf the employee co-pay portion of such benefits, which is approximately
fifteen (15) percent of the premiums paid by Nexell for such benefits. In the
event Nexell changes or discontinues its medical and dental coverage prior to
September 30, 2001, you agree to accept such coverage as Nexell provides for its
officers.
14. In accordance with Nexell's relocation policy for executives of your
status, Nexell will pay or reimburse you for the reasonable expenses of
relocating your household to southeastern Pennsylvania. Should you choose to
return to southeastern Pennsylvania, your relocation must be completed and
expenses submitted by December 31, 2001 to be eligible for reimbursement. Such
relocation expenses will be similar in nature, amount and quality as were
previously reimbursed to you in making your move to California, with the
following exceptions: (a) Nexell will not pay any temporary living or storage
expenses you incur upon relocation to Pennsylvania; (b) Nexell will only pay
reasonable non-recurring closing costs; and (c) Nexell will
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only pay the cost of up to two round trip economy airline tickets for travel to
Pennsylvania by you and your wife. To the extent that any of the expenses paid
or reimbursed by Nexell pursuant to this paragraph constitute compensation
income to you that is subject to personal income taxation, Nexell will pay the
aggregate federal, state and local income taxes payable by you with respect to
the compensation income attributable to the payment or reimbursement of such
expenses by Nexell (including income taxes payable with respect to such
additional cash compensation).
15. Nexell and Nexell Parent hereby acknowledge that you now possess
fully vested options to purchase 183,750 shares of Nexell Parent's common stock,
at the option prices and for the exercise periods reflected on Exhibit A.
16. Nexell and Nexell Parent shall use commercially reasonable efforts to
list you as an additional insured on their Directors & Officers policies
presently in effect or in the future, provided that Nexell and Nexell Parent
shall not be obligated to do so in the event: (a) such listing imposes an
additional expense to Nexell and Nexell Parent (which you chose not to pay); (b)
the insurer will not permit such additional listing; or (c) such listing would
require Nexell and Nexell Parent to obtain a policy different than a policy that
it would elect to obtain covering all of its officers or directors.
17. In exchange for the payments and benefits to be received under the
Consulting Agreement, the sufficiency of which you hereby acknowledge, you, for
yourself, your heirs, successors, and assigns (collectively referred to as
"Releasors"), do irrevocably and unconditionally release, acquit, and forever
discharge the Nexell Entities, and each of their related or affiliated entities,
and each of their past and present officers, owners, directors, shareholders,
employees, agents, contractors, representatives, attorneys, predecessors,
successors and assigns (all of whom are collectively referred to as
"Releasees"), and all persons acting by, through, under or in concert with any
of them, or any of them, from any and all claims, charges, complaints, rights,
demands, actions, causes of action, whether known or unknown, which you may now
have, have ever had, or may in the future have, arising from or in any way
connected with any and all matters from the beginning of time to the date of
execution of this Agreement. You give up any and all causes of action of any and
every kind, including, without limitation, any claims for discrimination or
retaliation prohibited under the California Fair Employment and Housing Act
(California Government Code (S). 12900 et seq.), Title VII of the United States
Civil Rights Act of 1964, as amended (42 U. S. C. (S) 2000e et seq.), and the
Age Discrimination in Employment Act; wrongful termination in violation of
public policy, breach of the Employment Agreement or amendments thereto, breach
of the stock option agreements or amendments thereto, breach of contract,
whether oral or written, express or implied, breach of any implied covenant of
good faith and fair dealing, misrepresentation, negligent or intentional
infliction of emotional distress; any form of negligence; fraud; deceit; or
violation of any other federal, state, county, or municipal law, statute,
regulation, rule, ordinance, or common law doctrine (whether or not recited
herein), arising out of or related to your employment by or with any of the
Releasees.
18. To effect a full and complete release as described above, you, for
yourself and your heirs, successors, assigns, agents, and all persons or
entities associated with you, expressly waive and relinquish all rights and
benefits afforded you by section 1542 of the Civil Code of the State of
California, and do so understanding and acknowledging the significance and
consequence of such specific waiver of section 1542. Section 1542 of the Civil
Code of the State of California states 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".
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You agree that, you have read this Agreement, including the waiver of California
Civil Code section 1542, and have consulted counsel about the Agreement to the
extent you so desire and specifically about the waiver of section 1542, and that
you understand the Agreement and the section 1542 waiver, and so freely and
knowingly enter into this Agreement, and waive your rights under said section
1542.
19. During your employment with Nexell, you have had access to
confidential and proprietary information. Nexell maintains a proprietary
interest in all such confidential data. Accordingly, it is expected that you
will not use or disclose to any entity or person, either directly or indirectly,
this confidential information.
(a) For a period of six months from your Resignation Date, you
will not directly or indirectly own, manage, operate, join, control or become
employed by, or render any services of an advisory nature or otherwise, or
participate in the ownership, management, operation or control of, or otherwise
be connected in any manner with any business competitive with the business of
the Nexell Entities or any of its directly or indirectly, wholly or partially
owned subsidiaries without prior written consent of the CEO or COO of Nexell
Parent.
(b) You further hereby covenant and agree that you will not at any
time during, or (i) for a period of three (3) years following your Resignation
Date reveal, divulge or make known to any person or entity any secrets or
confidential information (whether oral, written, or electronically encoded)
whatsoever, of or concerning the Nexell Entities or any of its directly or
indirectly, wholly or partially owned subsidiaries or its business or anything
connected therewith, all of which is and shall remain the property of the Nexell
Entities and shall be returned by you to the Nexell Entities (including all
copies) immediately upon any termination of your employment (or earlier, if
requested by the Nexell Entities), or (ii) for a period of three (3) years
following your Resignation Date directly or indirectly entice away from the
employment of the Nexell Entities, retain or otherwise engage, any employee of
the Nexell Entities, or attempt to do any of the foregoing; provided, however,
nothing herein shall prevent you from interviewing and/or ultimately retaining
someone who has already left the employment of any Nexell entity as of your
Resignation Date, or who has left the employment of any Nexell entity for at
least three months prior to being retained or hired by you.
(c) For purposes hereof, confidential information shall not include
any information which: (i) is or becomes generally available to the public other
than as a result of a wrongful disclosure by you or your representatives; (ii)
was known by you on a non-confidential basis prior to its disclosure to you by
the Nexell Entities or their representatives; (iii) becomes available to you
from a source other than the Nexell Entities or its representatives, provided
that such source is not bound by a confidentiality agreement with the Nexell
Entities or their representatives and otherwise has a right to disclose the
same: or (iv) is required to be disclosed by any governmental or judicial
authority, provided, in such case, that you shall use your best efforts to
notify the Nexell Entities immediately of any such requirement so that the
Nexell Entities shall have an opportunity to contest it.
(d) In the event of any breach or threatened breach by you of any one
or more of the provisions of this paragraph 19, the Nexell Entities will be
entitled, in addition to any remedy hereunder or under any applicable law or in
equity, to an injunction restraining the breach of such provisions hereof.
20. You represent and agree that, except as set forth herein, you will
keep the existence, the terms, and amount of this Agreement completely
confidential. You may disclose the amount and
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terms of this Agreement to members of your immediate family, attorneys,
accountants, or as otherwise expressly required or compelled by law. You
understand and acknowledge that this paragraph constitutes an essential and
material part of this Agreement. Notwithstanding any other provision hereof;
this Agreement may be disclosed in any action brought to remedy a breach of this
Agreement. You further understand that the contents of this Agreement may be
disclosed by Nexell Parent and the Agreement itself filed with the Securities
and Exchange Commission in accordance with applicable securities laws.
21. You agree that you will not voluntarily assist any person in bringing
or pursuing legal action against the Nexell Entities, their agents, successors,
representatives, employees and related and/or affiliated companies, based on
events occurring prior to the date of this Agreement.
22. You further agree as a condition of receiving the benefits provided to
you under this Agreement: (a) not to disparage any of the Nexell Entities or
their employees or products; (b) not to engage in a series of actions which you
know or should know are contrary to the interest of any of the Nexell Entities;
(c) from today's date through September 30, 2001, to fully cooperate with the
Nexell Entities and their directors, officers, employees, attorneys and
representatives by providing assistance or information in your capacity as a
director of Nexell Parent or as requested from time to time by Nexell Parent's
CEO or COO, pursuant to the Consulting Agreement; and (d) to return to the
Nexell Entities, on or before your Resignation Date, all property of the Nexell
Entities, including proprietary information.
23. You shall continue to serve as a director on the Board of Nexell
Parent, except that you understand and agree that you will submit a letter of
resignation for this position if you are notified by a majority of the Board
that the Board deems it in the best interest of Nexell Parent for you to resign
your position. You are not obligated to stand for reelection and serve beyond
your current term on the Board.
24. You shall be entitled to outplacement services at Nexell's expense at
Right Management Consultants ("RMC") or a firm of your choice, but not to exceed
the additional out-of-pocket costs Nexell would have paid to RMC if you had
selected RMC for these services. Nexell has already paid or has committed to pay
an amount of approximately $25,000.00 to RMC for services which were to be
rendered for you. RMC has advised Nexell that it is willing to apply the
$25,000.00 amount against outplacement services for you. Nexell is willing to
contribute additional out-of-pocket costs of $5,000.00 to $10,000.00, depending
on the services you select. If you select an outplacement firm other than RMC,
Nexell shall pay to the alternative company an amount not to exceed $10,000.00
based upon the comparable outplacement services RMC would have provided you.
General Provisions
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25. By the actions and obligations set forth above, the Nexell Entities
admit no wrongdoing or liability. Further, this Agreement and Nexell's
acceptance of your resignation from employment do not in any way suggest any
violation of law by the Nexell Entities, but instead reflect a mutually agreed
upon transition for both you and the Nexell Entities.
26. You will have a period of twenty-one (21) days to review this
Agreement and the release of claims it contains. This Agreement will be
revocable for a period of seven (7) days from the date you sign it, provided
that you deliver written notice of revocation to me by the close of business on
the seventh (7th) day. If you revoke this Agreement, it will not be effective or
enforceable and Nexell will be under no obligation to provide the payments and
benefits referred to in this
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Agreement. If you do not revoke this Agreement as provided in this paragraph, it
shall be enforceable and irrevocable except by a written agreement signed by
both parties.
27. You agree and acknowledge that no promises have been made which are
not included in this Agreement and that, except as otherwise provided in this
Agreement, it supersedes all prior agreements between you and the Nexell
Entities and contains the entire understanding between you and the Nexell
Entities regarding the subject matter herein. You acknowledge that the terms of
this Agreement are contractually binding. If any portion of this Agreement is
declared invalid or unenforceable, the remaining portions of this Agreement will
continue in full force and effect. Any amendments to this Agreement must be in
writing and signed by all parties to this Agreement.
28. This Agreement is made and entered into in the State of California,
and shall in all respects be interpreted, enforced and governed under the laws
of said state.
Please read this letter carefully. By signing this letter, you give up any right
to sue the Nexell Entities or releasees for any reason, even reasons you do not
know about. If you agree to the terms outlined in this Agreement, then please
sign two copies and return one of them to me.
Sincerely,
Richard L. Dunning
Chairman of the Board and Chief Executive Officer
Nexell Therapeutics Inc.
ACCEPTED AND AGREED:
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L. William McIntosh
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Date
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