|
Exhibit
10.6
SEPARATION AGREEMENT AND RELEASE
This
Separation Agreement and Release (this
“Agreement”), dated as of September 19, 2007, is
made and entered into by and between William J. Fox and
Nephros, Inc.
DEFINITIONS
As
used throughout this Agreement:
1. “Employee”
refers to William J. Fox, his heirs, executors,
administrators, agents, successors, assigns, and
dependents.
2. “Company”
refers to Nephros, Inc., together with its past, present and
future parents, subsidiaries, and affiliates, and each of
their respective past and present officers, directors, agents,
employees, representatives, successors, and assigns, in both
their individual and corporate capacities.
RECITALS
WHEREAS,
Employee has been employed by Company pursuant to an
Employment Agreement made as of July 1, 2006 (the
“Employment Agreement”); and
WHEREAS,
the parties have mutually agreed that Employee’s
employment with Company will terminate; and
WHEREAS,
the parties have agreed to terminate the Employment Agreement
on mutually agreed upon terms set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be and
being legally bound hereby, the parties agree as
follows:
AGREEMENT
1.
As
of the Termination Date (defined below), the Employment Agreement
and all existing employment agreements between Employee and
Company, whether oral or written, are hereby terminated, and
neither Employee nor Company shall have any further rights or
obligations under any such agreements, except as otherwise
expressly provided herein. Except as otherwise expressly
provided herein, the parties agree that this Agreement supersedes
the Employment Agreement (and any other existing employment
agreements between the parties).
2.
Employee’s
employment with Company shall terminate effective as of September
19, 2007 (the “Termination Date”). Employee
agrees that he shall execute such documents and take such action
(if any) as may be necessary to remove Employee from all such
positions he holds with Company. Employee represents
that he does not have any claim, action, or proceeding pending
against Company.
3.
In
full and complete consideration for Employee’s promises,
covenants, and agreements set forth herein:
a.
Company
will tender to Employee, and Employee will accept, an aggregate of
$142,500, paid in equal installments in accordance with the
Company’s standard payroll practices for a period of six
months after the Termination Date. Such payment shall be
by wire transfer through the Company’s payroll system to the
Employee’s account shown therein. Upon at least 10
days prior written notice, the Employee may elect a different
account for the wire transfer. The wire transfer shall
be subject to all customary and legally required withholdings and
deductions.
b.
Company
will, no later than the next payroll cycle after the Termination
Date, pay to Employee through the Company’s payroll system
any accrued but unpaid Base Salary (as defined in the Employment
Agreement) for services rendered through the Termination
Date.
c.
Employee
currently holds vested stock options to purchase 250,333 shares of
the Company’s common stock (the “Vested
Options”). On the Termination Date, unvested stock
options held by Employee to purchase 56,250 shares of the
Company’s common stock will vest and become fully exercisable
on the Termination Date (the “Accelerated Options” and
together with the Vested Options, the
“Options”). Employee shall have the right to
exercise the Options within the period commencing on the
Termination Date and ending ninety days after the Termination Date
(the “Options Exercise Period”). Any Options
not exercised by Employee within the Options Exercise Period shall
be cancelled. In all other respects, all such Options
shall be governed by the plans, programs, agreements, and other
documents pursuant to which such Options were
granted. Any unvested stock options held by Employee to
purchase shares of the Company’s common stock, other than the
Accelerated Options, shall be forfeited on the Termination
Date.
d.
For
a period of six months after the Termination Date, Employee shall
continue to participate in all employee benefit plans, programs,
and arrangements providing health, medical, disability and life
insurance benefits in which Employee was participating immediately
prior to termination, the terms of which allow Employee’s
continued participation, as if Employee had continued in employment
with Company during such period. Alternatively, if such
plans, programs, or arrangements do not allow Employee’s
continued participation, for the six month period following the
Termination Date, if Employee timely elects COBRA continuation
coverage or similar continuation coverage provided for under New
York law, Company will pay the monthly premiums of such coverage
for the level and types of coverage Employee maintained on the
Termination Date. In any case, at the end of the six
month period and with no further obligation of the Company,
Employee may pursue alternative continuation coverage at his own
expense. The Company will provide Employee with any
notification as required by law with respect to such alternative
continuation coverage and reasonable assistance in completing any
documents relating to such alternative continuing coverage. The
Company will no longer make COBRA payments for Employee’s
elder daughter.
e.
Reasonable
business expenses and disbursements incurred by Employee in
connection with the performance of his duties prior to the
Termination Date will be reimbursed upon submission by Employee of
all appropriate documentation in accordance with Company’s
standard procedures, provided that any such documentation is
submitted by Employee within ten business days of the Termination
Date.
f.
Company
will pay Employee $5,000 by check as reimbursement for his advance
on the premium for his directors and officers liability insurance
simultaneous with the First Closing (as defined in the several
subscription agreements between the Company and each subscriber a
party thereto) of (i) the offering by the Company of up to fifteen
million dollars ($15,000,000) aggregate principal amount of Series
A 10% Secured Convertible Notes due 2008 convertible into (A)
shares of the Company’s common stock, par value $0.001 per
share (“Common Stock”) and (B) Class D Warrants for
purchase of shares of Common Stock; and (ii) an exchange of its 6%
Secured Convertible Notes due 2012 with the holders thereof, for
new Series B 10% Secured Convertible Notes due 2008 in an aggregate
principal amount of $5,300,000 convertible into shares of Common
Stock.
g.
Employee
shall not be required to mitigate damages or the amount of any
payment provided to him under this Section 3 by seeking other
employment or otherwise, nor shall the amount of any payments
provided to Employee under this Section 3 be reduced by any
compensation earned by Employee as the result of employment by
another employer after the termination of Employee’s
employment or otherwise, so long as such compensation is earned in
accordance with this Agreement.
h.
Except
as expressly provided in this Paragraph 3, Employee shall not be
entitled to any money or benefits from Company.
4.
Except
as necessary to enforce the terms of this Agreement, and in
exchange for and in consideration of the promises, covenants, and
agreements set forth herein, Employee hereby agrees, for Employee,
Employee’s heirs beneficiaries, devisees, executors,
administrators, attorneys, personal representatives, successors and
assigns, forever to release, discharge, and covenant not to sue
Company and any of Company’s past and present directors,
officers, employees, agents and attorneys, and agents and
representatives of such entities, and employee benefit plans in
which Employee is or has been a participant by virtue of his
employment with Company (except to the extent that Employee
continues to be entitled to benefits under such employee benefit
plans pursuant to this Agreement or the terms of such employee
benefit plans), to the maximum extent permitted by law, from any
and all claims, debts, demands, accounts, judgments, rights, causes
of action, equitable relief, damages, costs, charges, complaints,
obligations, promises, agreements, controversies, suits, expenses,
compensation, responsibility and or liability of every kind and
character whatsoever (including attorneys fees and costs), whether
in law or equity, known or unknown, asserted or unasserted,
suspected or unsuspected, which he has or may have had against such
entities based on any events or circumstances arising or occurring
on or prior to the execution of this Agreement, arising directly or
ind
|
