Exhibit 10.1
GENERAL RELEASE AND SEPARATION
AGREEMENT
This General Release and Separation
Agreement (hereafter “Agreement”) is entered into
between Bradford S. Goodwin (the “Executive”), and
Novacea, Inc. (the “Company”), effective eight days
after the date of the Executive’s signature (the
“Effective Date”), unless he revokes his acceptance as
provided in Paragraph 7(c), below.
WHEREAS, the Executive is the Chief
Executive Officer of the Company;
WHEREAS, the parties entered into an
Executive Severance Benefits Agreement dated April 13, 2006,
pursuant to which the Executive is entitled to payment of certain
benefits upon a termination of his employment by the Company other
than for Cause;
WHEREAS, the Company and Executive
both wish to terminate the Executive’s employment other than
for Cause, effective January 1, 2007;
WHEREAS, the Company and the
Executive now wish to document the termination of their employment
relationship and fully and finally to resolve all matters between
them;
THEREFORE, in exchange for the good
and valuable consideration set forth herein, the adequacy of which
is specifically acknowledged, the Executive and the Company hereby
agree as follows:
1. Separation of Employment .
The Executive resigned all positions that the Executive held as an
officer and member of the Board of Directors of the Company, and of
all subsidiaries of the Company, effective December 7, 2006.
The Executive’s employment shall terminate effective
January 1, 2007 (the “Separation
Date”).
2. Payment of Accrued Wages and
Expenses . On the Separation Date, the Executive shall be paid
an amount equal to accrued wages, including any remaining accrued,
unused Vacation, through the Separation Date, less applicable taxes
and other authorized withholding. The Company shall promptly
reimburse the Executive for all reasonable and properly documented
business expenses incurred through the Separation Date that are
submitted by him on or before January 1, 2007, in accordance
with the Company’s travel and expense policies. As of the
Separation Date, the Executive shall no longer have the right to
participate in any Company benefit plans, except as required by
law. The Executive shall be permitted to participate in the
Company’s 401(k) Plan in calendar year 2007, to the full
extent permitted by law.
3. Bonus for the Fiscal Years
Ending December 31, 2006 and December 31, 2007
.
(a) The Executive shall be paid a
bonus for the fiscal year ending December 31, 2006, in the
amount of fifty-six percent (56%) of the Executive’s FY
2006 bonus target. The bonus shall be paid in a lump sum no later
than thirty (30) days following the Separation Date, less
applicable taxes and other authorized withholding. In no event
shall the Executive have the ability to affect the timing of the
payment of compensation by acceleration, deferral, or otherwise
under this Section 3(a).
(b) For the fiscal year ending
December 31, 2007, the Executive shall be paid a bonus equal
to fifty percent (50%) of the Executive’s FY 2006 bonus
target. The bonus shall be paid in a single lump sum on a date
which is no earlier than six (6) months and two days following
the Separation Date, but no later than July 31, 2007, less
applicable taxes and other authorized withholding. The payment of
this bonus is intended to comply with the requirements of Internal
Revenue Code Sections 409A(a)(2(A)(i) and 409A(a)(2)(B)(i) and the
proposed or final Treasury regulations promulgated thereunder. In
no event shall the Executive have the ability to affect the timing
of the payment of compensation by acceleration, deferral, or
otherwise under this Section 3(b).
4. Stock Options .
(a) Executive has been granted the
options to purchase shares of the Company’s common stock
described in Exhibit A hereto (collectively, the
“Options”). As of the Separation Date, the Executive
shall be vested in that number of shares of the Company’s
common stock set forth next to each such Option (the “Vested
Options”), which includes an amount equal to vesting that
would have occurred over the twelve-month period following the
Separation Date, had the Executive remained continuously employed
by the Company during such period. Except as otherwise provided in
this Agreement, the Executive acknowledges and agrees that the
portion of each Option that is unvested as of the Separation Date
is forfeited and shall cease to be exercisable as of the Separation
Date. The Executive may exercise the Vested Options in accordance
with their original terms of grant as modified by this Paragraph
4.
(b) Consistent with the other terms
of the Plan(s) under which the options were issued, the Executive
shall be permitted, subject to subparagraph (d) below, to
exercise Vested Options on or before December 31,
2007.
(c ) In the event that the
Separation Date falls within the Change of Control Benefits Period,
as defined in the Executive Severance Benefits Agreement dated
April 13, 2006 (the “April 13 Agreement”), the
vesting and/or exercisability of each of Executive’s stock
awards shall be immediately accelerated 100%.
(d) Notwithstanding anything in the
Agreement to the contrary, within 29 days of the execution of this
Agreement, the Executive will inform the Company whether or not the
Executive elects to accept any of the benefits of an extended
exercisability period with respect to all or any portion of his
Incentive Stock Options. Any failure of the Executive to so notify
the Company shall be treated as an acceptance of such extended
exercisability period.
5. Severance . Beginning on
the date which is no earlier than six (6) months and two days
following the Separation Date, but no later than July 31,
2007, the Company shall:
(a) Pay to the Executive in a single
lump sum six (6) months of salary at the Executive’s
final base rate, less applicable taxes and other authorized
withholding; and
(b) Commencing on July 3, 2007,
pay to the Executive in accordance with the Company’s normal
payroll practices, six (6) months of salary at the
Executive’s final base rate, less applicable taxes and other
authorized withholding.
The payments of severance detailed
under this Section 5 are intended to comply with the
requirements of Internal Revenue Code Sections 409A(a)(2(A)(i) and
409A(a)(2)(B)(i) and the proposed or final Treasury regulations
promulgated thereunder.
6. COBRA . Executive’s
health care coverage shall continue until January 31, 2007.
Thereafter, the Executive shall be eligible to continue, at his own
cost, health care benefits in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”). The Executive shall receive detailed
instructions regarding his COBRA rights following the Separation
Date.
7. General Release of Claims by
the Executive .
(a) The Executive, on behalf of
himself and his executors, heirs, administrators, representatives
and assigns, hereby releases and forever discharges the Company and
all predecessors, successors and their respective parent
corporations, affiliates, related, and/or subsidiary entities, and
all of their past and present investors, directors, shareholders,
officers, general or limited partners, employees, attorneys, agents
and representatives, and employee benefit plans in which the
Executive is or has been a participant by virtue of his employment
with the Company (the “Company Releasees”), 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 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 (collectively, “Claims”),
which the Executive has or may have had against such entities based
on any events or circumstances arising or occurring on or prior to
the date hereof or on or prior to the Separation Date, arising
directly or indirectly out of, relating to, or in any other way
involving in any manner whatsoever the Executive’s employment
by the Company or the separation thereof, and any and all claims
arising under federal, state, or local laws relating to employment,
including without limitation claims of wrongful discharge, breach
of express or implied contract, fraud, misrepresentation,
defamation, or liability in tort, claims of any kind that may be
brought in any court or administrative agency, any claims arising
under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities
Act, the Older Workers Benefit Protection Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the
Family and Medical Leave Act, the California Fair Employment and
Housing Act, the California Family Rights Act, the California Labor
Code and similar state or local statutes, ordinances, and
regulations. Notwithstanding
