Exhibit
10.47
SEPARATION AND GENERAL
RELEASE AGREEMENT
THIS SEPARATION AND GENERAL RELEASE
AGREEMENT (this
“Agreement”) is made between J. Robert Horton
(“Horton”) and DOV Pharmaceutical, Inc.
(“DOV” or the “Company”).
WHEREAS , Horton commenced employment by DOV on July 29,
2002;
WHEREAS , Horton’s employment with DOV as senior
vice president and general counsel will terminate effective May 5,
2006;
WHEREAS , DOV has agreed to provide Horton with
separation payments and transition benefits subject to the terms
and conditions set forth in this Agreement.
NOW, THEREFORE , DOV and Horton hereby agree as
follows:
1.
Separation of
Employment . Horton and DOV hereby ratify and affirm that
Horton will retire and terminate from any and all positions he
holds with DOV effective as of May 5, 2006 (the “Separation
Date”). For option exercise purposes the termination is
classified as retirement pursuant to Horton’s Employment
Agreement with DOV.
2.
Separation
Payments . DOV will pay Horton on April 14, and 28, 2006,
his regular payroll check and on the next following payroll date,
May 12, 2006, his regular payroll check through May 5, 2006, plus
18 days of accrued, unused vacation through the
Separation Date. The Company will keep Horton on medical and
dental benefits until May 30, 2006, at which time he will then be
eligible for COBRA. Other than the foregoing, and subject to the
following sentence, Horton agrees that he has received all salary
and any other compensation or fringe benefits owed to him by DOV
through the Separation Date, and agrees that he has no further
claims against DOV for salary and any other compensation or fringe
benefits through the Separation Date. However, in consideration of
the promises made by Horton in this Agreement, including the
releases given by Horton to DOV in Paragraphs 3 through 6 of this
Agreement, the parties have agreed on the following
post-termination benefits:
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DOV shall pay
Horton at regular payroll intervals his basic compensation as of
the Separation Date (based on his final basic compensation rate of
$28,333.33 per month) for 15 months through August 5, 2007 (such 15
month period referred to herein as the “Severance
Period”), provided that if the parties agree that Horton is a
“specified employee” within the meaning of Section 409A
of the Code, such payments will not commence for six
months after the Separation Date and DOV instead shall pay
Horton on November 6, 2006, a lump sum payment equal to six
months’ basic compensation plus, to the extent deferred
pursuant to subparagraph (b), a lump sum payment equal to the cost
to maintain and/or continue (as applicable) for such six-month
period the medical, life, dental and disability insurance benefits
which are provided pursuant to subparagraph (b) below;
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DOV shall (i)
pay on Horton’s behalf (or if more administratively
practicable, reimburse Horton for) all premiums associated with the
continuation of medical and dental insurance coverage for the
duration of the Severance Period for Horton and his eligible
dependants pursuant to COBRA (subject to Horton’s proper
election of and eligibility for such continuation coverage under
COBRA); and (ii) provide Horton with continuation for the duration
of the Severance Period of the life and disability insurance
coverage Horton was receiving from DOV immediately prior to the
Separation Date at no cost to Horton (or, to the extent such
continued coverage is not permitted under the applicable policies
or law, shall pay premiums on Horton’s behalf not to exceed
in the case of disability the premium payment rate that was paid by
the Company prior to the Separation Date (or, if more
administratively practicable, reimburse Horton for all such
premiums) associated with obtaining and providing Horton with
reasonably comparable life and disability insurance coverage for
the duration of the Severance Period); provided that, if the
parties agree that it is necessary to avoid a penalty tax under
Section 409A of the Code, Horton shall pay the entire cost
of such benefits for the first six months, and DOV shall pay
Horton a lump sum payment of such costs in accordance with the
procedure set forth in subparagraph (a);
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effective as of
the Separation Date, the vesting of all stock options to acquire
DOV stock held by Horton that are unvested shall accelerate
and thereupon vest. It is the parties’ intention that such
options remain exercisable for the longest period permissible
without causing Horton to incur a penalty tax under Section 409A.
Under current Internal Revenue Service proposed regulations, such
options may, and shall be exercisable up to and including
December 31, 2007, provided that, if Horton determines upon tax
advice that an extension of time to exercise to a date not
later than August 5, 2010, is permissible without incurring a
penalty tax under Section 409A, such options shall be extended, to
and including such later date given by notice to DOV;
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commencing May
8, 2006, Horton shall be available upon reasonable notice to
perform consulting services (as an independent contractor) of up to
half-time during business days in May and June 2006 (the
“Consulting Period”) for which DOV shall pay Horton
$200 per hour plus reasonable out-of-pocket expenses;
and
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if a
replacement general counsel has not started employment with DOV
during the above Consulting Period sufficient to permit a suitable
transition orientation, and starts employment on or prior to
November 4, 2006, Horton shall provide reasonable consulting
services for such purpose at no charge.
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The foregoing
severance payments shall be made net of standard withholdings and
authorized deductions, except that with respect to any consulting
services performed during the Consulting Period, Horton shall be an
independent contractor and nothing herein, explicitly or
implicitly, shall be deemed or construed to create a joint venture,
partnership, agency or employee/employer relationship between
Horton and DOV with respect to the Consulting Period for any
purpose, including but not limited to taxes or employee benefits.
Horton thus understands that he will be solely responsible for
paying all federal, state and local taxes (including income tax,
FICA, FUTA and other taxes that may be due) as a result of any
consulting fees he receives pursuant to this Agreement; and that he
will not accrue any benefits under, or be covered by, any employee
benefit plans of DOV (except for any continuation coverage as
otherwise provided in subparagraph (b) above). The severance,
insurance and other payments and benefits provided by DOV hereunder
pursuant to subparagraphs (a)-(e) are subject to Horton’s
signing and delivering this agreement to DOV. In the event of
Horton’s death prior to full performance by DOV of its
obligation hereunder, severance and insurance payments if any yet
to be paid, and DOV options if any not yet exercised, shall be paid
to, or exercised by, his wife Anne Horton or if she dies to his or
her legal representative or legatee. Horton acknowledges that the
payments and benefits to be provided pursuant to subparagraphs
(a)-(e) are payments and benefits to which he would not otherwise
be entitled absent his agreement to and compliance with the terms
and conditions of this Agreement.
3.
General Release by
Horton . In consideration of the representations and
covenants undertaken by DOV, including the payments and benefits
described in Paragraph 2 of this Agreement, Horton releases,
discharges and promises not to sue DOV and its parent, if any,
subsidiaries, affiliates and related companies, and any of and all
its current or former directors, officers, members, employees,
attorneys, representatives, insurers, agents, successors, and
assigns (individually and collectively the “DOV
Releasees”), from and with respect to any and all claims,
actions, suits, liabilities, debts, controversies, contracts,
agreements, obligations, damages, judgments, causes of action, and
contingencies whatsoever (except claims, etc., that arise hereunder
relating to the enforcement hereof), including attorneys’
fees and costs, in law or in equity, known or unknown, suspected or
unsuspected, asserted or unassert
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