Exhibit 10.1
SEVERANCE AGREEMENT AND
RELEASE
This Severance Agreement And Release
(“Agreement”) is entered into as of this 7th day of
February, 2006, hereinafter “Execution Date,” by and
between GAIL T. VITULLI (“Employee”), and SCOLR Pharma,
Inc., its affiliates, successors and assigns (the
“Company”). Employee and the Company are sometimes
collectively referred to as the “Parties.”
1. Employee’s employment with
the Company terminated effective December 15, 2005
(“Termination Date”). The Parties have agreed to avoid
and resolve any alleged existing or potential disagreements between
them arising out of or connected with Employee’s employment
with the Company. The Company expressly disclaims any wrongdoing or
any liability to Employee. This Agreement and compliance with it
shall not be construed as an admission by the Company of any
liability or violation to the rights of Employee or any other
person or as a violation of any order, law, statute duty or
contract whatsoever as to Employee or any person.
2. The Company agrees to continue to
pay Employee’s current salary and benefits through
December 31, 2005 and provide Employee the following severance
benefits after the expiration of the seven (7) day revocation
period described in Paragraph 9 below (“Effective
Date”), provided Employee has not revoked this Agreement as
described in that Paragraph:
(a) A payment of Sixty Thousand
Dollars ($60,000.00), less standard employee withholding taxes and
any amounts owed by Employee to the Company, in accordance with the
Company’s regular payroll practices. Employee agrees that
said payments will be mailed to her attorney in a lump sum within
10 business days after the Effective Date;
(b) A lump sum payment of 50% of the
Employee’s projected 2005 Bonus in the gross amount of Twenty
Thousand Four Hundred Twenty-Three Dollars and Ten Cents
($20,423.10). Employee agrees that said payments will be mailed to
her attorney in a lump sum within 10 business days after the
Effective Date;
(c) The Company will maintain
Employee’s existing medical coverage, which includes payment
of 50% the premium for her spouse, for a maximum of four
(4) months or until such time as Employee subsequently becomes
covered by another group health plan, whichever is earlier.
Employee’s half of the spousal coverage for four months
($1074.88) will be deducted from the payment described in 2(a)
above. Employee agrees to notify the Company immediately if she
becomes covered by another group health plan; and
(d) The Company will provide
Employee with up to six (6) months of management and career
services from David Nelson and Associates at a cost not to exceed
$7,500.
(e) Employee will have until
December 31, 2006 to exercise stock options that are vested as
of the Termination Date under the Company’s stock option
plan.
Employee specifically acknowledges
and agrees that this consideration exceeds the amount she would
otherwise be entitled to receive upon termination of her
employment, and that this lump sum payment and other benefits are
in exchange for entering into this Agreement. Employee agrees that
she will not at any time seek consideration from the Company other
than what is set forth in this Agreement. Employee specifically
acknowledges and agrees that the Company has made no
representations to her regarding the tax consequences of any
amounts received by her or for her benefit pursuant to this
Agreement.
3. Employee warrants that she has
not filed, and will not file, any complaints, lawsuits,
administrative complaints or charges arising from or relating to
her recruitment by, employment with, or termination from, the
Company. Employee agrees to release the Company, its Board of
Directors, officers, employees, agents and assigns, from any and
all claims, charges, complaints, causes of action or demands of
whatever kind or nature that Employee now has or has ever had
against the Company, whether known or unknown, arising from or
relating to Employee’s recruitment by, employment with or
discharge from the Company, including but not limited to: wrongful
or tortious termination, specifically including actual or
constructive termination in violation of public policy; implied or
express employment contracts and/or estoppel; discrimination and/or
retaliation under any federal, state or local statute or
regulation, specifically including any claims Employee may have
under the Fair Labor Standards Act, Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, Title VII of the Civil Rights Act
of 1964 as amended, and the Family and Medical Leave Act; the
Washington Minimum Wage Act and the Washington Law Against
Discrimination, any claims brought under
