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Exhibit 10-Ap
SEVERANCE AGREEMENT AND RELEASE
PART I
PARTIES, PURPOSE, ATTORNEY CONSULTATION
1.1 PARTIES. The
parties to this severance agreement and release
("Severance Agreement") are Lawrence A. Gyenes ("Mr. Gyenes") and
Zila, Inc.
("Zila").(1)
1.2
PURPOSE. Mr. Gyenes was employed by Zila until July 31, 2007
(the
"Separation Date"). At the outset of the parties' employment
relationship, they
entered into an agreement memorialized by an offer letter from Zila
to Mr.
Gyenes dated March 6, 2007 and executed by Mr. Gyenes on March 7,
2007 (the
"Offer Letter"), a true and correct copy of which is attached
hereto as EXHIBIT
A. The purpose of this Severance Agreement is to set forth certain
terms that
will govern the termination of the employment relationship between
Mr. Gyenes
and Zila and to settle fully and finally all claims of any kind Mr.
Gyenes might
have against Zila arising out of his employment with Zila, the
Offer Letter
and/or any other act, omission or matter occurring before execution
of this
Severance Agreement, including all claims of any kind which Zila
might have
against Mr. Gyenes arising out of his employment with Zila and
occurring before
the execution of this Severance Agreement.
1.3
CONSULT WITH ATTORNEY. Zila hereby advises Mr. Gyenes to consult
with
an attorney before signing this Severance Agreement.
PART II
RESIGNATION, OFFER LETTER TERMINATION, LEAVES OF ABSENCE,
COMPENSATION, SEVERANCE BENEFITS
2.1
RESIGNATION. Mr. Gyenes hereby resigns, and Zila hereby accepts
his
resignation, effective July 31,2007.
2.2 OFFER
LETTER TERMINATION. The Offer Letter is hereby terminated in
its
entirety and shall have no further force or effect. Following
execution of this
Severance Agreement, neither Mr. Gyenes nor Zila shall have any
obligation to
the other arising out of the Offer Letter.
2.3 LEAVES
OF ABSENCE. Mr. Gyenes acknowledges that he received all leaves
of absence to which he was entitled during his employment with
Zila.
2.4
COMPENSATION. Mr. Gyenes acknowledges that he timely received
all
compensation of any kind, whether in the form of base salary,
automobile
allowance, performance bonus, stock grants, stock options, paid
time off,
relocation benefits or other compensation (collectively,
"Compensation") he had
earned or was owed as of the Separation Date, acknowledges that
Zila presently
owes him no Compensation, and acknowledges that the only
Compensation Zila will
owe him in the future is set forth in Section 2.5.1 below.
2.5
SEVERANCE BENEFITS. Mr. Gyenes will receive severance benefits
in
accordance with, and subject to, the following:
__________
(1)
As used herein, "Zila" is intended to include Zila, Inc. and each
of its
current
parent, subsidiary and affiliated companies and entities.
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2.5.1 In return for the promises Mr. Gyenes makes in this
Severance
Agreement, Zila will (i) provide Mr. Gyenes with severance pay in
the amount of
one hundred fifty thousand dollars ($150,000.00), less applicable
withholdings,
payable over a period of six months according to Zila's regular
payroll schedule
at the rate Zila paid Mr. Gyenes his base salary prior to the
Separation Date
and beginning on the first regular Zila payroll date that falls ten
or more
business days after Mr. Gyenes' execution of this Severance
Agreement; (ii) pay
Mr. Gyenes' COBRA premiums for a period of twelve months beginning
with August
2007 and continuing through the end of July 2008; (iii) pay all
reasonable costs
associated with transporting Mr. Gyenes' personal property and
himself from
Arizona to New Jersey; and (iv) reimburse Mr. Gyenes for all
relocation benefits
properly submitted to Zila by Mr. Gyenes in accordance with
Paragraph 15 of the
Offer Letter (collectively, the "Severance Benefits").
2.5.2 Zila agrees that all restrictions on Restricted Stock
Grant
#771 are lifted and a stock certificate for 50,000 shares, less the
number of
shares required for applicable withholdings, will be issued to Mr.
Gyenes ten
business days after Mr. Gyenes' execution of this Severance
Agreement.
2.5.2 Mr. Gyenes' right to receive the Severance Benefits shall
immediately terminate if he breaches, and fails to cure within ten
(10) days of
receipt of written notice describing such alleged breach, any
contractual
obligation he owes Zila or violates any other promise or commitment
he has made
to Zila or duty he owes to Zila,
PART III
REAFFIRMATION REGARDING CONFIDENTIALITY, NON-DISPARAGEMENT,
SUBPOENA, NON-DISCLOSURE, COOPERATION
3.1
REAFFIRMATION REGARDING CONFIDENTIALITY: IN connection with his
Zila
employment, Mr. Gyenes executed an Employee Confidentiality and
Intellectual
Property Agreement (the "Confidentiality Agreement"), a true and
correct copy of
which is attached hereto as EXHIBIT B. Mr. Gyenes hereby represents
that to his
knowledge he has been in complete compliance with the
Confidentiality Agreement
from the date of its execution through the date of execution of
this Severance
Agreement. For example (but not by way of limitation), Mr. Gyenes
represents
that he has delivered to Zila all Zila property that was within his
possession
or control and that he has kept no originals or copies of any
documents,
materials or media (whether in paper, electronic or other form)
embodying or
reflecting "Confidential Information" (as that term is defined in
the
Confidentiality Agreement). Mr. Gyenes hereby reaffirms all future
obligations
he may have under the Confidentiality Agreement including, without
limitation,
his obligation under Section 2 to refrain from using or disclosing
any
"Confidential Information" (as that term is defined in the
Confidentiality
Agreement) to any person or entity.
3.2
NON-DISPARAGEMENT. Mr. Gyenes agrees that from the date of
execution
of this Severance Agreement forward he will not, directly or
indirectly, make
any disparaging statements to any third party about Zila. Nothing
in this
provision shall be construed to require Mr. Gyenes to testify
dishonestly if he
is compelled by operation of law to provide sworn testimony about
Zila, to
refrain from participating or cooperating in a governmental
investigation, to
refrain from seeking to enforce the terms of this Severance
Agreement, or to
refrain from fairly and lawfully competing against Zila should one
day he choose
to do so.
3.3
SUBPOENA OR OTHER LEGAL ORDER. If Mr. Gyenes receives a subpoena
or
other legal order requiring him to provide information or testimony
(or is
otherwise required to provide information or testimony) that he
reasonably
anticipates will involve Zila, he shall provide Zila with a copy of
the subpoena
or other legal order (or, in the absence of such a subpoena or
other legal
order, other written
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notice of the event) at least thirty (30) days (or as many days as
is
practicable) prior to the date on which Mr. Gyenes anticipates
being required to
provide information or testimony.
3.4
NON-DISCLOSURE. Mr. Gyenes agrees that he will not, except as may
be
required by law, disclose the terms of this Severance Agreement to
anyone other
than his fiance/spouse, attorneys or financial advisors (so long as
such
individuals agree to hold confidential the terms of this Severance
Agreement).
3.5
COOPERATION. Mr. Gyenes shall make himself available in the future
to
consult with Zila with regard to any potential or actual dispute
Zila may have
with any third party concerning matters about which Mr. Gyenes has
personal
knowledge, and to testify about any such matters should such
testimony be
requested, so long as doing so does not unreasonably interfere with
his
then-current professional activities. To the extent Mr. Gyenes has
out-of-pocket
expenses in connection with such cooperation, including reasonable
attorneys
fees, Zila agrees to reimburse such expenses upon Mr. Gyenes'
submission of
documentation requested by Zila.
PART IV
RELEASE, NO
ASSIGNMENT OR PENDING ACTION, WAIVER OF RECOVERY, CONSIDERATION
4.1
RELEASE. Subject to the terms and conditions of this Severance
Agreement, Mr. Gyenes hereby provides the following complete and
unconditional
release from legal liability:
4.1.1 Mr. Gyenes releases the following entities and persons:
(i)
Zila and each of its current and past parent, subsidiary and
affiliated
companies and entities; and (ii) all current and past owners,
officers,
directors, agents and employees of each such company and entity
(together, the
"Released Parties").
4.1.2 Except for claims (a) alleging breach of this Severance
Agreement, and (b) for indemnification under Zila's Certificate
of
Incorporation, other corporate documents or applicable directors
and officers
liability insurance in respect of third party claims, Mr. Gyenes
releases the
Released Parties from all claims, liabilities, costs and expenses,
damages,
actions and causes of action of whatever kind or nature, whether
known or
unknown, arising out of acts, omissions or matters occurring before
execution of
this Severance Agreement. Mr. Gyenes and Zila intend this release
to be as broad
as legally permissible and to cover, without limitation, all claims
relating to
or arising out of Mr. Gyenes' employment with Zila, the termination
of that
employment, the Offer Letter, and any compensation allegedly owed
Mr. Gyenes by
Zila, as well as all other contract and tort claims that might
exist under
applicable law, claims relating to attorneys' fees Mr. Gyenes might
have
incurred, and claims arising out of federal, state and local
employment-related
statutes, including the following: (i) the Arizona Civil Rights
Act; (ii) the
Arizona Employment Protection Act; (iii) Title VII of the Civil
Rights Act of
1964; (iv) the Civil Rights Acts of 1866, 1871 and 1991; (v) the
Age
Discrimination in Employment Act; (vi) the Americans with
Disabilities Act;
(vii) the Equal Pay Act; (viii) the National Labor Relations Act;
(ix) the
Family and Medical Leave Act; and (x) the Employee Retirement
Income Security
Act.
4.1.3 Nothing in this Severance Agreement shall affect any
vested
rights Mr. Gyenes may have in any defined benefit plan maintained
by Zila.
4.2 NO
ASSIGNMENT OF CLAIMS OR PENDING ACTION. Mr. Gyenes hereby
represents that as of the date of execution of this Severance
Agreement, he has
made no assignment to any third party of any legal claims against
any of the
Released Parties, and that he has not filed any legal action,
charge or suit
against any of the Released Parties with any court, administrative
agency or
legal body of any sort.
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4.3 WAIVER
OF RECOVERY. Mr. Gyenes hereby waives any right to remedy or
recovery as a result of any administrative proceeding or other
legal action
related to his employment with Zila that has been or may in the
future be filed
on his behalf by any third party.
4.4
CONSIDERATION. Pursuant to this Severance Agreement, Mr. Gyenes
is
making certain commitments to Zila and related entities and
persons. Mr. Gyenes
acknowledges that he is receiving good and valuable consideration
for the
commitments he is making pursuant to this Severance Agreement, that
such
consideration is over and above what he is owed in the absence of
this Severance
Agreement, and that he would not receive the consideration he is
receiving
pursuant to this Severance Agreement if he did not agree to all of
the
provisions of this Severance Agreement.
4.5
GENERAL RELEASE BY ZILA. Zila unconditionally and forever
releases,
discharges and holds harmless, and agrees to indemnify, Mr. Gyenes
of and from
any and all actions, causes of action, suits, debts, accounts,
liabilities,
covenants, contracts, disputes, agreements, promises, claims and
demands, of any
kind or nature whatsoever, fixed or contingent, whether at law or
in equity,
which Zila had, now has or may have against Mr. Gyenes, whether or
not currently
known, arising from or relating to Mr. Gyenes' employment with
Zila, or any
event, dispute or occurrence which arose on or prior to the date of
this
Severance Agreement; provided, however, that nothing in this
Severance Agreement
shall be deemed to release Mr. Gyenes from the obligations of this
severance
Agreement and all the promises contained in this Severance
Agreement. Zila
specifically waives the benefits of any statutory or common law of
any state,
which in effect provides that a general release does not extend to
claims which
the releaser does not know or suspect to exist in his favor. It is
expressly
understood and agreed that the releases contained in this Section
4.5 are
intended to cover and do cover all known facts and/or claims, as
well as any
further facts and/or claims within the scope of such released
claims not known
or anticipated, but which may later develop or be discovered,
including all the
effects and consequences thereof. Zila acknowledges that it may
hereafter
discover facts in addition to, or different from, those which it
now believes to
be true with respect to the subject matter of the claims released
herein, but
agrees that it has taken that possibility into account in reaching
this
Severance Agreement, and that the releases given herein shall be
and remain in
effect notwithstanding the discovery or existence of any such
additional or
different facts, as to which Zila expressly assumes the risk.
PART V
GENERAL PROVISIONS
5.1
KNOWING AND VOLUNTARY AGREEMENT. Each party enters into this
Severance
Agreement of his or its own free will and has not been pressured or
coerced in
any way whatever into signing this Severance Agreement. In
addition:
5.1.1 Mr. Gyenes has been advised, in writing, to consult with
an
attorney prior to executing this Severance Agreement.
5.1.2 Mr. Gyenes understands that he is waiving all rights and
claims against the Released Parties that he may have under the
Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq.
("ADEA"), as
well as all rights and claims as more fully described in Section
4.1.
5.1.3 By executing this Severance Agreement, Mr. Gyenes
understands
that he is not waiving rights or claims that may arise out of acts,
omissions or
matters occurring after execution of this Severance Agreement.
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5.1.4 Mr. Gyenes acknowledges that he has been given the
opportunity
to consider this Severance Agreement for twenty-one (21) calendar
days, and that
he may take, and has taken, as much of that time as he wants in
order to
consider this Severance Agreement before signing it.
5.1.5 Mr. Gyenes understands that he has seven (7) calendar
days
following his execution of this Severance Agreement to revoke this
Severance
Agreement and that this Severance Agreement shall not become
effective until the
conclusion of that seven (7)-day period. To revoke this Severance
Agreement
during that seven (7)-day period, Mr. Gyenes must provide a written
revocation
notice to Gary Klinefelter, Vice President and General Counsel,
Zila, Inc., 5227
North Seventh Street, Phoenix, AZ 85014 (fax number 602.280.1216;
e-mail
gklinefelter@zila.com). If Mr. Gyenes revokes this Severance
Agreement, none of
its provisions shall be effective or enforceable.
5.2
SUBSEQUENT LITIGATION COSTS. In the event of any legal
proceeding
arising out of or related to this Severance Agreement, litigation
costs shall be
paid as follows:
5.2.1 Although Mr. Gyenes waives his rights to bring legal
claims
against Zila, including claims under the ADEA, Mr. Gyenes retains
his right (as
provided by applicable law) to challenge the validity of his waiver
of ADEA
claims under this Severance Agreement. If Mr. Gyenes chooses to
challenge the
validity of the ADEA release provided by this Severance Agreement,
the
litigation costs, including attorneys' fees, of the parties related
to that
challenge will be paid as provided by applicable law and/or as
ordered by the
court hearing the challenge.
5.2.2 In the event of any other kind of legal proceeding arising
out
of or related to this Severance Agreement, the prevailing party
shall recover
his or its litigation costs (including, without limitation,
reasonable
attorneys' fees, expert witness fees and both taxable and
non-taxable costs)
incurred in connection with the dispute underlying such legal
proceeding.
5.3
SEVERABILITY. In the event that any provision or part of any
provision
of this Severance Agreement should be held to be invalid or for any
reason
unenforceable, the remaining portions of this Severance Agreement
shall remain
in full force and effect unless, as a result of such
unenforceability, the
fundamental purpose of this Severance Agreement is thwarted.
5.4
ASSIGNMENT TO THIRD PARTIES. Neither this Severance Agreement nor
any
of the rights or obligations arising hereunder may be assigned by
any party to
this Severance Agreement to any third party without the prior
written consent of
the non-assigning party except that Zila may, without such consent,
assign all
such rights and obligations to an affiliate of Zila or to a
successor in
interest to Zila, which party shall assume all obligations and
liabilities
hereunder.
5.5
MODIFICATION / WAIVER. No modification, amendment or waiver of any
of
the provisions contained in this Severance Agreement shall be
binding upon any
party hereto unless made in writing and signed by such party or by
a duly
authorized officer or agent of such party.
5.6
GOVERNING LAW / VENUE AND JURISDICTION. This Severance Agreement
shall
be governed by the laws and judicial decisions of the State of
Arizona. Any
legal action arising out of or related to this Severance Agreement
shall be
instituted in the state or federal courts within the State of
Arizona, and both
Mr. Gyenes and Zila specifically consent to venue and personal
jurisdiction in
such courts.
5.7
HEADINGS. Headings used in this Severance Agreement, as designated
by
bold typeface, are for convenience only and shall not be used to
interpret or
construe the Severance Agreement's provisions.
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5.8 NO
EFFECT ON OTHER OBLIGATIONS. This Severance Agreement does not
eliminate or change any post-employment obligations Mr. Gyenes may
have to Zila
that are unrelated to the subject matter of this Severance
Agreement.
5.9
INTEGRATION. Except as specifically noted in Section 3.1 above,
this
Severance Agreement constitutes a single, integrated written
contract expressing
the entire agreement of the parties concerning the subject matter
of this
Severance Agreement. With the exception noted in the preceding
sentence, no
other agreements or understandings of any kind concerning the
subject matter of
this Severance Agreement, whether express or implied in law or
fact, have been
made by the parties to this Severance Agreement.
5.10
SIGNATURES AND EFFECTIVE DATE. The parties hereto have executed
this
Severance Agreement on the dates appearing below. This Severance
Agreement shall
become effective upon (i) its execution by all parties hereto, and
(ii)
expiration of the revocation period set forth in Section 5.1.5
above. If any
party fails to execute this Severance Agreement, or Mr. Gyenes
revokes this
Severance Agreement within the applicable revocation period, this
Severance
Agreement shall have no force or effect.
Dated: 7/30/07
/s/ Lawrence A. Gyenes
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Lawrence
A. Gyenes
ZILA, INC.
Dated: 7/30/07
By: /s/ Frank J. Bellizzi
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