SEVERANCE AND SETTLEMENT
AGREEMENT AND RELEASE
This Severance and
Settlement Agreement and Release (“Agreement”) is
entered into by and between Penwest Pharmaceuticals Co. (the
“Company”) and Benjamin L. Palleiko (the
“Employee”).
WHEREAS, the
parties wish to resolve amicably the Employee’s separation
from the Company and establish the terms of the Employee’s
severance arrangement;
NOW, THEREFORE, in
consideration of the promises and conditions set forth herein, the
sufficiency of which is hereby acknowledged, the Company and the
Employee agree as follows:
1.
Termination Date . The Employee’s date of termination
from the Company is January 21, 2009 (the “Termination
Date”). By executing this Agreement, the Employee hereby
resigns, effective as of the Termination Date, from his position as
an officer of the Company.
2.
Consideration . In return for the Employee’s release
and other promises set forth in this Agreement, the Company agrees
to provide the Employee with the following pay and other benefits,
referred to herein as “Severance Benefits”:
(a) The
Company agrees to provide severance pay to the Employee in the form
of salary continuation (at the rate of $ 11,576.92 , less
all applicable taxes and withholdings, per regular Company pay
period) for a period commencing on the Effective Date (as defined
in Section 19 below) and ending on the date nine
(9) months following the Effective Date (such period being
referred to as the “Severance Period”). The severance
pay will be paid to the Employee in accordance with the
Company’s regular payroll practices, with the first payment
to be made no earlier than the Effective Date.
(b) Upon
the Effective Date, (i) the vesting of the options to purchase
45,500 shares of common stock granted to the Employee on
March 13, 2008 shall be accelerated such that as of the
Effective Date such options shall be deemed vested and shall be
exercisable for a total of 11,375 shares of common stock and
(ii) the vesting of the options to purchase 19,500 shares of
common stock granted to the Employee on June 11, 2008 shall be
accelerated such that as of the Effective Date such options shall
be deemed vested and shall be exercisable for a total of 4,875
shares of common stock..
(c) If
the Employee elects to continue group medical insurance pursuant to
the federal COBRA law, then, after the Effective Date, the Company
will pay the Company portion of the Employee’s health and
dental insurance premiums for the Severance Period. Thereafter, the
Employee may elect to continue such coverage under COBRA for the
remainder of the COBRA period, with the Employee paying 100% of the
cost of such coverage.
3. Other
Benefits . All employee benefits (other than health and dental
insurance), that the Employee received under Company-provided
benefit plans, programs or practices, including without limitation
401K and Employee Stock Purchase Plan (“ESPP”),
terminated on the Termination Date.
4. 2008
Bonus . At the next payroll period following the Termination
Date, the Company will pay the Employee a bonus of $36,120 for the
2008 year.
5.
Release . The Employee hereby fully, forever, irrevocably
and unconditionally releases, remises and discharges the Company,
and its parents, subsidiaries, affiliates, successors, assigns,
predecessors and present or former officers, directors,
shareholders, agents, employees, attorneys, fiduciaries, plan
administrators, and representatives (collectively
“Releasees”) of and from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including
attorneys’ fees and costs), of every kind and nature, known
or unknown, which the Employee ever had or now has against any
Releasees, including those arising out of the Employee’s
employment with or separation from the Company, through the date of
the Employee’s execution of this Agreement.
Without limiting
the foregoing, the Employee specifically releases and fully
discharges the Releasees of and from any and all claims, demands,
causes of action, and rights, including but not limited to: any
alleged violation of federal, state or local laws prohibiting
discrimination on the basis of sex, race, age, disability, national
origin, color, religion, veteran status, marital status, sexual
orientation, and specifically including all claims under the
federal Age Discrimination in Employment Act (ADEA), the Older
Workers Benefit Protection Act, Title VII of the Civil Rights Act
of 1964, as amended, the Civil Rights Act of 1866, the Americans
with Disabilities Act of 1990 (ADA), and the Equal Pay Act of 1963,
the Family and Medical Leave Act of 1993; the ERISA, state family
and
medical leave
laws and any federal or state wage payment laws, including the Fair
Labor Standards Act and the New York and Connecticut Wage Payment
Laws, to the extent permitted by law; any other federal, state
(including New York and Connecticut) or local civil or human rights
laws; any public policy, contract, tort or common law obligation,
including but not limited to breach of express or implied contract
or of an implied covenant of good faith and fair dealing, negligent
or intentional infliction of emotional distress; any claim of
retaliation, any claim for compensation, bonus, incentive pay,
vacation pay, sick pay, expense reimbursement other than for those
expenses already submitted but not yet reimbursed, or other
payments or benefits; and any obligation for costs, fees or other
expenses.
Covenant Not
to Sue . The Employee has not and will not commence any action,
lawsuit, or other legal proceeding against the Company or file any
complaint with any federal, state, or local agency against the
Company relating to any claim arising before the
Employee’
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