Separation and General Release Agreement with Anthony A. DiTonno dated July 6, 2021

 

 

 

 

 

 

1. SEPARATION. Employee tenders, and the Company (including the Board of Directors of the Company) accepts, Employee’s voluntary resignation from all positions with the Company, including as a member of the Board of Directors, such voluntary resignation to be effective July 13, 2021 (“Effective Separation Date”).

 

2. SEVERANCE BENEFITS. In consideration of the release of claims and other promises contained herein and on the condition that this Agreement has become effective under Section 6 of this Agreement and that Employee fully complies with his obligations under this Agreement, the Company will provide Employee with the following:

 

(a) Severance pay in the total amount of Five Hundred and Sixty Two Thousand Eight Hundred and Fifty Two Dollars ($562,852) (less all applicable withholdings), payable in a lump sum on the sixtieth (60th) day following the Effective Separation Date (“Severance Payment Date”).

 

(b) Transition Services Grant. In consideration of Employee’s services and assistance in facilitating the transition of Chief Executive Officer responsibilities to the next Chief Executive Officer of the Company, Employee shall be awarded, as of the date hereof, options to purchase up to 50,000 shares of $0.0001 par value common stock of the Company pursuant to the Company’s 2016 Stock Incentive Plan, such options vesting in full on the Effective Separation Date, as further set forth in the Award Agreement attached hereto as Exhibit A (such award, the “Transition Services Grant”).

 

(c) Prior Equity Grants. As of the Effective Separation Date, the vesting on all unvested stock options (including, for the purpose of clarity, the Transition Services Grant) previously granted by Company to Employee shall accelerated and be vested and all stock options held by Employee shall be exercisable as set forth in the applicable option agreement, except that all options shall be exercisable through the earlier of: (i) the termination date of such options set forth in the applicable option agreement; or (ii) July 13, 2026. Employee understands that, as a result of such extension, any options not exercised by Employee with 90 days of the Effective Separation Date may no longer qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

 

(d) Separation Expenses. The Company will reimburse Executive for the attorney’s fees he has incurred in connection with the review and negotiation of this Executive Employment Agreement in an amount not to exceed $5,000.

 

(e) Conditioned on the proper and timely election by Employee and/or his qualified beneficiaries to continue group health insurance under COBRA after the Effective Separation Date, reimbursement of the applicable COBRA premiums paid by Employee for such continuation coverage for up to the eighteen (18) month period following the Effective Separation Date. Reimbursements for COBRA premium payments shall begin on the Severance Payment Date and shall be made as soon as possible following the Employee’s submission to the Company of proof of timely payments, but not later than thirty (30) days after the Employee’s submission of proof of timely payments; provided, however, all such claims for reimbursement shall be submitted by the Employee and paid by the Company no later than twenty-one (21) months following the termination of the Employee’s employment. Any obligation for the Company to make payments for COBRA reimbursement under this Agreement shall immediately cease when the Employee becomes eligible for health insurance from a subsequent employer, and the Employee shall promptly notify the Company of such subsequent eligibility. If Employee desires COBRA coverage, Employee shall bear full responsibility for applying for COBRA coverage and nothing herein shall constitute a guarantee of COBRA benefits. Under no circumstances will Employee be entitled to a cash payment or other benefit in lieu of reimbursements for the actual costs of premiums for COBRA continuation hereunder.The amount of expenses eligible for reimbursement during any calendar year shall not be affected by the amount of expenses eligible for reimbursement in any other calendar year.

 

3. EMPLOYEE ACKNOWLEDGEMENTS. By signing this Agreement, Employee represents that he has been properly paid for all time worked and received all wages and salary (including overtime pay), payment for accrued but unused vacation or paid time off, expense reimbursement, and all other amounts of any kind due to him from the Company and he is not entitled to any other compensation, payments or benefits of any nature as the result of the termination of his employment with the sole exception of (a) his final paycheck for work during his final payroll period which will be paid on the next regularly scheduled payroll date following the Effective Separation Date, (b) the pay and benefits under this Agreement, (c) any accrued and vested benefits payable pursuant to the Company’s employee benefit plans and (d) acceleration of vesting of stock option grants and extension of time to exercise as set forth in Section 2(b) above.

 

(a) In consideration of the benefits conferred by this Agreement, EMPLOYEE (ON BEHALF OF HIMSELF AND HIS ASSIGNS, HEIRS AND OTHER REPRESENTATIVES) RELEASES THE COMPANY AND ITS RELATED PARTIES (DEFINED BELOW) (“RELEASEES”) FROM ALL CLAIMS AND WAIVES ALL RIGHTS KNOWN OR UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE AGAINST THE COMPANY, ITS PREDECESSORS, SUBSIDIARIES OR AFFILIATES arising out of or relating to his employment with the Company and separation therefrom, to the fullest extent permitted by law, including but not limited to any and all claims, debts, demands, actions, causes of action, damages, liabilities, costs, and expenses:

 

(i) arising out of or relating to Employee’s employment with the Company and the separation of the same;

 

(ii) arising out of or relating to Employee’s employment agreement with the Company or ancillary agreements;

 

(iii) arising out of or relating to employment practices or policies of the Company;

 

(iv) arising under federal, state (including specifically, but not limited to, North Carolina) or local laws prohibiting discrimination, harassment, or retaliation on the basis of age (including but not limited to claims under the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended), sex, national origin, race, religion, disability, veteran status, or any other protected status, class, or characteristic;

 

(v) for compensation and benefits (including but not limited to claims under the Employee Retirement Income Security Act of 1974 (“ERISA”), Fair Labor Standards Act of 1938 (“FLSA”), Family and Medical Leave Act of 1993 (“FMLA”), all as amended, and similar federal, state, and local laws and claims under any other Company policy, plan or program;

 

(vi) under federal, state, or local law of any nature whatsoever (including but not limited to constitutional, statutory, tort, express or implied contract, or other common law, as well as breach of covenants of fair dealing and good faith, civil conspiracy, duress, promissory or equitable estoppel, fraud, mistake, misrepresentation, violation of public policy, retaliation, personal injury, breach of fiduciary duty, bad faith, and any other wrongful conduct); and

 

(vii) for attorneys’ fees.

 

 

 

(viii) apply to claims for workers’ compensation benefits, disability insurance benefits, vested retirement benefits, or unemployment benefits filed with the applicable state agencies or where otherwise prohibited by law;

 

(ix) bar a challenge under the Older Workers Benefit Protection Act of 1990 (OWBPA) to the enforceability of the waiver and release of ADEA claims set forth in this Agreement; or

 

(x) prohibit Employee from filing a charge with or participating in an investigation by the U.S. Equal Employment Opportunity Commission or other governmental agency with jurisdiction concerning the terms, conditions and privileges of employment or jurisdiction over the Company’s business or assisting with an investigation conducted internally by the Company; provided, however, that by signing this Agreement, Employee waives the right to, and shall not seek or accept, any monetary or other relief of any nature whatsoever in connection with any such charges, investigations or proceedings. This Agreement does not limit Employee’s right to receive an award for information provided to the SEC, FINRA, or any other securities regulatory agency or authority.

 

(b) Employee will not sue the Releasees on any matters relating to his employment or separation therefrom arising before the execution of this Agreement (with the sole exception of claims and challenges set forth in subparagraph (a) (v) through (vi) above), or join as a party with others who may sue on any such claims, or opt-in to an action brought by others asserting such claims, and in the event that Employee is made a member of any class asserting such claims without his knowledge or consent, Employee shall opt out of such action at the first opportunity.

(c) The Releasees which Employee is releasing by signing this Agreement include: the Company and its predecessors, successors, and assigns and its and/or their past, present and future owners, parents, subsidiaries, affiliates, predecessors, successors, assigns, officers, directors, employees, employee benefit plans (together with all plan administrators, trustees, fiduciaries and insurers) and agents.

 

 

 

 

 

 

 

 

 

6. RIGHT TO REVIEW AND REVOKE. The Company delivered this Agreement to Employee on July 1, 2021 by hand-delivery and desires that he have adequate time and opportunity to review and understand the consequences of entering into it. Accordingly, the Company advises him to consult with his attorney prior to executing it and that he has twenty-one (21) days within which to consider it. In the event that he does not return an executed copy of the Agreement to Margaret Rosenfeld at K&L Gates LLP, 4350 Lassiter at North Hills Avenue, Suite 300, Raleigh, NC 27609, by no later than the 22nd calendar day after receiving it, this Agreement and the obligations of the Company herein shall become null and void and Employee’s employment will terminate on the Effective Separation Date and he will receive base pay (less applicable deductions) through the Effective Separation Date and will not be eligible for the severance benefits described in Section 2. Employee may revoke the Agreement during the seven (7) day period immediately following his execution of the Agreement (“Revocation Period”). The Agreement will not become effective or enforceable until the Revocation Period has expired on the eighth (8th) day after Employee signs this Agreement. To revoke the Agreement, a written notice of revocation must be delivered to Margaret Rosenfeld at K&L Gates LLP.

7. CONFIDENTIALITY AND NON-DISPARAGEMENT. Employee shall keep the terms and provisions of this Agreement confidential, and Employee represents and warrants that since receiving this Agreement he has not disclosed, and going forward will not disclose, the terms and conditions of this Agreement to third parties, except as follows: (i) he may reveal the terms and provisions of this Agreement to members of his immediate family, or to an attorney whom he may consult for legal advice, or representatives of any governmental agency referenced in Section 4, provided that such persons agree to maintain the confidentiality of the Agreement and (ii) he may disclose the terms and provisions of this Agreement to the extent such disclosure is required by law. Employee represents and warrants that since receiving this Agreement, he (i) has not made, and going forward will not make, disparaging, defaming or derogatory remarks about the Company or its products, services, business practices, directors, officers, managers or employees to anyone; nor (ii) taken, and going forward will not take, any action that may impair the relations between the Company and its vendors, customers, employees, or agents or that may be detrimental to or interfere with, the Company or its business.

 

 

8. OTHER. Except as expressly provided in this Agreement, this Agreement supersedes all other understandings and agreements, oral or written, between the parties and constitutes the sole agreement between the parties with respect to its subject matter except that Employee specifically acknowledges and agrees that his obligations under Section 7 (Confidential Information and Competitive Business Activities) and the Confidentiality Agreement incorporated by reference in Section 7 of the Employment Agreement shall continue after the termination of that Employment Agreement in accordance with their terms. Each party acknowledges that no representations, inducements, promises or agreements, oral or written, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement and no agreement, statement or promise not contained in the Agreement shall be valid or binding on the parties unless such change or modification is in writing and is signed by the parties. Employee’s or the Company’s waiver of any breach of a provision of this Agreement shall not waive any subsequent breach by the other party. If a court of competent jurisdiction holds that any provision or sub-part thereof contained in this Agreement is invalid, illegal or unenforceable, that invalidity, illegality or unenforceability shall not affect any other provision in this Agreement.