Exhibit 10.1

 

TALON THERAPEUTICS, INC.

400 Oyster Point Boulevard, Suite 200

South San Francisco, CA 94080

 

 

July 16, 2013

 

Hand Delivered

Personal and Confidential

 

 

Craig W. Carlson

44 20th Avenue

San Francisco, CA 94121

 

 

Re:          Separation Agreement and Release

 

Dear Craig:

 

As we have discussed with you, your employment with Talon Therapeutics, Inc.
(the “Company”) will end effective upon the closing of the transactions
contemplated by the Stock Purchase Agreement dated July 16, 2013 (the “Purchase
Agreement”), among the Company, Spectrum Pharmaceuticals, Inc. and Eagle
Acquisition Merger Sub, Inc.

 

The purpose of this Separation Agreement and Release letter (“Agreement”) is to
set forth the severance pay and benefits to which you are entitled under your
Employment Agreement with the Company dated February 5, 2010, as amended from
time to time (your “Employment Agreement”), in exchange for your agreement to
the terms and conditions of this Agreement as required by your Employment
Agreement.

 

By your signature below, you agree to the following terms and conditions:

 

1.             End of Employment.     Your employment with the Company will end
effective at the close of business on July 17, 2013. Upon your receipt of your
final paycheck, which includes payment for services through July 17, 2013, you
will have received all wages and compensation owed to you by virtue of your
employment with the Company or termination thereof. Upon your receipt of payment
from the Company for your ending balance of accrued but unused PTO (219.74
hours) at your regular rate, you will have received all benefits owed to you by
virtue of your employment with the Company or termination thereof. If
applicable, information regarding your right to elect COBRA coverage will be
sent to you via separate letter.

 

 

 
 

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Page 2

 

You are not eligible for any other payments or benefits by virtue of your
employment with the Company or termination thereof except for those expressly
described in this Agreement. You will not receive the severance pay and benefits
described in Section 2 of this Agreement if you (i) do not sign this Agreement
and return it to the Company by the stated due date, (ii) rescind this Agreement
after signing it, or (iii) violate any of the terms and conditions set forth in
this Agreement.

 

2.             Severance Pay and Benefits. Specifically in consideration of your
signing this Agreement and subject to the limitations, obligations, and other
provisions contained in this Agreement, in accordance with your Employment
Agreement, the Company agrees as follows:

 

a.             To pay you severance pay in the gross amount of Three Hundred
Forty-Six Thousand Nine Hundred Eight and 12/100 Dollars ($346,908.12), less
applicable deductions and withholding, representing twelve (12) months of your
ending annualized base salary, to be paid in accordance with the Company’s
regular payroll practices beginning with the first regularly scheduled payday
immediately following the 60th day after your termination date, with the first
payment to equal the aggregate amount of payments that the Company would have
paid through such date had such payments commenced on the date of your
termination of employment, with the balance of the payments paid thereafter on
the monthly installment scheduled described above;

 

b.             To provide you with health insurance (on the identical terms
provided to all other employees of the Company at the time of your termination)
for twelve (12) months immediately following your last day of employment with
the Company, which shall include reimbursements for 12 months of COBRA (as
defined below) payments; and

 

c.             To pay you the gross amount of Six Thousand Five Hundred Fifty
Dollars ($6,550.00), less applicable withholding, to be used for you to
contribute to your health savings account, with such payment being made to you
in a lump sum on the 60th day following your termination date.

 

Upon receipt of the pay and benefits described in this Section 2, you
acknowledge and agree that you will have received all severance pay and benefits
owing to you under your Employment Agreement, as amended.

 

3.             Release of Claims. Specifically in consideration of the severance
pay and benefits described in Section 2, to which you would not otherwise be
entitled, by signing this Agreement you, for yourself and anyone who has or
obtains legal rights or claims through you, agree to the following:

 

a.             Notwithstanding the provisions of Section 1542 of the Civil Code
of the State of California (see Section 3.f. below), you hereby do release and
forever discharge the “Released Parties” (as defined in Section 3.e. below) of
and from any and all manner of claims, demands, actions, causes of action,
administrative claims, liability, damages, claims for punitive or liquidated
damages, claims for attorney’s fees, costs and disbursements, individual or
class action claims, or demands of any kind whatsoever, you have or might have
against them or any of them, whether known or unknown, in law or equity,
contract or tort, arising out of or in connection with your employment with the
Company, or the termination of that employment, or otherwise, and however
originating or existing, from the beginning of time through the date of your
signing this Agreement.

 

 

 
 

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b.     This release includes, without limiting the generality of the foregoing,
any claims you may have for wages, bonuses, commissions, penalties,
compensation, deferred compensation, vacation pay, equity rights (including all
rights to stock options granted to you under the Company’s 2010 Equity Incentive
Plan, as amended, the Company’s 2004 Stock Incentive Plan, as amended and the
Company’s 2003 Stock Option Plan, as amended and all rights to any other stock
options to acquire the Company’s common (whether granted pursuant to any stock
or equity incentive plan or otherwise), other paid time off, separation pay or
benefits, defamation, invasion of privacy, negligence, emotional distress,
breach of contract, estoppel, improper discharge (based on contract, common law,
or statute, including any federal, state or local statute or ordinance
prohibiting discrimination or retaliation in employment), violation of the
United States Constitution, the California Constitution, the California Fair
Employment and Housing Act, Cal. Gov’t Code § 12900 et seq., California Family
Rights Act, Cal. Gov’t Code § 12945.1, et seq., the California Unruh Civil
Rights Act, Cal. Civ. Code §§ 51-54.3, California Discrimination in Payment on
Basis of Sex, Cal. Lab. Code §§ 1197.5, 1199 and 1199.5, the Age Discrimination
in Employment Act, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act,
42 U.S.C. § 2000e et seq., the Americans with Disabilities Act, 42 U.S.C. §
12101 et seq., the Employee Retirement Income Security Act of 1976, 29 U.S.C. §
1001 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. 210l, et seq., the
Sarbanes-Oxley Act of 2002, any waivable claim arising under California codes,
and any claim for retaliation, harassment or discrimination based on sex,
pregnancy, race, color, religion, creed, age, national origin, ancestry,
disability (physical or mental), marital status, sexual orientation or
affectional preference, genetic information, military status or discharge, or
other protected class, or sexual or other harassment. You hereby waive any and
all relief not provided for in this Agreement. You understand and agree that, by
signing this Agreement, you waive and release any past, present, or future claim
to employment with the Company.

 

c.             If you file, or have filed on your behalf, a charge, complaint,
or action, you agree that the payments and benefits described above in Section 2
is in complete satisfaction of any and all claims in connection with such
charge, complaint, or action and you waive, and agree not to take, any award of
money or other damages from such charge, complaint, or action.

 

d.             You are not, by signing this Agreement, releasing or waiving (1)
any vested interest you may have in the Company’s Amended and Restated 2012
Change of Control Payment Plan, as amended, or in any 401(k) or profit sharing
plan by virtue of your employment with the Company, (2) any rights or claims
that may arise after the Agreement is signed, (3) the post-employment payments
and benefits specifically promised to you under Sections 1 and 2 of this
Agreement, (4) the right to institute legal action for the purpose of enforcing
the provisions of this Agreement, (5) any rights you have under workers
compensation laws, (6) any rights you have under state unemployment compensation
benefits laws, (7) the right to file a charge with a governmental agency such as
the Equal Employment Opportunity Commission (“EEOC”), although, as noted above,
you waive, and agree not to take, any award of money or other damages if you
file such a charge or have a charge filed on your behalf, (8) the right to
testify, assist, or participate in an investigation, hearing, or proceeding
conducted by a governmental agency, including the EEOC, or (9) any rights you
have under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).

 

 

 
 

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e.             The “Released Parties,” as used in this Agreement, shall mean
Talon Therapeutics, Inc. and its parent, subsidiaries, divisions, insurers, if
any, and its and their present and former officers, directors, shareholders,
trustees, employees, agents, attorneys, representatives and consultants, and the
successors and assigns of each, whether in their individual or official
capacities, and the current and former trustees or administrators of any pension
or other benefit plan applicable to the employees or former employees of the
Company, in their official and individual capacities.

 

f.             Waiver of Section 1542 Rights. Except as set forth in this
Agreement, you understand and agree that this Release SHALL APPLY TO ALL UNKNOWN
OR UNANTICIPATED CLAIMS, ACTIONS OR DEMANDS OF ANY KIND WHATSOEVER ARISING OUT
OF OR IN CONNECTION WITH YOUR EMPLOYMENT BY THE COMPANY OR THE TERMINATION OF
THAT EMPLOYMENT, AS WELL AS THOSE KNOWN AND ANTICIPATED. You hereby waive any
and all rights under Section 1542 of the Civil Code of the State of California
and irrevocably and unconditionally release and forever discharge the Company
from and with respect to all claims described in Section 3 of this Agreement.
Section 1542 has been duly explained to you and reads as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

You further acknowledge that you are aware that you may hereafter discover facts
in addition to or different from those you know or believe to be true with
respect to the disputes that are resolved by this separation agreement and
release, but that it is your intention to fully, finally, and forever release
all claims related to those disputes, whether or not you know about them.

 

4.             Notice of Right to Consult Attorney and Forty-Five (45) Calendar
Day Consideration Period. By signing this Agreement, you acknowledge and agree
that the Company has informed you by this Agreement that (1) you have the right
to consult with an attorney of your choice prior to signing this Agreement, and
(2) you are entitled to forty-five (45) calendar days from your receipt of this
Agreement to consider whether the terms are acceptable to you. You have the
right, if you choose, to sign this Agreement prior to the expiration of the
forty-five (45) day period.

 

 

 
 

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Page 5

 

5.             Notification of Rights under the Federal Age Discrimination in
Employment Act (29 U.S.C. § 621 et seq.). You are hereby notified of your right
to rescind the release of claims contained in Section 3 with regard to claims
arising under the federal Age Discrimination in Employment Act, 29 U.S.C. § 621
et seq., within seven (7) calendar days of your signing this Agreement. In order
to be effective, the rescission must (a) be in writing; (b) delivered to Chief
Financial Officer, Talon Therapeutics, Inc. c/o Spectrum Pharmaceuticals, Inc.,
11500 South Eastern Ave., Suite 240, Henderson, NV 89052 by hand or mail within
the required period; and (c) if delivered by mail, the rescission must be
postmarked within the required period, properly addressed to the Company’s Chief
Financial Officer, as set forth above, and sent by certified mail, return
receipt requested. You understand and agree that if you rescind any part of this
Agreement in accordance with this Section 5, the Company will have no obligation
to provide you the payments and other consideration described in Section 2 of
this Agreement and you will be obligated to return promptly to the Company any
payment(s) and other consideration already received in connection with Section 2
of this Agreement.

 

6.             Return of Property. You acknowledge and agree that all documents
and materials relating to the business of, or the services provided by, the
Company are the sole property of the Company. You agree and represent that you
have returned to the Company all of its property, including but not limited to,
all documents and materials, whether on computer disc, hard drive or other form,
and all copies thereof, within your possession or control, which in any manner
relate to the business of, or the duties and services you performed on behalf of
the Company.

 

7.             Cooperation. During the 60-day period following the date of your
signature to this Agreement, you promise and agree to respond in a timely and
helpful manner via telephone or email to the Company’s inquiries regarding your
services to the Company (e.g., status of projects, location of documents/files,
passwords).

 

8.             Non-Disparagement and Confidentiality. The Company and you each
agree that following the date of this Agreement, neither will intentionally,
directly or indirectly, disparage, whether or not true, the name or reputation
of the other party. You also promise and agree not to disclose or discuss,
directly or indirectly, in any manner whatsoever, any information regarding
either (1) the contents and terms of this Agreement, or (2) the substance and/or
nature of any dispute between the Company and any employee or former employee,
including yourself. You agree that the only people with whom you may discuss
this confidential information are your legal, financial and tax advisors and
your spouse, if applicable, provided they agree to keep the information
confidential, or as otherwise required by law.

 

 
 

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9.             Remedies. If you breach any term of this Agreement, the Company
shall be entitled to its available legal and equitable remedies, including but
not limited to terminating and recovering any and all payments and benefits made
or to be made under Section 2 of this Agreement and payment by you of its
attorneys’ fees and costs. If the Company seeks and/or obtains relief from an
alleged breach of this Agreement, all of the provisions of this Agreement shall
remain in full force and effect. In the event the Company breaches any term of
this Agreement, including its obligation to make the payments described in
Section 2 of this Agreement, you shall be entitled to available legal and
equitable remedies, including but not limited to payment by the Company of your
attorneys’ fees and costs.

 

10.           Non-Admission. It is expressly understood that this Agreement does
not constitute, nor shall it be construed as, an admission by the Company or you
of any liability or unlawful conduct whatsoever. The Company and you
specifically deny any liability or unlawful conduct.

 

11.           Successors and Assigns. This Agreement is personal to you and may
not be assigned by you without the written agreement of the Company. The rights
and obligations of this Agreement shall inure to the successors and assigns of
the Company.

 

12.           Enforceability. If a court finds any term of this Agreement to be
invalid, unenforceable, or void, the parties agree that the court shall modify
such term to make it enforceable to the maximum extent possible. If the term
cannot be modified, the parties agree that the term shall be severed and all
other terms of this Agreement shall remain in effect.

 

13.           Law Governing. This Agreement shall be governed and construed in
accordance with the laws of the State of California.

 

14.           Full Agreement. This Agreement contains the full agreement between
you and the Released Parties and may not be modified, altered, or changed in any
way except by written agreement signed by both parties. The parties agree that
this Agreement supersedes and terminates any and all other written and oral
agreements and understandings between the parties. Notwithstanding the
foregoing, if you have previously signed an agreement or agreements with the
Company containing confidentiality, trade secret, noncompetition,
nondisparagement, nonsolicitation, inventions, and/or similar provisions, your
obligations under such agreement(s) shall continue in full force and effect
according to their terms and will survive the termination of your employment. In
addition, all of your rights under the Company’s Amended and Restated 2012
Change of Control Payment Plan and Section 6.10 of the Purchase Agreement shall
continue in full force and effect according to its terms and survive the
termination of your employment.

 

15.           Counterparts.      This Agreement may be executed by facsimile or
PDF transmission and in counterparts, each of which shall be deemed an original
and all of which shall constitute one instrument.

 

 

 
 

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16.           Acknowledgment of Reading and Understanding. By signing this
Agreement, you acknowledge that you have read this Agreement, including the
release of claims contained in Section 3 and the Memorandum attached hereto, and
understand that the release of claims is a full and final release of all claims
you may have against the Company and the other entities and individuals covered
by the release. By signing, you also acknowledge and agree that you have entered
into this Agreement knowingly and voluntarily.

 

The deadline for accepting this Agreement is 5:00 p.m. on the 46th calendar day
following your receipt of this Agreement. If not accepted by such time, the
offer contained herein will expire. After you have reviewed this Agreement and
obtained whatever advice and counsel you consider appropriate regarding it,
please evidence your agreement to the provisions set forth in this Agreement by
dating and signing the Agreement. Please then return a signed Agreement to me no
later than 5:00 p.m. on the 46th calendar day following your receipt of this
Agreement. Please keep a copy for your records.

 

 
 

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We thank you for your service to Talon and wish you all the best.

 

Sincerely,

 

Talon Therapeutics, Inc.

 

 

/s/ Kurt A. Gustafson

 

Kurt A. Gustafson

 

Chief Financial Officer

 

               

Enclosure (OWBPA Memorandum)

 

 
 

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Page 9

 

ACKNOWLEDGMENT AND SIGNATURE

 

By signing below, I, Craig W. Carlson, acknowledge and agree to the following:

 

●

I have had adequate time to consider whether to sign this Separation Agreement
and Release.

●

I have read this Separation Agreement and Release carefully.

●

I understand and agree to all of the terms of the Separation Agreement and
Release.

●

I am knowingly and voluntarily releasing my claims against the Company and the
other persons and entities defined as the Released Parties.

●

I have not, in signing this Agreement, relied upon any statements or
explanations made by the Company except as for those specifically set forth in
this Separation Agreement and Release.

●

I intend this Separation Agreement and Release to be legally binding.

●

I am signing this Separation Agreement and Release on or after my last day of
employment with the Company.

 

Accepted this 16th day of July  , 2013.

 

 

/s/Craig W. Carlson

 

Craig W. Carlson

 

 

 

 
 

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Page 10 

 

MEMORANDUM

 

 

The Older Workers Benefit Protection Act is a federal law that requires certain
information be provided to employees who are age 40 or older and are part of an
exit incentive or other employment termination program. For that reason, you are
being given this memo.

 

1.           Persons Covered. The decisional unit that the Company considered in
deciding who to terminate as a result of the closing of the transactions
contemplated by the Stock Purchase Agreement dated July 16, 2013, among the
Company, Spectrum Pharmaceuticals, Inc. and Eagle Acquisition Merger Sub, Inc.
and offer severance pay and benefits in accordance with their applicable
agreements was the President & Chief Executive Officer and Senior Vice
President, Chief Financial Officer of the Company.

 

2.           Eligibility Factors. To be eligible for consideration for severance
pay and benefits, an individual must have been selected for termination by the
Company from the decisional unit described above. The Company considered the
following factors when making termination decisions: position held.

 

3.           Time Limits. Severance pay and benefits are being made available
upon termination of employment to those employees as indicated on the attached
Exhibit A. You will have 45 days from the day you receive the Separation
Agreement and Release (“Agreement”) accompanying this Memorandum to consider
whether the Agreement is acceptable to you and to accept or reject it. If you
accept the Agreement you will, from the date you sign it, have seven days to
rescind your release of federal Age Discrimination in Employment Act claims.

 

4.           Job Titles and Ages. The job titles and ages of all individuals who
have been selected for termination and offered severance pay and benefits are
listed in the attached Exhibit A. The job titles and ages of all individuals in
the decisional unit who were not selected for termination are listed in the
attached Exhibit B. Note: Ages were determined as of July 15, 2013.

 

 
 

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Exhibit A

 

The following is a listing of the ages and job titles of employees in the
decisional unit who were selected for termination and offered severance pay and
benefits per their applicable agreement, for signing a release.

 

TITLE

AGE

 

 

President & Chief Executive Officer

49

Senior Vice President, Chief Financial Officer  

65

                                    

 
 

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Exhibit B

 

The following is a listing of the ages and job titles of employees in the
decisional unit who were not selected for termination.

 

 

TITLE

AGE

 

 

None.