Exhibit 10.25

 

EMPLOYMENT SEPARATION AGREEMENT

AND GENERAL RELEASE

THIS EMPLOYMENT SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is
entered into by and between Zyla Life Sciences US Inc., a Delaware Corporation
(the “Company”), and H. Jeffrey Wilkins, MD (“Executive” or “Wilkins”),
effective following Executive’s signature of it without timely revocation (the
“Effective Date”).

WHEREAS, the Company and Executive are parties to that Employment Agreement
dated June 3, 2019 (“Employment Agreement”);

WHEREAS, Executive has tendered his resignation effective December 31, 2019 (the
“Separation Date”);

WHEREAS, Company and Executive desire that Executive assist with a transition by
providing consulting services from the Separation Date through March 31, 2020
(the “Consulting Period”); and

WHEREAS, the Company and Executive desire to resolve any and all disputes
between them, including but not limited to with respect to any of Executive’s
severance rights, on the terms and conditions set forth in this Agreement.  For
the avoidance of doubt, nothing in this Agreement will be deemed to release or
waive Executive’s right to indemnification and advancement by the Company under
any applicable contract or law.

NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties agree as follows:

1.         Payment of Accrued Wages and Expenses Through the Separation Date.

(a)       Within thirty days after the Separation Date, the Company shall issue
to Executive his final paycheck, reflecting (i) Executive’s fully earned but
unpaid base salary, through the Separation Date at the rate then in effect, and
(ii) all accrued, unused vacation due Executive through the Separation
Date.  Except as otherwise set forth herein, Executive acknowledges and agrees
that with his final check, Executive will have received all monies, bonuses,
commissions, or other compensation he earned or was due during his employment by
the Company.

(b)      Expense Reimbursements.  The Company, within thirty (30) days after the
Separation Date, will reimburse Executive for any and all reasonable and
necessary business expenses incurred by Executive in connection with the
performance of his job duties prior to the Separation Date.  Executive shall
submit such expenses to the Company with supporting receipts and/or
documentation no later than thirty (30) days after the Separation Date.

(c)       Benefits.  With the exception of healthcare benefits for Executive
which continue until and including December 31, 2019, Executive’s entitlement to
benefits from the Company, and eligibility to participate in the Company’s
benefit plans, shall cease on the

 

 

 

Separation Date. Executive may elect to and is eligible to receive continued
healthcare coverage at Executive’s own expense pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) in
accordance with the provisions of COBRA.

2.         Severance.  Executive will receive a total amount of separation pay
of Three Hundred Eleven Thousand Two Hundred Fifty Dollars ($311,250.00)
(“Separation Pay”), payable in periodic installments in accordance with Zyla’s
normal payroll periods, minus applicable deductions and withholdings, over the
time period beginning on the first payroll date after the expiration of the
Revocation Period through the conclusion of nine (9) months thereafter. 
Executive shall also be paid, in addition to and at the same time as the first
periodic payment of his Separation Pay, a lump sum benefit stipend equal to 102%
of  the total annual cost of his current group medical, dental, vision and
prescription coverage (i.e., 1.02 x total monthly premium x 9).

3.         Consulting Services.  Executive agrees to reasonably assist with the
orderly transition of his duties focusing upon the filing of a patent
application with the U.S. Patent and Trademark Office for Indocin (the “Indocin
Patent”) and shall provide five hours of services per week to Company until such
filing or March 31, 2020, whichever comes first (“Consulting Period”).  In
consideration for the provision of these consulting services, Executive shall
receive a payment of Twenty-Five Thousand Dollars ($25,000.00) on or about
January 15, 2020.  In addition, if the Indocin Patent is filed by March 31,
2020, Executive shall receive a payment of One Hundred Thousand Dollars
($100,000.00) within 15 days of the filing of the Indocin Patent (“Consulting
Service Payments”).  If the Indocin Patent is not filed by March 31, 2020,
Executive shall receive payment of three hundred dollars ($300) per hour for
consulting work performed during the Consulting Period upon the submission of
time records and documentation satisfactory to the Company.

4.         Continuing Obligations.  Executive agrees to cooperate with the
Company and the Company’s legal counsel to the fullest extent possible with
respect to any pending or future governmental or regulatory investigation, civil
or administrative proceeding or arbitration, legal proceedings, and litigation,
including any internal investigations related thereto. Such cooperation shall
include but not be limited to telephone and in-person conferences with the
Company’s personnel and counsel and giving testimony at deposition and/or trial.

5.         Separation Benefits.  Except as otherwise set forth herein, Executive
acknowledges and agrees that he is not entitled to any severance or termination
benefits under any severance plan or program of the Company or any agreement
with the Company, including the Employment Agreement.

6.         Confirmation of Continuing Obligations.

(a)       Restrictive Covenants; Non-Competition; Non-Solicitation.  Executive
acknowledges that he continues to be bound by the provisions set forth in
Sections 7 and 8 of the Employment Agreement or any other agreement governing
the use of the Company’s confidential information that Executive signed in
connection with Executive’s employment in accordance with the terms thereof.

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(b)      Nondisparagement.  Executive agree that he will not defame, criticize,
or disparage the Company and its current and former directors, officers, agents,
affiliates, subsidiaries, predecessors, counsel, successors and assigns, and the
current and former employees and agents of the foregoing, both individually and
in their business capacities or its products and services in any medium or to
any person without limitation in time, except as may be required by law or
subpoena.  Executive further agree not to take any action that would harm the
business or professional reputation of the Company, its officers, directors,
employees, or shareholders.

(c)       Return of Property.  Except as necessary to perform Consulting
Services,  on or promptly following the Separation Date, Executive shall return
to the Company all of the Company’s property, documents (hard copy or electronic
files), and information. Executive has not and will not copy or transfer any
Company information, nor will Executive maintain any Company information after
the Separation Date. Executive acknowledges that he continues to be bound by the
provisions of Section 9 of the Employment Agreement governing the Company’s
intellectual and other property, including without limitation, through the
expiration of the Consulting Period.  At the conclusion of the Consulting
Period, Executive shall promptly return all Company property utilized to perform
the Consulting Services.

(d)      Whistleblower Provision.  Notwithstanding anything to the contrary
contained in this Agreement, (i) Executive will not be prevented from reporting
possible violations of federal law or regulation to any United States
governmental agency or entity in accordance with the provisions of and rules
promulgated under Section 21F of the Securities Exchange Act of 1934 or Section
806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection
provisions of state or federal law or regulation (including the right to receive
an award for information provided to any such government agencies), and (ii)
Executive acknowledges that he will not be held criminally or civilly liable for
(A) the disclosure of confidential or proprietary information that is made in
confidence to a government official or to an attorney solely for the purpose of
reporting or investigating a suspected violation of law, or (B) disclosure of
confidential or proprietary information that is made in a complaint or other
document filed in a lawsuit or other proceeding under seal or pursuant to court
order.

7.         General Release of Claims by Executive.

(a)       In exchange for the benefits of this Agreement, and in consideration
of the further agreements and promises set forth herein, Executive, on behalf of
himself and his executors, heirs, administrators, representatives and assigns,
hereby agrees to release and forever discharge the Company and all predecessors,
successors and their respective parent corporations, affiliates, related, and/or
subsidiary entities, and all of their past and present investors, directors,
shareholders, officers, general or limited partners, employees, attorneys,
agents and representatives, and the employee benefit plans in which Executive is
or has been a participant by virtue of his employment with or service to the
Company (collectively, the “Releasees”), from any and all claims, debts,
demands, accounts, judgments, rights, causes of action, equitable relief,
damages, costs, charges, complaints, obligations, promises, agreements,
controversies, suits, expenses, compensation, responsibility and liability of
every

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kind and character whatsoever (including attorneys’ fees and costs), whether in
law or equity, known or unknown, asserted or unasserted, suspected or
unsuspected (collectively, “Claims”), which Executive has or may have had
against such entities based on any events or circumstances arising or occurring
on or prior to the date hereof or on or prior to the date hereof, arising
directly or indirectly out of, relating to, or in any other way involving in any
manner whatsoever Executive’s employment by or service to the Company or the
termination thereof, and Executive’s right to purchase, or actual purchase of
any common shares or other equity interests of the Company or any of its
affiliates, including any and all claims arising under federal, state, or local
laws relating to employment, including without limitation claims of wrongful
discharge, breach of express or implied contract, fraud, negligent or
intentional misrepresentation, promissory estoppel, negligent or intentional
infliction of emotional distress, negligent or intentional interference with
contract or prospective economic advantage, unfair business practices,
defamation, libel, slander, negligence, personal injury, assault, battery,
invasion of privacy, false imprisonment, conversion, disability benefits, or
other liability in tort or contract; claims for recovery of attorneys’ fees and
costs; claims for any loss, cost, damage, or expense arising out of any dispute
over the non-withholding or other tax treatment of any of the proceeds received
by Executive as a result of this Agreement; and all legal and equitable claims
of any kind that may be brought in any court or administrative agency including,
without limitation, claims under Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000, et seq.; the Americans with Disabilities Act,
as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as
amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil
Rights Act of 1991; 42 U.S.C. Section 1981, et seq.; the Age Discrimination in
Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the “ADEA”); the
Equal Pay Act, as amended, 29 U.S.C. Section 206(d); regulations of the Office
of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and
Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor
Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee
Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Fair
Credit Reporting Act, 15 U.S.C. Section 1681, et seq.; the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Section 2100, et seq.; the Sarbanes-Oxley
Act, 18 U.S.C. Section 1514A.1, et seq.; the federal and any state constitution;
and all Pennsylvania state and local laws.

(b)      Notwithstanding the generality of the foregoing, Executive does not
release the following claims: (i) claims under this Agreement; (ii) claims for
unemployment compensation, workers’ compensation, or any disability benefits
pursuant to the terms of applicable law or policy; (iii) claims pursuant to the
terms and conditions of the federal law known as COBRA; (iv) claims for
indemnity under the bylaws of the Company, as provided for by applicable law or
under any applicable insurance policy with respect to Executive’s liability as
an employee, director or officer of the Company; and (v) Executive’s right to
bring to the attention of the Equal Employment Opportunity Commission or any
other federal, state or local government agency claims of discrimination,
harassment, interference with leave rights or retaliation; provided, however,
that Executive does release Executive’s right to secure any damages for such
alleged treatment; and (vi) Executive’s right to communicate or cooperate with
any government agency.

(c)       Executive acknowledges that he has been advised that, by statute or
common law, a general release may not extend to Claims of which Executive is not
aware at the

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time of entering into this Agreement which, if known by Executive may or would
have materially affected his decision to enter into the Agreement.  Being aware
of this fact, Executive waives any right he may have by statute or under common
law principles to preserve his ability to assert such unknown Claims.

(d)      Executive acknowledges that Executive is entitled to have twenty-one
(21) days’ time in which to consider this Agreement.  Executive further
acknowledges that the Company has advised him in writing that he is waiving his
rights under the ADEA, and that Executive should consult with an attorney of his
choice before signing this Agreement, and Executive has had sufficient time to
consider the terms of this Agreement.  Executive represents and acknowledges
that if Executive executes this Agreement before twenty-one (21) days have
elapsed, Executive does so knowingly, voluntarily, and upon the advice and with
the approval of Executive’s legal counsel (if any), and that Executive
voluntarily waives any remaining consideration period.

(e)       Executive understands that after executing this Agreement, Executive
has the right to revoke it within seven (7) days after his execution of it.  If
the seventh day falls on a weekend or federal holiday, he has until the next
business day to revoke.  Executive understands that this Agreement will not
become effective and enforceable unless the revocation period passes and
Executive does not revoke the Agreement in writing.  Executive understands that
this Agreement may not be revoked after the revocation period has
passed.  Executive also understands that any revocation of this Agreement must
be made in writing and delivered to Mari-Lou Biancarelli,  Executive Director,
Human Resources, by email at mtimmins@zyla.com on or before 5 p.m. Eastern
Standard Time on the last day of the revocation period following Executive’s
signature of the Agreement.

(f)       Executive understands that this Agreement shall become effective,
irrevocable, and binding upon Executive after his execution of it and the
expiration of the revocation period, so long as Executive has not revoked it
within the time period and in the manner specified in clause (e) above.

(g)      Executive further understands that Executive will not be eligible
to  receive the Consulting Service Payments under Section 3 of this Agreement
unless it is timely executed and allowed to become effective.

8.         Additional Representations and Warranties By Executive.  Executive
represents that Executive has no pending complaints or charges against the
Releasees, or any of them, with any state or federal court, or any local, state
or federal agency, division, or department based on any event(s) occurring prior
to the date Executive signs this Agreement, is not owed wages, commissions,
bonuses or other compensation, other than as set forth in this Agreement, and
did not, during the course of Executive’s employment sustain any injuries for
which Executive might be entitled to compensation pursuant to worker’s
compensation law.  Except as expressly permitted by this Agreement, Executive
further represents that Executive will not in the future, file, participate in,
encourage, instigate or assist in the prosecution of any claim, complaints,
charges or in any lawsuit by any party in any state or federal court against the
Releasees, or any of them, unless such aid or assistance is ordered by a court
or government agency or sought by compulsory legal process, claiming that the
Releasees, or any of them,

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have violated any local, state or federal laws, statutes, ordinances or
regulations based upon events occurring prior to the execution of this
Agreement. Nothing in this Section 8 is intended to affect Executive’s right to
communicate directly with, cooperate with, or provide information to, any
federal, state or local government regulator.

9.         No Admission of Liability.  By entering into this Agreement, the
parties do not admit, and specifically deny, any liability, wrongdoing or
violation of any statutory or common law, order, regulation or policy whether
under federal, state and/or local law.

10.       Knowing and Voluntary.  Executive represents and agrees that, prior to
signing this Agreement, Executive had the opportunity to discuss the terms of
this Agreement with legal counsel of Executive’s choosing.  Executive further
represents and agrees that Executive is entering into this Agreement knowingly
and voluntarily. Executive affirms that no promise was made to cause Executive
to enter into this Agreement, other than what is promised in this Agreement.
Executive further confirms that Executive has not relied upon any other
statement or representation by anyone other than what is in this Agreement as a
basis for Executive’s agreement.

11.       Miscellaneous.

(a)       Modification; Prior Claims.  This Agreement and the Employment
Agreement as modified herein, set forth the entire understanding of the parties
with respect to the subject matter hereof and supersede all existing agreements
between them concerning such subject matter.  Except as preserved by express
reference in this Agreement, the Employment Agreement shall be superseded
entirely by this Agreement and such agreements shall be terminated and be of no
further force or effect.  This Agreement may be amended or modified only with
the written consent of Executive and an authorized representative of the
Company.  No oral waiver, amendment or modification will be effective under any
circumstances whatsoever.

(b)      Assignment; Assumption by Successor.  The rights of the Company under
this Agreement may, without the consent of Executive, be assigned by the
Company, in its sole and unfettered discretion, to any person, firm, corporation
or other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company.  The Company will require any successor
(whether direct or indirect, by purchase, merger or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place; provided,  however, that no such assumption shall relieve the Company of
its obligations hereunder.  As used in this Agreement, the “Company” shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.

(c)       Third‑Party Beneficiaries.  This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person not a party
to this Agreement.

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(d)      Waiver.  The failure of either party hereto at any time to enforce
performance by the other party of any provision of this Agreement shall in no
way affect such party’s rights thereafter to enforce the same, nor shall the
waiver by either party of any breach of any provision hereof be deemed to be a
waiver by such party of any other breach of the same or any other provision
hereof.

(e)       Non-transferability of Interest.  None of the rights of Executive to
receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive.  Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.

(f)       Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
the conflicts of law provisions thereof.

(g)      Ambiguities.  The general rule that ambiguities are to be construed
against the drafter shall not apply to this Agreement.  In the event that any
language of this Agreement is found to be ambiguous, all parties shall have the
opportunity to present evidence as to the actual intent of the parties with
respect to any such ambiguous language.

(h)      Severability.  If any sentence, phrase, paragraph, subparagraph or
portion of this Agreement is found to be illegal or unenforceable, such action
shall not affect the validity or enforceability of the remaining sentences,
phrases, paragraphs, subparagraphs or portions of this Agreement.

(i)       Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which together
shall constitute one and the same instrument.

(j)       Withholding and other Deductions.  All compensation payable or
provided to Executive hereunder shall be subject to such deductions as the
Company is from time to time required to make pursuant to law, governmental
regulation or order.

(k)      Code Section 409A.

(i)         Notwithstanding anything to the contrary in this Agreement, no
payment or benefit to be paid or provided to Executive upon his termination of
employment, if any, pursuant to this Agreement that, when considered together
with any other payments or benefits, are considered deferred compensation under
Code Section 409A (together, the “Deferred Payments”) will be paid or otherwise
provided until Executive has a “separation from service” within the meaning of
Code Section 409A.  Similarly, no amounts payable to Executive, if any, pursuant
to this Agreement that otherwise would be exempt from Code Section 409A pursuant
to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive
has a “separation from service” within the meaning of Section 409A.

(ii)        Notwithstanding anything to the contrary in this Agreement, if

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Executive is a “specified employee” within the meaning of Code Section 409A at
the time of Executive’s termination of employment (other than due to death),
then the Deferred Payments that are payable within the first six (6) months
following Executive’s separation from service, will become payable on the first
payroll date that occurs on or after the date six (6) months and one (1) day
following the date of Executive’s separation from service.  All subsequent
Deferred Payments, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit.  Notwithstanding anything herein
to the contrary, if Executive dies following Executive’s separation from
service, but prior to the six (6) month anniversary of the separation from
service, then any payments delayed in accordance with this paragraph will be
payable in a lump sum as soon as administratively practicable after the date of
Executive’s death and all other Deferred Payments will be payable in accordance
with the payment schedule applicable to each payment or benefit.  Each payment
and benefit payable under this Agreement is intended to constitute a separate
payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(iii)      Any amount paid under this Agreement that satisfies the requirements
of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations will not constitute a Deferred Payment for purposes of
clauses (i) and (ii) above.

(iv)       Any amount paid under this Agreement that qualifies as a payment made
as a result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the limits
set forth therein will not constitute a Deferred Payment for purposes of clauses
(i) and (ii) above.

(v)        This Agreement is intended to be written, administered, interpreted
and construed in a manner such that no payment or benefits provided under the
Agreement become subject to (A) the gross income inclusion set forth within Code
Section 409A(a)(1)(A) or (B) the interest and additional tax set forth within
Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A
Penalties”), including, where appropriate, the construction of defined terms to
have meanings that would not cause the imposition of Section 409A Penalties.  In
no event shall the Company be required to provide a tax gross-up payment to
Executive or otherwise reimburse Executive with respect to Section 409A
Penalties.   The Company and Executive agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any Section 409A
Penalties on Executive.

(vi)       Any reimbursement of expenses or in-kind benefits payable under this
Agreement shall be made in accordance with Treasury Regulation Section
1.409A-3(i)(1)(iv) and shall be paid on or before the last day of Executive’s
taxable year following the taxable year in which Executive incurred the
expenses.  The amount of expenses reimbursed or in-kind benefits payable in one
year shall not affect the amount eligible for reimbursement or in-kind benefits
payable in any other taxable year of Executive’s, and Executive’s right to
reimbursement for such amounts shall not be subject to liquidation or exchange
for any other benefit.

(l)       Taxes; Right to Seek Independent Advice.  Executive understands and
agrees that all payments under this Agreement will be subject to appropriate tax

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withholding and other deductions, as and to the extent required by
law.  Executive acknowledges and agrees that neither the Company nor the
Company’s counsel has provided any legal or tax advice to Executive and that
Executive is free to, and is hereby advised to, consult with a legal or tax
advisor of Executive’s choosing.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

 

 

ZYLA LIFE SCIENCES

 

 

 

 

 

 

 

By:

/s/ TODD N. SMITH

 

Name:

Todd N. Smith

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

/s/ H. JEFFREY WILKINS

 

H. Jeffrey Wilkins, MD

 

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