Exhibit 10.9

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT effective as of March 24, 2020 (this “Agreement”) between
Annovis Bio, Inc. (the “Company”), a Delaware corporation, and Jeffrey B.
McGroarty (the “Executive”).

 

Background:

 

The parties desire to enter into this Agreement to provide for the employment of
the Executive by the Company and for certain other matters in connection with
such employment, all as set forth more fully in this Agreement. Certain
capitalized terms used in this Agreement have the respective meanings given to
them in Exhibit A hereto.

 

Terms:

 

NOW, THEREFORE, in consideration of the premises and covenants set forth herein,
and intending to be legally bound hereby, the parties to this Agreement hereby
agree as follows:

 

1.            Position and Duties. 

 

(a)           Position and Duties. The Company agrees that the Executive shall
be employed by the Company to serve as Chief Financial Officer of the Company.
The Executive shall report to the Board of Directors of the Company (the
“Board”). The Executive agrees to be so employed by the Company and agrees to
devote substantially all of his business time, attention, skill and efforts to
perform services for the Company and to faithfully and diligently discharge and
fulfill the Executive’s duties hereunder to the best of his abilities. In so
doing, the Executive shall perform such executive, managerial, administrative
and financial functions as are required to develop the Company’s business and to
perform other duties assigned to the Executive by the Board that are consistent
with the Executive’s title as Chief Financial Officer. The Executive shall
perform his duties hereunder primarily at the Company’s principal offices. In
the performance of his duties, the Executive shall travel to such other places
at such times as the needs of the Company may from time-to-time dictate or be
desirable.

 

(b)           Other Activities. Notwithstanding Section 1(a), the Executive may
engage in other business and professional activities to the extent that they do
not interfere with the Executive’s obligations under this Agreement, provided
that each of those activities is first disclosed to and approved by the Board.
The parties acknowledge that activities in which the Executive is currently
engaged have been disclosed to and approved by the Board.

 

2.            Term. The Executive’s employment under this Agreement shall
commence on the Commencement Date and shall end when terminated pursuant to
Section 4.

 

 

 

 

3.            Compensation.

 

(a)           Base Salary. During the term of the Executive’s employment under
this Agreement, the Executive shall be paid an annual salary at the rate of
$300,000 (the “Base Salary”), retroactive to January 1, 2020, payable in
accordance with the Company’s payroll practices and policies in effect from time
to time and subject to applicable withholding of income taxes, social security
taxes and other such other payroll deductions as are required by law or
applicable employee benefit programs. The Board shall review the Executive’s
Base Salary for annual increases, commencing with the Base Salary for the 2021
calendar year.

 

(b)           Annual Bonus. With respect to each fiscal year of the Company
during the continued full-time employment of the Executive hereunder, commencing
with the 2020 fiscal year, the Executive will be eligible to be considered for
an annual performance bonus (the “Annual Bonus”) in an amount of up to 50% of
the Executive’s Base Salary. The Annual Bonus, if any, will be awarded by the
Board in its sole discretion based on the achievement of Company and personal
performance goals established by the Board on an annual basis, following
consultation with the Executive and shall take into account the stock options
and any other equity incentive awards that vest in the year the bonus is paid.
Any Annual Bonus awarded to the Executive hereunder may be paid in cash or in
equity of the Company, as determined by the Board in its sole discretion, and
will be payable or issuable, less applicable taxes and withholdings, not later
than two and one-half months after the end of the fiscal year to which the
Annual Bonus relates in accordance with the Company’s customary practices for
annual bonus payments.

 

(c)           Equity Incentives. Subject to the approval of the Board, the
Executive shall be granted equity incentives under the Equity Incentive Plan and
shall be considered for future equity incentive awards as specified on Exhibit B
hereto. In addition, the Executive shall be eligible to participate in future
equity incentive programs established by the Company from time to time in the
future in accordance with the terms of those programs.

 

(d)           Vacation and Fringe Benefits. The Executive shall be entitled to
participate in all vacation and other fringe benefit programs of the Company to
the extent and on the same terms and conditions as are accorded to other senior
management employees of the Company.

 

(e)           Reimbursement of Other Expenses. The Company shall reimburse the
Executive for the reasonable and necessary out-of-pocket business expenses
incurred by the Executive for or on behalf of the Company in furtherance of the
performance of the Executive’s duties hereunder in accordance with the Company’s
policies as approved by the Board from time to time, subject in all cases to the
Company’s requirements with respect to reporting and documentation of such
expenses.

 

(f)            Section 409A. If any reimbursement under this Section 3 is not
exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) then (i) any reimbursement in one calendar year shall not affect the
amount that may be reimbursed in any other calendar year; (ii) a reimbursement
(or right thereto) may not be exchanged or liquidated for another benefit or
payment; and (iii) a reimbursement shall be made no later than the end of the
calendar year following the calendar year in which the Executive incurred the
related expense.

 

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4.            Termination.

 

(a)           Death or Disability. The Executive’s employment with the Company
shall automatically terminate effective as of the date of the Executive’s death,
and the Company may terminate the employment of the Executive immediately upon
written notice to the Executive in the event of the Disability of the Executive.
In the event of termination of the Executive’s employment due to death or
Disability, the Company shall not have any further obligation or liability under
this Agreement except that the Company shall pay to the Executive or the
Executive’s estate (as applicable): (i) any portion of the Executive’s Base
Salary for the period up to the date of employment termination that has been
earned but remains unpaid; (ii) any expenses properly incurred but not yet
reimbursed, including, without limitation, the reimbursements provided for in
Section 3(e); (iii) any benefits that have accrued to the Executive under the
terms of the employee benefit plans of the Company, which benefits shall be paid
in accordance with the terms of those plans (the payments in clauses (i) through
(iii) collectively, the “Accrued Obligations”); and (iv) in the event of a
termination of employment due to the Executive’s death, the Annual Bonus awarded
pursuant to Section 3(b), if any, with respect to the fiscal year prior to the
fiscal year of termination, to the extend unpaid (the “Earned Bonus”). The
Accrued Obligations shall be paid on the first payroll date following the last
date of employment to the extent administratively feasible and, if not, then on
the second payroll date following the last date of employment. The Earned Bonus,
if any, will be paid when it would have been paid had Executive remained
employed with the Company.

 

(b)           Termination of the Executive’s Employment for Cause. The Company
may terminate the employment of the Executive for Cause immediately upon written
notice of such termination to the Executive. If the Executive’s employment with
the Company is terminated by the Company for Cause, the Company shall not have
any further obligation or liability under this Agreement except for the Accrued
Obligations. The Accrued Obligations shall be paid on the first payroll date
following the last date of employment to the extent administratively feasible
and, if not, then on the second payroll date following the last date of
employment.

 

(c)           Involuntary Termination.

 

(i)            The Company may terminate the employment of the Executive for any
reason other than one specified in Section 4(a) or Section 4(b) immediately upon
written notice of termination to the Executive, and the Executive may terminate
his employment with the Company for Good Reason immediately upon providing
written notice of such termination to the Company. Either of such terminations
shall be deemed an “Involuntary Termination” for purposes of this Agreement.

 

(ii)           Upon the occurrence of an Involuntary Termination, in addition to
the Accrued Obligations, and subject to the execution by the Executive of a
release in the form of Exhibit C hereto (the “Release”) and the compliance by
the Executive with the Release and all terms and provisions of this Agreement
and the Confidentiality and Invention Assignment Agreement (as defined in
Section 5) that survive the termination of the Executive’s employment by the
Company the Executive shall be entitled to receive (A) severance payments in an
amount equal to the Base Salary in effect on the termination date for a period
of 12 months; plus (B) monthly reimbursement (upon presentation of proof of
payment) for the medical insurance premiums at the same level as was in effect
on the termination date until the earlier of (1) the end of such 12-month period
or (2) the date the Executive becomes eligible for medical benefits through
another employer; provided, however, that if such Involuntary Termination shall
occur upon the closing of a Change of Control or within 12 months thereafter:
(A) the severance shall be payable in a single lump sum and (B) the Executive
shall also be entitled to receive an amount equal to 75% of the projected target
amount of the Executive’s Annual Bonus for the calendar year in which the
Executive’s employment termination occurs payable in a single lump sum, such
lump sum payments to be made in each case on the first regularly scheduled
payroll date that occurs on or after 60 days after the effective date of such
employment termination. Any payments due pursuant to this Section 4(c), other
than the Accrued Obligations, shall commence as soon as administratively
feasible within 60 days after the date of the Executive’s termination of
employment provided the Executive has timely executed and returned the Release
and, if a revocation period is applicable, the Executive has not revoked the
Release; provided, however, that if the 60-day period begins in one calendar
year and ends in a second calendar year, the severance payments shall begin to
be paid in the second calendar year. On the date that payments pursuant to
clauses (A) and (B) commence, the Company will pay the Executive in a single
lump sum payment, less applicable taxes and withholding, the payments that the
Executive would have received on or prior to such date but for the delay imposed
by the immediately preceding sentence, with the balance of the payments to be
paid as originally scheduled. The Accrued Obligations will be paid on the first
payroll date following last date of employment to the extent administratively
feasible and, if not, then on the second payroll date following the last date of
employment.

 

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(iii)          Notwithstanding anything to the contrary set forth elsewhere in
this Agreement, the Executive may not terminate his employment with the Company
for Good Reason pursuant to this Section 4(c), and shall not be considered to
have done so for any purpose of this Agreement, unless (A) the Executive, within
60 days after the initial existence of the act or failure to act by the Company
that constitutes “Good Reason” within the meaning of this Agreement, provides
the Company with written notice that describes, in particular detail, the act or
failure to act that the Executive believes to constitute “Good Reason” and
identifies the particular event specified in the definition of “Good Reason” on
Exhibit A that the Executive contends is applicable to such act or failure to
act; (B) the Company, within 30 days after its receipt of such notice, fails or
refuses to rescind such act or remedy such failure to act so as to eliminate
“Good Reason” for the termination by the Executive of the Executive’s employment
relationship with the Company; and (C) the Executive actually resigns from the
employ of the Company on or before that date that is 12 months after the initial
existence of the act or failure to act by the Company that constitutes “Good
Reason.” If the requirements of the immediately preceding sentence are not fully
satisfied on a timely basis, then the resignation by the Executive from the
employ of the Company shall not be deemed to have been for “Good Reason,” the
Executive shall not be entitled to any of the benefits to which the Executive
would have been entitled if the Executive had resigned from the employ of the
Company for “Good Reason,” and the Company shall not be required to pay any
amount or provide any benefit that would otherwise have been due to the
Executive under this Section 4(c) had the Executive resigned with “Good Reason.”

 

(d)           Other Termination by the Executive. The Executive may terminate
the Executive’s employment for any reason other than for Good Reason upon 30
days’ prior written notice of termination to the Company. In the event the
Executive shall terminate the Executive’s employment pursuant to this Section
4(d), the Company shall not have any further obligation or liability under this
Agreement, except for the Accrued Obligations, which shall be paid on the first
payroll date following last date of employment to the extent administratively
feasible and if not, then on the second payroll date following the last date of
employment. The Company shall not have the right following Executive’s provision
of notice to terminate the Executive’s employment prior to the end of the notice
period unless the Company pays the Executive for the full notice period.

 

(e)           Base Salary Continuation. The Base Salary continuation set forth
in Section 4(c) above shall be intended either (i) to satisfy the safe harbor
set forth in the Treas. Regs. 1.409A-1(b)(9)(iii), or (ii) be treated as a
Short-term Deferral as that term is defined Treas. Regs. 1.409A-1(b)(4). To the
extent such continuation payments exceed the applicable safe harbor amount or do
not constitute a Short-term Deferral, the excess amount shall be treated as
deferred compensation under Code section 409A and as such shall be payable
pursuant to the following schedule: such excess amount shall be paid via
standard payroll in periodic installments in accordance with the Company’s usual
practice for its senior executives. Solely for purposes of Code section 409A,
each installment payment is considered a separate payment. Notwithstanding any
provision in this Agreement to the contrary, in the event that the Executive is
a “specified employee” as defined in Code section 409A, any continuation
payment, continuation benefits or other amounts payable under this Agreement
that would be subject to the special rule regarding payments to “specified
employees” under Section 409A(a)(2)(B) of the Code shall not be paid before the
expiration of a period of six months following the date of the Executive’s
termination of employment or before the date of the Executive’s death, if
earlier.

 

(f)            Parachute Provisions. In the event a Change of Control occurs,
the Company will engage an independent accounting firm (the “Accounting Firm”)
at its expense to determine whether the Executive received, is entitled to
receive or will become entitled to receive any benefits or payments in the
nature of compensation (within the meaning of Section 280G(b)(2) of the Code)
(the “Total Payments”), and whether the Total Payments will be subject to the
tax (the “Excise Tax”) imposed by Section 4999 of the Code. If the Total
Payments will be subject to the Excise Tax, the aggregate present value of the
Total Payments shall be reduced (but not below $1) if reducing the Total
Payments will provide the Executive with a greater net after-tax amount than
would be the case if no reduction was made. Any reduction shall be effected in
accordance with Section 409A of the Code.

 

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5.             Restrictive Covenants. Concurrently with the execution hereof,
and as a condition of employment, the Executive shall execute and deliver an
Employee Confidential Disclosure, Invention Assignment, Non-Competition,
Non-Solicitation and Non-Interference Agreement (the “Confidentiality and
Invention Assignment Agreement”).

 

6.             No Conflicts. The Executive represents and warrants that the
Executive is not party to any agreement, contract or understanding, whether of
employment, consultancy or otherwise, in conflict with this Agreement or which
would in any way restrict or prohibit the Executive from undertaking or
performing services for the Company or otherwise from entering into or
performing this Agreement or the Confidentiality and Invention Assignment
Agreement.

 

7.             Full Agreement. This Agreement and the Confidentiality and
Invention Assignment Agreement (including the Exhibits hereto), constitute the
entire agreement of the parties concerning its subject matter and supersedes all
other oral or written understandings, discussions, and agreements, but shall not
supersede, or otherwise be deemed to terminate, any confidentiality agreements,
non-disclosure obligations or restrictive covenants in favor of the Company in
effect immediately prior to the Commencement Date. This Agreement may be
modified only in a writing signed by both parties. The Executive acknowledges
that she has read and fully understand the contents of this Agreement and the
Confidentiality and Invention Assignment Agreement and is executing it after
having an opportunity to consult with legal counsel.

 

8.             Amendments. Any amendment to this Agreement shall be made in
writing and signed by the parties hereto.

 

9.             Enforceability. If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner necessary to
render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law as if such provision had been
originally incorporated herein as so modified or restricted or as if such
provision had not been originally incorporated herein, as the case may be.

 

10.          Construction. This Agreement shall be construed and interpreted in
accordance with the internal laws of the Commonwealth of Pennsylvania.

 

11.          Assignment. 

 

(a)           By the Company. The rights and obligations of the Company under
this Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company. This Agreement may be assigned by the
Company without the consent of the Executive.

 

(b)           By the Executive. This Agreement and the obligations created
hereunder may not be assigned by the Executive, but all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive’s
heirs, devisees, legatees, executors, administrators and personal
representatives. Any attempted assignment in violation of this Section 11(b)
shall be null and void.

 

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12.          Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when mailed by
certified mail, return receipt requested, or delivered by a national overnight
delivery service addressed to the intended recipient as follows:

 

  If to the Company:       Annovis Bio, Inc.
1055 Westlakes Drive
Berwyn, PA  19312
Attention:  Chairman of the Board       If to the Executive:       Jeffrey B.
McGroarty
360 Hilltop Road
Paoli, PA  19301

 

Any party may from time to time change its address for the purpose of notices to
that party by a similar notice specifying a new address, but no such change
shall be deemed to have been given until it is actually received by the party
sought to be charged with its contents.

 

13.          Waivers. No claim or right arising out of a breach or default under
this Agreement shall be discharged in whole or in part by a waiver of that claim
or right unless the waiver is supported by consideration and is in writing and
executed by the aggrieved party hereto or such party’s duly authorized agent. A
waiver by any party hereto of a breach or default by the other party hereto of
any provision of this Agreement shall not be deemed a waiver of future
compliance therewith, and such provisions shall remain in full force and effect.

 

14.          Survival of Covenants. The provisions of Section 4 through this
Section 14 shall survive the termination of the Executive’s employment shall
continue in effect thereafter.

 

(Signature page follows.)

 

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IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
date first above written.

 

  ANNOVIS BIO, INC.         By:  /s/ Maria L. Maccecchini    

Name: Maria L. Maccecchini

Title: President and CEO

          /s/ Jeffrey B. McGroarty     Jeffrey B. McGroarty

 

 

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EXHIBIT A

 

Certain Definitions

 

The following terms have the meaning set forth below wherever they are used in
this Agreement:

 

“Cause” for the Company (or a successor, if appropriate) to terminate the
Executive’s employment will exist upon the occurrence of any of the following
events: (i) the Executive’s continued failure to substantially perform the
Executive’s duties and obligations to the Company, including but not limited to
any material breach of this Agreement or any material violation of the Company’s
written policies or rules, and failure to cure the same within ten business days
after being notified by the Board; (ii) the Executive’s having committed willful
fraud or willful misconduct, in any such case which is materially injurious to
the Company; (iii) the Executive’s having been convicted of a felony involving
moral turpitude that results in material harm to the standing or reputation of
the Company; or (iv) the Executive’s material breach of the terms of the
Confidentiality and Invention Assignment Agreement.

 

“Change of Control” shall have the meaning set forth in the Equity Incentive
Plan.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commencement Date” means March 24, 2020.

 

“Disability” means an illness, incapacity or a mental or physical condition that
renders the Executive unable or incompetent, with or without a reasonable
accommodation, to carry out the job responsibilities that the Executive held or
the tasks that the Executive was assigned at the time the disability commenced
for a period of 90 consecutive days, or 180 non-consecutive days in any rolling
12-month period.

 

“Equity Incentive Plan” shall mean the Company’s 2020 Equity Incentive Plan, as
amended and then in effect.

 

“Fully Diluted Equity” means the issued and outstanding shares of the Company’s
Common Stock, determined on a fully-diluted, as-converted basis as of the date
of grant of the applicable stock options, inclusive of all allocated and
unallocated shares authorized to be issued under the Equity Incentive Plan.

 

“Good Reason” for the Executive to resign from the employ of the Company will
exist upon the occurrence of any of the following events, subject to compliance
with the other provisions of Section 4(c): (a) a material reduction in the Base
Salary, as then in effect; (b) a material reduction of the Executive’s
authority, position, responsibilities or duties; (c) the Company’s material
breach of this Agreement; or (d) a relocation at the request of the Board of the
Executive’s principal workplace by more than 50 miles from the Company’s
principal offices as of the Commencement Date; provided, however, that (i)
clause (a) shall not apply if such reduction is part of a Company-wide reduction
in compensation and/or benefits for all of its senior executives, and (ii)
following a Change of Control, a reduction in authority, position,
responsibilities or duties solely by virtue of the Company being acquired and
becoming part of a larger entity or operated as a subsidiary shall not
constitute Good Reason.

 

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EXHIBIT B

 

Equity Incentive Awards

 

Pursuant to the terms and conditions of the Equity Incentive Plan and an
appropriate grant agreement to be executed by the Executive and the Company, the
Executive shall be granted the following equity incentive awards in such forms
as shall be determined by the Board, upon consultation with the Executive: (a)
on or before April 30, 2020, an equity incentive award of 300,000 shares of the
Company’s Common Stock, of which 250,000 shares shall be vested in full upon
grant and the remaining 50,000 shares shall vest on April 30, 2021 (the “2021
Vesting Date”); provided, however, that if a Change of Control shall occur prior
to the 2021 Vesting Date, such award shall vest in full upon the closing of the
Change of Control. Such grant shall be made on or before April 30, 2020; and (b)
on or after January 1, 2021 and on or before April 30, 2021, an equity incentive
award of 30,396 shares of the Company’s Common Stock, all of which shall be
vested in full upon grant.

 

In the event the Company raises additional capital prior to the 2021 Vesting
Date through the sale of its securities and the Board determines in its sole
discretion that the Executive’s performance warrants the grant of additional
equity incentive awards, the Board shall grant to the Executive an additional
equity incentive award of 165,199 shares of the Company’s Common Stock, subject
to approval by the stockholders of the Company of an increase in the shares
available under the Equity Incentive Plan. Such additional equity incentive
award shall: (a) be granted in accordance with the terms and conditions of the
Equity Incentive Plan and an appropriate grant agreement to be executed by the
Executive and the Company, and (b) vest in two equal installments on March 31,
2022 and March 31, 2023, respectively, subject to accelerated vesting of such
additional award upon a Change of Control of the Company.

 

 

 

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EXHIBIT C

 

Release of Claims

 

1.             Termination of Employment. ________________ (“Executive”) hereby
agrees and recognizes that, as of _______, 20__, Executive’s employment
relationship with Annovis Bio, Inc., a Delaware corporation (the “Company”),
will be permanently and irrevocably severed.

 

2.             Release of Claims. In consideration of the payments and benefits
described in Section 4(d) and Section 4(e) of the employment agreement (the
“Employment Agreement”), effective _______, 2020, by and between Executive and
the Company, to which Executive agrees Executive is not entitled until and
unless Executive executes and does not revoke this Release, Executive, for and
on behalf of himself and his heirs, executors, administrators and assigns,
hereby waives and releases any and all complaints, claims, suits, controversies,
and actions, whether known or unknown, suspected or claimed, which Executive, or
any of the Executive’s heirs, executors, administrators or assigns ever had, now
has or may have against the Company and/or its respective predecessors,
successors, past or present parents or subsidiaries, affiliates, investors,
branches or related entities (collectively, including the Company, the
“Entities”) and/or the Entities’ past or present stockholders, insurers,
assigns, trustees, directors, officers, limited and general partners, managers,
joint venturers, members, employees or agents in their respective capacities as
such (collectively with the Entities, the “Releasees”) by reason of
circumstances, acts or omissions which have occurred on or prior to the date
that this Release becomes effective, including, without limitation, (a) any
complaint, charge or cause of action arising under (i) federal, state or local
laws pertaining to employment or termination of employment, including the Age
Discrimination in Employment Act of 1967 (the “ADEA,” a law which prohibits
discrimination on the basis of age), the National Labor Relations Act, as
amended, the Civil Rights Act of 1991, as amended, the Americans with
Disabilities Act of 1990, as amended, Title VII of the Civil Rights Act of 1964,
as amended, the Equal Pay Act of 1963, as amended, the Family and Medical Leave
Act of 1993, as amended, the Worker Adjustment Retraining and Notification Act,
as amended, the Executive Retirement Income Security Act of 1974, as amended,
any applicable Executive Order Programs, the Fair Labor Standards Act, or their
state or local counterparts (including, but not limited to, the Pennsylvania
Human Relations Act); (ii) any other federal, state or local civil or human
rights law; (iii) any other local, state, or federal law, regulation or
ordinance; (iv) any public policy, contract and/or quasi-contract or tort
(including, but not limited to, claims of breach of the Employment Agreement, an
expressed or implied contract, tortious interference with contract or
prospective business advantage, breach of the covenant of good faith and fair
dealing, promissory estoppel, detrimental reliance, invasion of privacy,
nonphysical injury, personal injury or sickness or any other harm, wrongful or
retaliatory discharge, fraud, defamation, slander, libel, false imprisonment,
negligent or intentional infliction of emotional distress); (v) common law; or
(vi) any policies, practices or procedures of the Company; or (b) any claim for
costs, fees, or other expenses, including attorneys’ fees incurred in these
matters (the “Released Claims”). By signing this Release, Executive acknowledges
that she intends to waive and release any rights known or unknown that she may
have against the Releasees under these and any other laws. Notwithstanding the
foregoing, Executive does not release, discharge or waive: any rights to
indemnification that she may have under the certificate of incorporation, the
by-laws or equivalent governing documents of the Company or its subsidiaries or
affiliates, the laws of the State of Delaware or any other state of which any
such subsidiary or affiliate is a domiciliary, the Employment Agreement or any
indemnification agreement between Executive and the Company; any rights to
insurance coverage under any directors’ and officers’ personal liability
insurance or fiduciary insurance policy; any rights she may have in his capacity
as a stockholder of the Company; any rights she may have to enforce the vested
terms of any equity or other incentive agreement previously provided to her; any
rights she may have to severance benefits and payment of Accrued Obligations
under the Employment Agreement (the “Excluded Claims”). The Executive
acknowledges that she has made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by this Section 1.

 

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3.             Proceedings. Executive acknowledges that she has not filed any
complaint, charge, claim or proceeding, if any, or assigned to any other person
the right to bring any such complaint, charge, claim, or proceeding, relating to
the Released Claims against any of the Releasees before any local, state or
federal agency, court or other body (each individually a “Proceeding”).
Executive (i) acknowledges that she will not initiate or cause to be initiated
on his behalf any Proceeding and will not participate in any Proceeding, in each
case, except as required by law and (ii) waives any right she may have to
benefit in any manner from any relief (whether monetary or otherwise) arising
out of any Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission (the “EEOC”). Further, Executive understands
that, by executing this Release, she will be limiting the availability of
certain remedies that she may have against the Releasees and limiting also his
ability to pursue certain claims against the Releasees. Notwithstanding the
above, nothing in Section 1 of this Release shall prevent Executive from
(i) initiating or causing to be initiated on the Executive’s behalf any
complaint, charge, claim or proceeding against any Releasee before any local,
state or federal agency, court or other body challenging the validity of the
waiver of the Executive’s claims under the ADEA contained in Section 1 of this
Release (but no other portion of such waiver), (ii) initiating or participating
in an investigation or proceeding conducted by the EEOC or (iii) reporting
possible violations of federal, state or local law, ordinance or regulation to
any governmental agency or entity, including, but not limited to, the Department
of Justice, the U.S. Securities and Exchange Commission (the “SEC”), the
Congress and any agency Inspector General, or otherwise taking action or making
disclosures that are protected under the whistleblower provisions of any
federal, state or local law, ordinance or regulation, including, but not limited
to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as
amended; or (iv) receiving a monetary award for information provided to the SEC
pursuant to Rule 21F-17 promulgated under the Securities Exchange Act of 1934,
as amended. The Executive acknowledges and agrees that the Executive’s
separation from employment with the Company in compliance with the terms of the
Employment Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

 

4.             Time to Consider. Executive acknowledges that she has been
advised that she has [twenty-one (21)]/[forty-five (45)]1 days from the date of
receipt of this Release to consider all the provisions of this Release and,
further, that if Executive signs this Release prior to the expiration of such
[twenty-one (21)]/[forty-five (45)] day period, she does hereby knowingly and
voluntarily waive said given [twenty-one (21)]/[forty-five (45)] day period.
EXECUTIVE FURTHER ACKNOWLEDGES THAT SHE HAS READ THIS RELEASE CAREFULLY, HAS
BEEN ADVISED BY THE COMPANY TO, AND HAS IN FACT, CONSULTED AN ATTORNEY, AND
FULLY UNDERSTANDS THAT BY SIGNING BELOW SHE IS GIVING UP CERTAIN RIGHTS WHICH
SHE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED
IN SECTION 1 OF THIS RELEASE AND THE OTHER PROVISIONS HEREOF. EXECUTIVE
ACKNOWLEDGES THAT SHE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER
TO SIGN THIS RELEASE, AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.
[EXECUTIVE ALSO ACKNOWLEDGES THAT SHE HAS RECEIVED ALL INFORMATION REQUIRED TO
BE DISCLOSED IN CONNECTION WITH AN EXIT INCENTIVE OR OTHER EMPLOYMENT
TERMINATION PROGRAM.]

 

5.             Revocation. Executive hereby acknowledges and understands that
Executive shall have seven (7) days from the date of his execution of this
Release to revoke this Release (including, without limitation, any and all
claims arising under the ADEA) and that neither the Company nor any other person
is obligated to provide any benefits to Executive pursuant to Section 4(d) or
Section 4(e) of the Employment Agreement until eight (8) days have passed since
Executive’s signing of this Release without Executive having revoked this
Release, in which event the Company immediately shall arrange and/or pay for any
such benefits otherwise attributable to said eight-(8) day period, consistent
with the terms of the Employment Agreement. If Executive revokes this Release,
Executive will be deemed not to have accepted the terms of this Release, no
action or forbearance of action will be required of the Company under any
section of this Release, and Executive shall not be entitled to receive any
portion of the severance compensation and benefits which are conditioned on the
delivery of this Release.

 

6.             No Admission. This Release does not constitute an admission of
liability or wrongdoing of any kind by Executive or the Company.

 

 

 

1 NTD: To be selected based on whether applicable termination was “in connection
with an exit incentive or other employment termination program” (as such phrase
is defined in the Age Discrimination in Employment Act of 1967).

C-2

 

 

7.             Confidentiality. Executive agrees that Executive will not
communicate or disclose the terms of this Release to any persons with the
exception of members of Executive’s immediate family and Executive’s attorney
and financial advisor, or as permitted by Section 3 above.

 

8.             Return of Company Property. Executive represents that all
equipment and other property of the Company, including any documents and files,
whether electronically stored or maintained in hard copy, have been returned to
the Company, and that Executive has not retained any copies of the same.

 

9.             Non-Disparagement. Executive will not disparage any Releasee or
otherwise take any action which could reasonably be expected to adversely affect
the personal or professional reputation of any Releasee. The Company’s
directors, officers and senior executives shall not disparage or otherwise take
any action which could reasonably be expected to adversely affect the personal
or professional reputation of the Executive.

 

10.           Post-Employment Obligations. Executive reaffirms that she will
comply with all of his post-employment obligations as set forth in Section 5 of
the Employment Agreement.

 

11.           Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any and all prior representations,
agreements, written or oral, expressed or implied, except for Section 5 of the
Employment Agreement, which survives the termination of Executive’s employment
and is incorporated herein by reference, and except for any agreements with
respect to Executive’s options to acquire Common Stock of the Company. This
Agreement may not be modified or amended other than by an agreement in writing
signed by an officer of the Company.

 

12.           Acknowledgement. Executive acknowledges and agrees that,
subsequent to the termination of Executive’s employment, Executive shall not be
eligible for any payments from the Company or Company-paid benefits, except as
expressly set forth in this Agreement. Executive also acknowledges and agrees
that Executive has been paid for all time worked and has received all other
compensation owed to her.

 

13.           Assignment. This Agreement shall be binding upon and be for the
benefit of the parties as well as Executive’s heirs and the Company’s successors
and assigns.

 

14.           General Provisions. A failure of any of the Releasees to insist on
strict compliance with any provision of this Release shall not be deemed a
waiver of such provision or any other provision hereof. If any provision of this
Release is determined to be so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable, and in the event
that any provision is determined to be entirely unenforceable, such provision
shall be deemed severable, such that all other provisions of this Release shall
remain valid and binding upon Executive and the Releasees.

 

15.           Governing Law. The validity, interpretations, construction and
performance of this Release shall be governed by the laws of the Commonwealth of
Pennsylvania without giving effect to conflict of laws principles.

 

IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand as of the day
and year set forth opposite his signature below.

 

 

      Date   Jeffrey B. McGroarty

 

C-3