Exhibit 10.1

   
Hana Biosciences, Inc.
400 Oyster Point Boulevard, Suite 215
South San Francisco, CA 94080
         
Ph. (650) 588-6404
Fax. (650) 588-2787
URL: www.hanabiosciences.com

 

December 16, 2005

VIA FED-EX

Russell Skibsted
330 Alameda de las Pulgas
Redwood City, CA 94062

Dear Russell:

As we have discussed, this letter agreement (the “Agreement”) sets forth the
substance of the terms of your separation from Hana Biosciences, Inc. (the
“Company”).

 
1.
Separation from Employment. The final date of your employment with the Company
will be December 31, 2005 (the “Termination Date”). After the Termination Date,
you and the Company agree that you will provide consulting services to the
Company, as described in Paragraph 4 below. As consideration for entering into
this Agreement, the Company will pay you $5,000 on the Company’s first regular
pay day in January 2006, which payment shall be subject to applicable income tax
withholding and other legally required deductions.

 
2.
Post-Termination Date Consulting. In accordance with Section 9(d)(i) of the your
Employment Agreement dated October 12, 2004 (the “Employment Agreement”), the
Company will continue to pay to you the annualized base salary stated in such
agreement for a period of one (1) year following the Termination Date, which
payments will be made in equal installments at the times of the Company’s
regular paydays. Such payments will be subject to applicable income tax
withholdings and other legally required deductions. As provided in the
Employment Agreement, however, such payments may be offset against any amounts
otherwise received by you from any employment during the one (1) year period
following the termination of employment, provided, however, that in no event
shall the Company have the right to recover or offset any amounts paid to you
pursuant to Section 9(d)(i) of the Employment Agreement for any period prior to
the commencement of new employment. You agree to send monthly correspondence (by
email transmission to the attention of John P. Iparraguirre, or such other
representative as the Company may hereafter indicate) attesting to the Company
your then-current employment status and all amounts earned from any such
employment.

In addition, consistent with Section 9(d)(i) of the Employment Agreement,
100,000 shares subject to the stock options granted to you pursuant to that
certain Stock Option Agreement dated July 25, 2005 between you and the Company
shall be deemed vested as of the Termination Date and the remaining 50,000
shares subject to such stock option shall expire and terminate. The vested
portion of such stock options shall remain exercisable for a period of 90 days
following the Termination Date.
 

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3.
Accrued Salary and Vacation. On the Termination Date, the Company will pay you
all accrued salary, and all accrued and unused vacation, earned through the
Termination Date, subject to standard payroll deductions and withholdings. You
are entitled to these payments by law. In addition, on the Company’s first
regular pay day in January 2006, in addition to the payment described above in
Paragraph 1, the Company will pay you $20,000, representing a bonus for 2005,
which payment is also subject to standard payroll deductions and withholdings.

 
4.
Consulting Services. Following the Termination Date, you agree to be available
to the Company, on an as-needed basis and as mutually agreed to between the
Company and you, to provide consulting services in the areas of corporate
finance and investor relations. Any such services that you provide to the
Company after the Termination Date will not be as an employee of the Company,
but as an independent contractor.

 
5.
Health Insurance. After the Termination Date, to the extent provided by the
state Cal-COBRA law and by the Company’s current group health insurance
policies, you will be eligible to continue your group health insurance benefits
at your own expense.

 
6.
Other Compensation or Benefits. Except as expressly provided in this Agreement,
you will not receive any additional benefits after the Termination Date, with
the sole exception: a) of any benefit to which you have a vested right under the
terms of a written, ERISA-qualified benefit plan (e.g., 401(k) plan) , b) any
and all rights to indemnification pursuant to California law and the Company’s
Certificate of Incorporation and Bylaws, and c) rights as an insured under any
Company insurance policy, including but not limited to, Directors and Officers
liability insurance policy.

 
7.
Employment-Related Expense Reimbursements. Within thirty (30) days after the end
of the Termination Date, you shall submit your final, documented expense
reimbursement statement reflecting all business expenses you incurred in
connection with your employment through the Termination Date for which you seek
reimbursement. The Company will reimburse you for these expenses pursuant to its
regular business practice.

 
8.
Return of Company Property. You agree to return to the Company, on or before the
end of the Termination Period, all documents of the Company (and all copies or
reproductions thereof) and all other Company property in your possession or
control, including, but not limited to, all files, notes, memoranda,
correspondence, agreements, drawings, records, plans, forecasts, reports,
proposals, studies, analyses, financial information, operational information,
personnel information, investor information, research and development
information, computer-recorded information, tangible property and equipment
(including, but not limited to, computers and cellular phones), credit cards,
entry cards, identification badges and keys; and any materials or medium of any
kind which contain or embody any proprietary or confidential information of any
Company (and all reproductions thereof, in whole or in part); provided, however,
you may continue to use the Company-issued IBM ThinkPad notebook computer and
Blackberry handheld device until the earlier of (a) the date you commencement
employment with a new employer, or (b) December 31, 2006, at which date you
agree to return such devices to the Company. You agree and acknowledge that,
following the Termination Date, you will be responsible for establishing, at
your own expense, wireless service plan(s) relating to such devices.

 
 
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9.
Proprietary Information Obligations. You will not make any use or disclosure of
Company proprietary or confidential information (whether obtained or developed
during any employment, consulting or other professional relationship with any
Company affiliate) without written permission. In addition, you hereby assign to
the Company, to the fullest extent permitted by law, all right, title, and
interest in all inventions, techniques, processes, materials, and other
intellectual property developed by you, alone or with others, in the course of
your employment with the Company. This Agreement does not apply to an invention
which qualifies fully as a nonassignable invention under Section 2870 of the
California Labor Code. By your signature below, you acknowledge that you have
reviewed the Limited Exclusion Notification attached hereto as Exhibit A. You
further acknowledge that all original works of authorship which are made by you
(solely or jointly with others) within the scope of your employment with the
Company and which are protectable by copyright are “works made for hire,”
pursuant to United States Copyright Act (17 U.S.C., Section 101).

 
10.
Confidentiality. The provisions of this Agreement (with the exception of the
fact of your employment) will be held in strictest confidence by you and the
Company and will not be publicized or disclosed in any manner whatsoever;
provided, however, that: (a) you may disclose this Agreement in confidence to
your immediate family; (b) the parties may disclose this Agreement in confidence
to their respective attorneys, accountants, auditors, tax preparers, and
financial advisors; (c) the Company may disclose this Agreement to investors and
as necessary to fulfill standard or legally required corporate reporting or
disclosure requirements, including applicable provisions of the federal
securities laws; and (d) the parties may disclose this Agreement insofar as such
disclosure may be necessary to enforce its terms or as otherwise required by
law. In particular, and without limitation, you agree not to disclose the terms
of this Agreement to any current or former employee of the Company.

 
11.
Nondisparagement. You agree not to disparage the Company and its officers,
directors, members, partners, managers, employees, shareholders, affiliates, and
agents, in any manner likely to be harmful to them or their business, business
reputation or personal reputation. The Company agrees not to disparage you in
any manner likely to be harmful to you or your business reputation.
Notwithstanding the foregoing, both you and the Company may respond accurately
and fully to any question, inquiry or request for information when required by
legal process.

 
12.
Acts Necessary To Effect This Agreement. You and the Company agree to execute
any instruments or agreements (or amendments thereto), or perform any other acts
that are or may become, necessary to effect and carry out the transactions
contemplated by this Agreement.

 
13.
Release of Claims. Except as otherwise set forth in this Agreement, in exchange
for the consideration under this Agreement to which you would not otherwise be
entitled, you hereby generally and completely release the Company and its
directors, officers, employees, shareholders, attorneys, insurers, affiliates
and assigns, from any and all claims, liabilities and obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring at any time prior to or contemporaneous with
your execution of this Agreement. This general release includes, but is not
limited to: (a) all claims arising out of or in any way related to your
employment or other professional relationship with the Company or the
termination of that employment or relationship; (b) all claims related to your
compensation or benefits, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, or stock options;
(c) all claims for breach of contract, wrongful termination, and breach of the
implied covenant of good faith and fair dealing; (d) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (e) all federal, state, and local statutory claims, including
claims for discrimination, harassment, retaliation, attorneys’ fees, or other
claims arising under the federal Civil Rights Act of 1964 (as amended), the
federal Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act (“ADEA”) (as amended), and the California Fair
Employment and Housing Act (as amended). Nothing in this release shall apply to
any claims by you against the Company relating to your vested rights to Company
stock options, 401(k) benefits or any benefits set forth in Paragraph 6.

 
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14.
ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and
releasing any rights you may have under the ADEA, and that the consideration
given for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which you were already entitled. You further
acknowledge that you have been advised that: (a) your waiver and release do not
apply to any rights or claims that may arise after the date you sign this
Agreement; (b) you should consult with an attorney prior to signing this
Agreement (although you may choose not to do so); (c) you have twenty-one (21)
days to consider this Agreement (although you may choose voluntarily to sign
this Agreement earlier); (d) you have seven (7) days following the date you sign
this Agreement to revoke your consent to the Agreement by providing written
notice of your revocation to me; and (e) this Agreement will not be effective
until the date upon which the revocation period has expired, which will be the
eighth day after the date you sign this Agreement (the “Effective Date”).

 
15.
Section 1542 Waiver. In giving the release set forth in this Agreement, which
includes claims which may be unknown to you at present, you acknowledge that you
have read and understand Section 1542 of the California Civil Code which 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 hereby expressly waive and relinquish all rights and benefits under that
section and any law or legal principle of similar effect in any jurisdiction
with respect to your release of claims herein, including but not limited to the
release of unknown and unsuspected claims.
 

 
16.
Section 1541 Notice. This Agreement is in full accord, satisfaction, and
discharge of doubtful and disputed claims and this Agreement has been executed
with the express intention of effectuating the legal consequences provided for
in Section 1541 of the California Civil Code, i.e., the extinguishment of all
obligations as described herein. I have had the opportunity to have this section
explained to me by legal counsel and I fully understand it. Section 1541
provides as follows:

An obligation is extinguished by a release therefrom given to the debtor by the
creditor, upon a new consideration, or in writing, with or without new
consideration.

 
17.
No Admissions. You understand and agree that the promises and payments in
consideration of this Agreement shall not be construed to be an admission of any
liability or obligation by any Company Affiliate to you or to any other person,
and that the Company make no such admission.

 
18.
Arbitration. To ensure the timely and economical resolution of any disputes
which may arise under this Agreement, you and the Company agree that any and all
claims, disputes or controversies of any nature whatsoever arising from or
regarding the interpretation, performance, negotiation, execution, enforcement
or breach of this Agreement shall be resolved, to the fullest extent allowed by
law, by confidential, final and binding arbitration conducted before a single
arbitrator with Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in
San Francisco, California, under the then-applicable JAMS rules. The
parties acknowledge that by agreeing to this arbitration procedure, they waive
the right to resolve any such dispute through a trial by jury, judge or
administrative proceeding. The Company shall bear JAMS’ arbitration fees in
excess of the amount of court fees that would be required if the dispute were
decided in a court of law. The arbitrator shall: (a) have the authority to
compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. The arbitrator, and not a court, shall
also be authorized to determine whether the provisions of this paragraph apply
to a dispute, controversy or claim sought to be resolved in accordance with
these arbitration procedures. Nothing in this Agreement is intended to prevent
either you or the Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.

 
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19.
Miscellaneous. 

 

(a)
Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect, in whole or in part, such invalidity, illegality
or unenforceability will not affect any other provision, and such invalid,
illegal or unenforceable provision will be reformed, construed and enforced so
as to render it valid, legal, and enforceable consistent with the intent of the
parties insofar as possible under applicable law.

 

(b)
Waiver. Any waiver of any breach of any provision of this Agreement shall be in
writing, and the waiving party shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.

 

(c)
Entire Agreement. This Agreement, including its exhibits, constitutes the final,
complete, and exclusive embodiment of the entire agreement between you and the
Company regarding the subject matter hereof and it supersedes any prior
agreement, promise, or representation, written or otherwise, between you and any
of the Company with regard to this subject matter. To the extent that the
provisions of this Agreement are inconsistent with the provisions of the other
agreements specified herein, this Agreement shall govern; provided, however,
that to the extent not inconsistent with this Agreement, the other agreements
shall continue in full force and effect. This Agreement is entered into without
reliance on any agreement, promise, or representation, written or oral, other
than those expressly contained or incorporated herein, and it cannot be modified
or amended except in a written agreement signed by you and me.

 

(d)
Counterparts. This Agreement may be executed in separate counterparts, any one
of which need not contain signatures of more than one party, but all of which
taken together shall constitute one and the same Agreement. Signatures
transmitted via facsimile shall be deemed the equivalent of originals.

 

(e)
Headings and Construction. The headings of the paragraphs hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof or to
affect the meaning thereof. For purposes of construction of this Agreement, any
ambiguities shall not be construed against either party as the drafter.

 

(f)
Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by you, the Company and your and its respective
successors, assigns, heirs, executors and administrators, except that you may
not assign any of your duties or rights hereunder without the written consent of
the Company, which shall not be unreasonably withheld.

 
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(g)
Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the law of the State of
California as applied to contracts made and to be performed entirely within the
State of California.

 
If this Agreement is acceptable to you, please sign this Agreement and return
the originals to me on or before December 31, 2005 days after the date you
receive this Agreement. The offer contained in this Agreement will automatically
expire if the Company does not receive the executed Agreement and Amendment from
you by that date.
 
I wish you the best in your future endeavors.
 
Sincerely,
 
Hana Biosciences   
 

          By: /s/ Mark J. Ahn        

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Mark J. Ahn, Ph.D.
President & Chief Executive Officer
   

 
 
Exhibit A - Limited Exclusion Notification
 
Accepted And Agreed:
 

       
/s/ Russell L. Skibsted
     

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Russell L. Skibsted            
December 28, 2005 
     

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Date
     

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