Exhibit 10.1
SEPARATION AND GENERAL RELEASE AGREEMENT
     This Separation and General Release Agreement (this “Agreement”) is being
entered into as of this 29 day of June 2007 (the “Date of this Agreement”), by
and between IsoTis, Inc., a Delaware corporation (the “Company”), and Kathryn
Liljestrand, an individual (“Employee”) (each of the Company and Employee is
sometimes hereinafter referred to individually as a “Party” and collectively as
the “Parties”), with respect to the following facts.
     WHEREAS, Employee and IsoTis SA were the parties to that certain Employment
Agreement (the “2006 Employment Agreement”) dated as of May 17, 2006, and
Employee’s position with IsoTis SA was Vice President of Sales.
     WHEREAS, the Company acquired IsoTis SA in or about January 2007.
     WHEREAS, Employee and the Company are the parties to that certain
Employment Agreement dated as of January 31, 2007, as amended by that certain
Amendment to Employment Agreement dated as of February 22, 2007 (the
“Amendment”) (collectively, the “2007 Employment Agreement” and with the
superseded 2006 Employment Agreement, the “Employment Agreements”).
     WHEREAS, Employee is currently employed by the Company as Vice President of
Marketing (the “Position”).
     WHEREAS, the Parties wish to terminate their employment relationship
subject to the terms and conditions set forth below.
     WHEREFORE in consideration of the foregoing premises and the terms and
conditions set forth below, the Parties agree as follows:
     1. Termination.
          a. Termination Date. Employee hereby resigns from the Position and her
employment with the Company as of July 31, 2007 (the “Termination Date”);
Employee shall continue to receive salary at an annual rate of $182,875 (the
“Salary”) through the Termination Date. Between the Date of this Agreement and
July 31, 2007, Employee shall not report to work, unless requested to do so, but
shall be available by telephone during regular business hours, upon reasonable
request to assist in the transition of her responsibilities. Except as otherwise
provided for in this Agreement, the rights and obligations of Employee and the
Company under the Employment Agreements shall terminate on the Termination Date
and shall have no further force or effect after the Termination Date.
          b. In lieu of any compensation, benefits or severance under the
Employment Agreements, the Company and Employee agree as follows:

 

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               (1) Consistent with Section 5.7(b)(i) of the 2007 Employment
Agreement, on July 31, 2007, the Company shall pay to Employee $91,437.50, less
applicable withholding, which represents 50 percent of the Salary, as provided
in Section 5.7(b)(i) of the 2007 Employment Agreement;
               (2) Consistent with Section 5.7(b)(i) the 2007 Employment
Agreement, on July 31, 2007, the Company shall pay to Employee $18,228.25, less
applicable withholding, which represents 50 percent of the Average Annual Bonus;
               (3) Consistent with Section 5.7(b)(iii) of the Employment
Agreement, on July 31, 2007, the Company shall pay Employee, $17,394.12, less
applicable withholding, which represents 18 times the portion of the monthly
COBRA premium in effect as of the Termination equal Date equal to the difference
between such monthly COBRA premium and Employee’s monthly contribution towards
health care benefits immediately prior to the Termination Date;
               (4) Consistent with Section 5.7(b)(ii) of the 2007 Employment
Agreement, on July 31, 2007, 50 percent of any stock options or restricted stock
grants held by Employee that are unvested as of that date shall be vested, as
provided in Section 5.7(b)(ii) of the 2007 Employment Agreement;
               (5) In the event that there is a Change in Control, as defined in
Section 5.8 of the 2007 Employment Agreement, of the Company on or before
July 31, 2007, in lieu of the payments provided in Sections 1.b.(1) and (2), and
the vesting provided in Section 1.b.(4) below, Employee shall receive a payment
equal to the Salary plus the Average Annual bonus, and shall vest in all
unvested stock options or restricted stock. It is understood by the Parties that
the following does not constitute a Change in Control: (a) an announcement of a
proposed change in the membership of the Board of Directors that would
constitute a Change in Control under Section 5.8(a) of the 2007 Employment
Agreement, but which has not yet occurred; (b) an announcement of the proposed
acquisition of the voting securities of the Company that would constitute a
Change in Control under Section 5.8(b) of the 2007 Employment Agreement, but
which has not been closed; and/or (c) an announcement of an event that would
constitute a Change in Control under Section 5.8(c) of the 2007 Employment
Agreement if approved by the Company’s Stockholders, but which has not yet been
approved by the Stockholders.
          c. No Future Compensation or Benefits. Except as provided for in this
Agreement, Employee understands and agrees that she is giving up any right or
claim to further compensation from the Company, and that she has no further
rights, and the Company has no further obligations under the Employment
Agreements.
          d. Announcements. Employee and the Company agree that the Company will
release an internal announcement of Employee’s departure from the Company and
external announcements as required by law and/or as it deems appropriate for
business purposes on the Date of this Agreement or thereafter. With regard to
the circumstances of Employee’s departure, the announcements shall state that
Employee resigned her employment with the Company and her resignation was
accepted. To the extent required by law, the Company shall report the terms of
separation.

 

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     2. Releases by Employee.
          a. Employee Release. In exchange for the consideration set forth in
this Agreement, Employee does hereby release and forever discharge the “Company
Releasees” herein, consisting of the Company, its parent, subsidiary and
affiliate corporations, and each of their respective past and present parents,
subsidiaries, affiliates, associates, owners, members, stockholders,
predecessors, successors, assigns, employees, agents, directors, officers,
partners, representatives, lawyers, and all persons acting by, through, under,
or in concert with them, or any of them, of and from any and all manner of
claims or causes of action, in law or in equity, of any nature whatsoever, known
or unknown, fixed or contingent (hereinafter called “Claims”), that Employee now
has or may hereafter have against the Company Releasees by reason of any and all
acts, omissions, events or facts occurring or existing prior to the date hereof.
The Claims released hereunder include, without limitation, any alleged breach of
any express or implied agreement (including, without limitation, the Employment
Agreements); any alleged torts or other alleged legal restrictions relating to
Employee’s employment by the Company and the termination thereof; and any
alleged violation of any federal, state or local statute or ordinance including,
without limitation, Title VII of the Civil Rights Act of 1964, as amended, 42
USC Section 2000, et seq.; Americans with Disabilities Act, as amended, 42
U.S.C. § 12101 et seq.; Age Discrimination in Employment Act, as amended, 29 USC
Section 621, et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. §
701 et seq.; Civil Rights Act of 1866, and Civil Rights Act of 1991; 42 USC
Section 1981, et seq.; Equal Pay Act, as amended, 29 USC Section 206(d);
regulations of the Office of Federal Contract Compliance, 41 CFR 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.;
and the California Fair Employment and Housing Act, California Government Code
Section 12940, et seq. This release shall not apply to the Company’s obligations
under this Agreement or to the Company’s obligations under applicable law,
including, without limitation, California Labor Code Section 2802, to indemnify,
defend, and hold Employee harmless from and against any claims asserted by any
person or entity against Employee arising from or related to Employee’s
employment with the Company.
          b. Unknown Claims.
               Employee acknowledges that Employee is familiar with the
provisions of California Civil Code Section 1542, which provides as follows:
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release,
which, if known by him or her must have materially affected his or her
settlement with the debtor.”
Employee, being aware of said code section, hereby expressly waives any rights
Employee may have thereunder, as well as under any other statutes or common law
principles of similar effect.

 

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          c. Older Worker’s Benefit Protection Act.
     Employee agrees and expressly acknowledges that this Agreement includes a
waiver and release of all claims which she has or may have under the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq.
(“ADEA”). The following terms and conditions apply to and are part of the waiver
and release of the ADEA claims under this Agreement:
     (1) This paragraph, and this Agreement are written in a manner calculated
to be understood by Employee.
     (2) The waiver and release of claims under the ADEA contained in this
Agreement does not cover rights or claims that may arise after the date on which
she signs this Release.
     (3) The Agreement provides for consideration in addition to anything of
value to which Employee is already entitled.
     (4) Employee has been advised to consult an attorney before signing this
Agreement.
     (5) Employee has been granted twenty-one (21) days after she is presented
with this Agreement to decide whether or not to sign this Agreement. If she
executes this Agreement prior to the expiration of such period, Employee does so
voluntarily and after having had the opportunity to consult with an attorney,
and hereby waives the remainder of the twenty-one (21) day period.
     (6) Employee has the right to revoke this general release within seven
(7) days of signing this Agreement. In the event this general release is
revoked, Employee understands that this Agreement will be null and void, and she
will not be entitled to any compensation or benefits under this Agreement.
     Ifs he wishes to revoke this Agreement, Employee shall deliver written
notice stating his intent to revoke this Agreement to Pieter Wolters, President
and Chief Executive Officer, at the offices of the Company on or before 5:00
p.m. on the Seventh (7th) Day after the date on which she signs this Agreement.
          d. No Assignment. Employee represents and warrants to the Company
Releasees that there has been no assignment or other transfer of any interest in
any Claim that the Employee may have against the Company Releasees, or any of
them. Employee agrees to indemnify and hold harmless the Company Releasees from
any liability, claims, demands, damages, costs, expenses and attorneys’ fees
incurred as a result of any person asserting such assignment or transfer of any
right or claims under any such assignment or transfer from Employee.
          e. No Actions. Employee agrees that if Employee hereafter commences,
joins in, or in any manner seeks relief through any suit arising out of, based

 

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upon, or relating to any of the Claims released hereunder or in any manner
asserts against the Company Releasees any of the Claims released hereunder, then
Employee will pay to the Company Releasees against whom such claim(s) is
asserted, in addition to any other damages caused thereby, all attorneys’ fees
incurred by such Company Releasees in defending or otherwise responding to said
suit or Claim. Provided, however, that Employee shall not be obligated to pay
the Company Releasees’ attorney’s fees to the extent such fees are attributable
to claims under the Age Discrimination in Employment Act or a challenge to the
validity of the release of claims under the Age Discrimination in Employment Act
     3. No Admission. Employee and the Company further understand and agree that
neither the payment of money nor the execution of this Agreement, including the
release provided for in Section 2, shall constitute or be construed as an
admission of any liability whatsoever by either Party.
     4. Severability. The provisions of this Agreement are severable, and if any
part of this Agreement is found to be unenforceable, the other paragraphs (or
portions thereof) shall remain fully valid and enforceable.
     5. No Encouragement of Actions. Employee agrees that she will not assist
any person or entity in bringing or pursuing legal action against the Company,
its agents, successors, representatives, employees and related and/or affiliated
companies, based on events occurring prior to the Termination Date; provided,
however, that this Section 5 shall not apply to any legal action arising from or
related to this Agreement or to any conduct compelled by or pursuant to
applicable law, nor shall it prohibit, in any way, Employee from responding to a
subpoena or taking any other action required by law..
     6. No Disparagement By Employee. Employee shall not make, or cause to be
made, any untrue statements to any person or entity that disparage, are inimical
to, or damage the reputation of, the Company, its officers, directors,
employees, or agents; provided that, if a legitimate inquiry is made to
Employee, she may state that he formerly was associated with the Company,
identify her association and responsibilities and give the dates of her
association.
     7. No Disparagement by the Company. The Company shall not make, or cause to
be made any untrue statements to any person or entity that disparage, are
inimical to, or damage the reputation of Employee. Following Employee’s
departure from the Company, the Company shall instruct its executive employees
to advise any third parties requesting Employee by name that Employee is no
longer with the Company and to provide the appropriate contact information for
Employee.
     8. Confidential Information. Employee’s obligations under Section 6 of the
2007 Employment Agreement with respect to Confidential Information of the
Company shall remain in full force and effect and shall survive the termination
of the Employment Agreements.
     9. Company Property. Employee agrees to search his/her home, office and all
other storage areas for all property owned by the Company and to return all
Company equipment to the Company on or before the Termination Date.

 

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     10. Choice of Law and Venue. The Parties acknowledge and agree that this
Agreement shall be interpreted in accordance with California law. Any actions
arising out of or relating to this Agreement or Employee’s service with the
Company shall be filed in either the Superior Court of the State of California
for the County of Orange, or the Federal District Court for the Central District
of California, unless subject to arbitration, in which case they shall be filed
in accordance with the Parties’ arbitration agreement.
     11. Sole and Entire Agreement. This Agreement represents the sole and
entire agreement among the Parties and supersedes all prior agreements
(including, without limitation, the Employment Agreement), negotiations, and
discussions between the Parties hereto and/or their respective counsel,
excluding any agreements concerning arbitration of disputes, confidentiality,
trade secret information, or assignment of intellectual property rights. Any
agreement amending or superseding this Agreement must be in writing, signed by
duly authorized representatives of the Parties, specifically reference this
Agreement; and state the intent of the Parties to amend or supersede this
Agreement.
     12. Arbitration. The Parties hereby agree to submit any claim or dispute
arising out of or relating to the terms of this Agreement to private and
confidential arbitration by a single neutral arbitrator. Subject to the terms of
this Section, the arbitration proceedings shall be governed by the rules of the
Judicial Arbitration and Mediation Service (“JAMS”) applicable to employment
disputes as they may be in effect from time to time, and shall take place in
Orange County, California. The arbitrator shall be appointed by agreement of the
Parties hereto or, if no agreement can be reached, by the JAMS pursuant to its
rules. The decision of the arbitrator shall be rendered in writing and be final
and binding on all Parties to this Agreement, and judgment thereon may be
entered in any court having jurisdiction. The arbitrator’s fees and/or any other
fees payable to JAMS shall be shared in accordance with the rules of JAMS;
provided, however, that Employee shall not be required to pay any such fees that
are unique to arbitration and/or would exceed the cost of filing the same
claim(s) in a court of competent jurisdiction, and any shortfall shall be borne
by the Company. The Parties shall each bear their own attorneys’ fees, witness
expenses, expert fees and other costs, except to the extent they may be awarded
otherwise by the arbitrator in accordance with applicable law. This arbitration
procedure is intended to be the sole and exclusive method of resolving any claim
between the Parties, and each of the Parties hereby waives any right to a jury
trial with respect to such claims.
     13. Headings. The headings in this Agreement are provided solely for the
Parties’ convenience, and are not intended to be part of, nor to affect or alter
the interpretation or meaning of this Agreement.
     14. Construction of Agreement. Both Parties have been represented by, or
had the opportunity to be represented by counsel in connection with this
Agreement. Any rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in the construction or
interpretation of this Agreement.
     15. Counterparts. For the convenience of the Parties hereto, this Agreement
may be executed in any number of counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts shall together
constitute the same agreement.

 

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     16. Authority to Execute this Agreement. The person or persons executing
this Agreement on behalf of a Party warrants and represents that he or she has
the authority to execute this Agreement on behalf of the Party and has the
authority to bind that Party to the performance of its obligations hereunder.
[Remainder of Page Intentionally Left Blank]

 

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     IN WITNESS WHEREOF, the parties have entered into this Separate and General
Release Agreement as of the date first set forth above.

                  “COMPANY”
 
                IsoTis, Inc.    
 
           
 
  By:   /s/ Pieter Wolters    
 
                Name: CEO         Title: Pieter Wolters    
 
                “EMPLOYEE”    
 
                /s/ Kathryn Liljestrand      6/29/07                   Kathryn
Liljestrand