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                                                                                Exhibit
10.1
 

SEPARATION AGREEMENT
 
This Separation Agreement (the “Agreement”) is entered into as of March 31,
2006, between SIGA Technologies, Inc., a Delaware corporation (the “Company”),
and Bernard Kasten, M.D. (“Executive”).
 
WHEREAS, the Company no longer desires to employ Executive and Executive no
longer desires to be employed by the Company, the parties hereto agree to
terminate Executive’s employment on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and of the mutual
agreements and covenants hereinafter set forth, the parties agree to the terms
and conditions of this Agreement as follows:

1.
EMPLOYMENT AGREEMENT TERMINATED. Except as otherwise expressly set forth below,
all terms and conditions of the Employment Agreement dated July 2, 2004 between
Executive and Company (the “Employment Agreement”) are hereby terminated, and
this Agreement and its attachment expressly supersede any and all previous
understandings and agreements between the Company and Executive and constitute
the sole and exclusive understanding between the Company and Executive
concerning the subjects set forth herein.

2.
REMAINING TENURE. Executive shall retain the title of Chief Executive Officer
(“CEO”) through and including April 30, 2006 or until he obtains new employment,
whichever occurs first (the “Remaining Tenure”).

3.
CONSIDERATION.

 
a.
Salary. During the Remaining Tenure and for an additional period beginning the
first business day after the end of the Remaining Tenure and continuing through
September 16, 2006 (the “Separation Period”), Executive shall receive his salary
on the terms and conditions set forth in Section 3(a) of the Employment
Agreement in lieu of any other severance or payment.

 
b.
Options. Concurrently with the execution of this Agreement, the parties will
execute an amendment to Executive’s Incentive Stock Option Agreement (relating
to the “Time Vested Options,” as such term is defined in the Employment
Agreement) that is substantially in the form of the annexed Exhibit A.
Executive’s Incentive Stock Option Agreement (relating to the “Milestone
Options,” as such term is defined in the Employment Agreement) is cancelled and
hereby declared void ab initio and of no further force or effect. The parties’
rights and obligations with respect to all options in Company stock, whether
vested or unvested, shall be as set forth in the amended Incentive Stock Option
Agreement (relating to the Time Vested

 
 
 

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Options), notwithstanding anything in the Employment Agreement to the contrary.

 
c.
Medical and/or Dental Insurance Benefits. Executive will be permitted to
continue participation in the Company's group medical and/or dental insurance
benefit plans as in effect and amended from time to time at the contribution
level in effect for active employees until (i) the end of the Remaining Tenure,
(ii) he becomes entitled to Medicare or (iii) he becomes eligible for coverage
under medical and/or dental insurance benefit plans, as the case may be, of
another employer through his future employment, whichever occurs first.
Executive shall notify the Company of his eligibility for coverage under medical
and/or dental insurance benefit plans of any future employer of Executive
promptly and no later than the date when such coverage begins.

4.
COOPERATION. During the Remaining Tenure and Separation Period, Executive shall
be available to the Company on a reasonable basis for transitional purposes,
including, but not limited to, working on continuing funding projects, the
proposed transaction between the Company and PharmAthene, Inc., Company
obligations with respect to the Securities and Exchange Commission (“SEC”) and
the transition of contacts developed in connection with Executive’s work as CEO.
At any time, upon request, Executive shall give his assistance and cooperation
willingly in any matter relating to his expertise or experience as the Company
may reasonably request, including his attendance and truthful testimony where
deemed appropriate by the Company, with respect to any investigation or the
Company's defense or prosecution of any existing or future claims or litigations
relating to matters in which he was involved or potentially has knowledge by
virtue of his employment with the Company.

5.
NON-DISPARAGEMENT. Executive will not disparage or defame the Company, its
employees, officers, directors or shareholders, any of its actual or proposed
products or services, the proposed combination of the Company and PharmAthene,
Inc. or any other activity of the Company during his tenure with the Company.
The Company will not disparage or defame Executive. The parties acknowledge that
providing substantially accurate information concerning Executive’s period of
tenure or job titles with the Company shall not violate this Agreement.

6.
ANNOUNCEMENT OF SEPARATION. The parties shall work in good faith to craft a
mutually acceptable public announcement concerning the subject of this
Agreement, including a press release and Company disclosure on SEC Form 8-K.

7.
OUT-OF-POCKET EXPENSES. During the Remaining Tenure and Separation Period,
Executive shall be reimbursed for all legitimate out-of-pocket expenses actually
incurred in connection with his cooperation with the Company pursuant to
Paragraph 4 of this Agreement, so long as such expenses are approved in advance
and substantiated with appropriate receipts.

 

 
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8.             
COMPANY PROPERTY. At the end of the Remaining Tenure, Executive shall return all
Company property in his possession or control, including, without limitation,
computer disks or data (including, without limitation, data retained on any
computer), any home-office equipment or computers purchased or provided by the
Company, and any records, documents, files or other materials. Executive may
retain the computer monitor and other devices without data storage capabilities
previously supplied or made available to him that have never contained Company
data if, within seven (7) days of the execution of this Agreement, he shall
remit to the Company the full purchase cost of such items.

9.
INDEMNIFICATION. Executive shall remain entitled to indemnification from the
Company under the terms of the Company’s certificate of incorporation and bylaws
as in effect on the date of this Agreement for acts relating to his employment
by the Company. Without limiting the foregoing, the Company agrees to indemnify
Executive in accordance with the Company’s certificate of incorporation and
bylaws in connection with the claims arising out of the pending litigation with
Four Star Group without Executive being required to make any further demand or
notice, effective on the receipt by the Company of Executive’s undertaking.

10.          
RELEASES.

 
(a)
RELEASE OF COMPANY. Executive hereby releases and holds harmless (on behalf of
himself and his family, heirs, executors, agents, successors and assigns) now
and forever, the Company from and waives any claim in any legal jurisdiction
that he has presently or may have or has had in the past, known or unknown,
against the Company upon or by reason of any matter, cause or thing whatsoever,
from the beginning of the world to the date of this release, including, without
limitation, all claims arising from his employment with, or termination of
employment from, the Company, or otherwise. Without limiting the generality of
the preceding, this Agreement is intended to and shall release the Company from
any and all claims or rights arising under any federal, state or local statute
(including, without limitation, Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act of 1967, as amended, the Equal
Pay Act, as amended, the Americans with Disabilities Act of 1990, as amended,
the Employee Retirement Income Security Act of 1974, as amended, the Family and
Medical Leave Act of 1993, as amended, the Fair Labor Standards Act, as amended,
and all other statutes regulating the terms and conditions of your employment),
regulation or ordinance, under the common law or in equity (including any claims
for wages, wrongful discharge, discrimination, or otherwise), or under any
policy, agreement, understanding or promise, written or oral, formal or
informal, between the Company and Executive, including, without limitation, any
claim Executive might have for severance, termination or severance pay.
Notwithstanding the provision of any state law, and for the purpose of
implementing a full and complete release and discharge of the Company, Executive
expressly acknowledges that this Agreement is intended to include in its effect,
without limitation, all claims which Executive does not know

 

 
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of or suspect to exist in his favor at the time of signing this Agreement and
arising from his employment with or termination of employment from the Company,
and that this Agreement contemplates the release of any such claim.

 
(b)
COVENANT NOT TO SUE. Executive will not sue the Company’s shareholders, or the
officers, directors, employees, agents, attorneys, successors or assigns of any
of the Company or its shareholders (collectively, with the Company’s
shareholders, the “Company-Related Group”), regarding any claim or matter
relating to or arising out of Executive’s employment with the Company, the
termination of Executive’s employment, or any other event or activity relating
or pertaining to the Company; provided, however, that the covenant set forth in
this Paragraph 10(b) shall not bar the assertion of any defense or counterclaim
to any claim brought by any member of the Company-Related Group. Executive
acknowledges that all members of the Company-Related Group are intended
third-party beneficiaries of this covenant.

 
(c)
RELEASE OF EXECUTIVE. The Company hereby releases and holds harmless (on behalf
of itself and its agents, successors and assigns) now and forever, the
Executive (and his family, heirs, executors, agents, successors and assigns)
from, and waives any claim in any legal jurisdiction that it has presently or
may have or has had in the past, known or unknown, against, the Executive upon
or by reason of any matter, cause or thing whatsoever, from the beginning of the
world to the date of this release, including, without limitation, all claims
arising from the Executive’s employment with, or termination of employment from,
the Company, or otherwise.

 
(d)
STOCK OPTION AGREEMENT NOT RELEASED. The releases set forth in this Paragraph 10
do not extend to the rights and obligations set forth in this Agreement or the
amended Incentive Stock Option Agreement.

11.
CONFIDENTIALITY, INVENTION OWNERSHIP AND RELATED COVENANTS. Executive shall
remain bound by the obligations contained in Section 8(a), 8(b) and 8(c) of the
Employment Agreement. In addition, Executive shall not at any time divulge to
any other entity or person any confidential information acquired by Executive
concerning the Company’s or its affiliates’ financial affairs or business
processes or methods or their research, development or marketing programs or
plans, any other of its or their trade secrets, any information regarding
personal matters of any directors, officers, employees or agents of the Company
or their respective family members, any information concerning this Agreement or
the terms thereof, or any information concerning the circumstances of
Executive’s employment with and any termination of Executive’s employment from
the Company, or any information regarding discussions related to any of the
foregoing or make, write, publish, produce or in any way participate in placing
into the public domain any statement, opinion or information with respect to any
of the foregoing or that reflects adversely upon or would reasonably impair the
reputation or best interests of the Company or any of its directors, officers,
employees or agents or their

 

 
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respective family members, except in each case (i) information that is required
to be disclosed by court order, subpoena or other judicial process,
(ii) information regarding Executive’s job responsibilities during his
employment with the Company to prospective employers in connection with an
application for employment, (iii) information regarding the financial terms of
this Agreement to Executive’s spouse or his tax advisor for purposes of
obtaining tax advice provided that such persons are made aware of and agree to
comply with the confidentiality obligation, (iv) information that is necessary
to be disclosed to Executive’s attorney to determine whether Executive should
enter into this Agreement or (v) information mutually agreed upon pursuant to
Paragraphs 4 or 6 of this Agreement. The foregoing prohibitions shall include,
without limitation, directly or indirectly publishing (or causing, participating
in, assisting or providing any statement, opinion or information in connection
with the publication of) any diary, memoir, letter, story, photograph,
interview, article, essay, account or description (whether fictionalized or not)
concerning any of the foregoing, publication being deemed to include any
presentation or reproduction of any written, verbal or visual material in any
communication medium, including any book, magazine, newspaper, electronic or
internet publication or discussion group, theatrical production or movie, or
television or radio programming or commercial. In addition to any and all other
remedies available to the Company for any violation of this Paragraph, Executive
agrees to immediately remit and disgorge to the Company any and all payments
paid or payable to him in connection with or as a result of engaging in any of
the above acts. In the event that Executive is required to make disclosure under
any court order, subpoena or other judicial process that in any way relates to
his employment with the Company or any of the foregoing matters described above,
Executive will promptly notify the Company so that the Company may seek
appropriate relief from such disclosure or waive Executive’s duty of
nondisclosure hereunder, provided that, if, following any such effort by the
Company to avoid disclosure, Executive shall, in the reasonable opinion of his
counsel, stand liable for contempt or suffer other censure or penalty for
failure to disclose, Executive may make such disclosure under terms that seek to
protect confidentiality to the extent permissible without liability hereunder.
Executive shall permit the Company to participate with counsel of its choice in
any proceeding relating to such compulsory disclosure and shall cooperate with
the Company’s efforts to avoid disclosure. Executive acknowledges that all
information the disclosure of which is prohibited by this Paragraph is of a
confidential and proprietary character and of great value to the Company.

12.
FREE WILL. Executive is entering into this Agreement of his own free will and
without coercion, intimidation or threat of retaliation. He acknowledges and
agrees that the Company has not exerted any undue pressure or influence on him
in this regard. Executive acknowledges that he has had reasonable time to
determine whether entering into this Agreement is in his best interest, has
retained counsel and has read and fully understands the terms set forth in this
Agreement.

13.
PENALTIES. If Executive initiates or participates (other than as a witness
providing truthful testimony or relevant documents in his possession or control,
subject to Section 11 of this Agreement) in any lawsuit or other legal action
arising out of his employment

 
 

 

 
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with the Company or the termination of his employment with the Company, the
Company may, except as otherwise prohibited by law, reclaim any and all amounts
paid under Section 3(a), 3(c) or 7 of this Agreement, without waiving the
release granted herein, and terminate any unpaid or unvested benefit or payment
that is due under this Agreement, in addition to any other remedies it may have.
In addition, in any action brought to enforce this Agreement, the prevailing
party shall be entitled to receive all of its reasonable attorneys’ fees and
costs incurred resulting from, or incident to, any such litigation.

14.
NOTICE. Any notice to be given under this Agreement shall be given in writing
and delivered either personally or sent by certified mail to the Company c/o
Chief Financial Officer at 420 Lexington Avenue, Suite 408, New York, New York
10170, and to you at 4380 27th Court, S.W., Building No. One, #104, Naples,
Florida 34116, with a copy to Bradley G. Haas, Esq., Katz Teller Brant & Hild,
255 East Fifth Street, Suite 2400, Cincinnati, OH 45202.

15.
NON-ADMISSION. Nothing contained in this Agreement shall be deemed or construed
as an admission of wrongdoing or liability on the part of the Company or
Executive.

16.
SEVERABILITY. Should any provision or part of this Agreement be found to be
invalid or unenforceable, only that particular provision or part so found and
not the entire agreement shall be inoperative.

17.
ASSIGNMENT. This Agreement may be assigned by the Company to (i) any affiliate
of the Company or (ii) any non-affiliate of the Company that shall acquire all
or the greater part of the business and assets of the Company. In the event of
any such assignment, the Company shall cause such affiliate or non-affiliate, as
the case may be, to assume the obligations of the Company hereunder with the
same effect as if such assignee were the “Company” hereunder. This Agreement is
personal to Executive and Executive may not assign any rights or delegate any
responsibilities hereunder without the prior approval of the Company.

18.
NON-ALIENATION. Executive shall not have any right to pledge, hypothecate or in
any way create a lien upon any payment or benefit provided under this Agreement,
and no such payment or benefit shall be assignable in anticipation of payment,
either by voluntary or involuntary acts or by operation of law.

19.
GOVERNING LAW AND CHOICE OF FORUM. This Agreement shall be governed by, and
construed pursuant to, the laws of the State of New York applicable to
agreements made and to be performed in New York by citizens thereof. The parties
consent and agree to the exclusive jurisdiction of the federal and state courts
sitting in the County of New York in the State of New York for all purposes.
Notice of any lawsuit may, but need not, be sent in accordance with Paragraph 14
above in lieu of any other allowable method.

 

 
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20.          
ENTIRE AGREEMENT. This Agreement and its attachment constitute the sole and
exclusive understanding between the Company and Executive concerning the
subjects set forth herein, other than the surviving terms of the Employment
Agreement and the amended Incentive Stock Option Agreement (relating to Time
Vested Options) expressly referenced herein or in the attachment, the terms of
which remain in full force and effect. Neither this Agreement nor the attachment
may be altered, modified, changed or discharged except in a writing signed by
Executive and agreed to by the Company.

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

SIGA TECHNOLOGIES, INC.

By: /s/ Thomas N. Konatich                                   
                               Thomas N. Konatich
                               Chief Financial Officer
 

/s/ Bernard Kasten       
Bernard Kasten, M.D.
 
KTBH:659076.2
 
 
 
 
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