tenx_ex103






Exhibit 10.3

 






 



SEPARATION
AND GENERAL RELEASE
AGREEMENT


 


This
Separation and General Release Agreement (the
“Agreement”) is made and entered into by and between
Tenax Therapeutics, Inc. (the “Company”) and Anthony A.
DiTonno (the “Employee”).

 


WHEREAS, Employee
is currently employed by the Company as Chief Executive Officer
pursuant to an employment agreement between Employee and the
Company dated June 1, 2018 (“Employment
Agreement”).

 


WHEREAS, in
connection with Employee’s retirement from the Company and
the transition of his responsibilities to the next Chief Executive
Officer, the employment relationship between the Company and
Employee is being terminated as of the Effective Separation Date
defined herein.

 


WHEREAS, the
Company is willing to provide Employee the severance benefits
described herein in exchange for his entering into this Agreement
and assisting with the transition to the next Chief Executive
Officer, and the parties desire to terminate their employment
relationship on mutually agreeable terms and avoid all litigation
relating to the employment relationship and its
termination.

 


WHEREAS, Employee
represents that he has carefully read this entire Agreement,
understands its consequences, and voluntarily enters into
it.

 


NOW
THEREFORE, in consideration of the above and the mutual promises
set forth below, and of other good and valuable consideration, the
receipt and sufficiency of which the parties acknowledge, Employee
and the Company agree as follows:

 

1. SEPARATION. Employee tenders,
and the Company (including the Board of Directors of the Company)
accepts, Employee’s voluntary resignation from all positions
with the Company, including as a member of the Board of Directors,
such voluntary resignation to be effective July 13, 2021
(“Effective Separation Date”).

 

2. SEVERANCE BENEFITS. In
consideration of the release of claims and other promises contained
herein and on the condition that this
Agreement has become effective under Section 6 of this
Agreement and that Employee fully complies with his
obligations under this Agreement, the Company will provide Employee
with the following:

 

(a) Severance pay in the total amount of Five Hundred
and Sixty Two Thousand Eight Hundred and Fifty Two Dollars
($562,852) (less all applicable withholdings), payable in a lump
sum on the sixtieth (60th)
day following the Effective Separation Date (“Severance
Payment Date”).

 

(b) Transition Services Grant. In
consideration of Employee’s services and assistance in
facilitating the transition of Chief Executive Officer
responsibilities to the next Chief Executive Officer of the
Company, Employee shall be awarded, as of the date hereof, options
to purchase up to 50,000 shares of $0.0001 par value common stock
of the Company pursuant to the Company’s 2016 Stock Incentive
Plan, such options vesting in full on the Effective Separation
Date, as further set forth in the Award Agreement attached hereto
as Exhibit A (such
award, the “Transition Services Grant”).

 


 




 








 






 

(c) Prior Equity Grants. As of the
Effective Separation Date, the vesting on all unvested stock
options (including, for the purpose of clarity, the Transition
Services Grant) previously granted by Company to Employee shall
accelerated and be vested and all stock options held by Employee
shall be exercisable as set forth in the applicable option
agreement, except that all options shall be exercisable through the
earlier of: (i) the termination date of such options set forth in
the applicable option agreement; or (ii) July 13, 2026. Employee
understands that, as a result of such extension, any options not
exercised by Employee with 90 days of the Effective Separation Date
may no longer qualify as incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as
amended.

 

(d) Separation Expenses. The
Company will reimburse Executive for the attorney’s fees he
has incurred in connection with the review and negotiation of this
Executive Employment Agreement in an amount not to exceed
$5,000.

 

(e) Conditioned on the
proper and timely election by Employee and/or his qualified
beneficiaries to continue group health insurance under COBRA after
the Effective Separation Date, reimbursement of the applicable
COBRA premiums paid by Employee for such continuation coverage for
up to the eighteen (18) month period following the Effective
Separation Date. Reimbursements for
COBRA premium payments shall begin on the Severance Payment Date
and shall be made as soon as possible following the
Employee’s submission to the Company of proof of timely
payments, but not later than thirty (30) days after the
Employee’s submission of proof of timely payments; provided,
however, all such claims for reimbursement shall be submitted by
the Employee and paid by the Company no later than twenty-one (21)
months following the termination of the Employee’s
employment. Any obligation for the Company to make payments for
COBRA reimbursement under this Agreement shall immediately cease
when the Employee becomes eligible for health insurance from a
subsequent employer, and the Employee shall promptly notify the
Company of such subsequent eligibility. If Employee desires COBRA
coverage, Employee shall bear full responsibility for applying for
COBRA coverage and nothing herein shall constitute a guarantee of
COBRA benefits. Under no circumstances will Employee be entitled to
a cash payment or other benefit in lieu of reimbursements for the
actual costs of premiums for COBRA continuation hereunder.The
amount of expenses eligible for reimbursement during any calendar
year shall not be affected by the amount of expenses eligible for
reimbursement in any other calendar year.

 


3. EMPLOYEE
ACKNOWLEDGEMENTS. By signing this Agreement, Employee
represents that he has been properly paid for all time worked and
received all wages and salary (including overtime pay), payment for
accrued but unused vacation or paid time off, expense
reimbursement, and all other amounts of any kind due to him from
the Company and he is not entitled to any other compensation,
payments or benefits of any nature as the result of the termination
of his employment with the sole exception of (a) his final paycheck
for work during his final payroll period which will be paid on the
next regularly scheduled payroll date following the Effective
Separation Date, (b) the pay and benefits under this Agreement, (c)
any accrued and vested benefits payable pursuant to the
Company’s employee benefit plans and (d) acceleration of
vesting of stock option grants and extension of time to exercise as
set forth in Section 2(b) above.

 


 




 

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4.


RELEASE.






 

(a) In
consideration of the benefits conferred by this Agreement,
EMPLOYEE (ON BEHALF
OF HIMSELF AND HIS ASSIGNS, HEIRS AND OTHER REPRESENTATIVES)
RELEASES THE COMPANY AND ITS RELATED PARTIES (DEFINED BELOW)
(“RELEASEES”) FROM ALL
CLAIMS AND
WAIVES ALL
RIGHTS KNOWN OR
UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE AGAINST THE COMPANY, ITS
PREDECESSORS, SUBSIDIARIES OR AFFILIATES arising out of or relating to his employment with
the Company and separation therefrom, to the fullest extent
permitted by law, including but not limited
to any and all claims, debts,
demands, actions, causes of action, damages, liabilities, costs,
and expenses:

 

(i) arising
out of or relating to Employee’s employment with the Company
and the separation of the same;

 

(ii) arising
out of or relating to Employee’s employment agreement with
the Company or ancillary agreements;

 

(iii) arising
out of or relating to employment practices or policies of
the Company;

 

(iv) arising
under federal, state (including specifically, but not limited to,
North Carolina) or local laws prohibiting discrimination,
harassment, or retaliation on the basis of age (including but not
limited to claims under the Age Discrimination in Employment Act of
1967 (“ADEA”), as amended), sex, national origin, race,
religion, disability, veteran status, or any other protected
status, class, or characteristic;

 

(v) for
compensation and benefits (including but not limited to claims
under the Employee Retirement Income Security Act of 1974
(“ERISA”), Fair Labor Standards Act of 1938
(“FLSA”), Family and Medical Leave Act of 1993
(“FMLA”), all as amended, and similar federal, state,
and local laws and claims under any other Company policy, plan or
program;

 

(vi) under
federal, state, or local law of any nature whatsoever (including
but not limited to constitutional, statutory, tort, express or
implied contract, or other common law, as well as breach of
covenants of fair dealing and good faith, civil conspiracy, duress,
promissory or equitable estoppel, fraud, mistake,
misrepresentation, violation of public policy, retaliation,
personal injury, breach of fiduciary duty, bad faith, and any other
wrongful conduct);
and

 

(vii) for
attorneys’ fees.

 


Provided,
however, the release of claims set forth in this Agreement does
NOT:

 

 

(viii) apply
to claims for workers’ compensation benefits, disability
insurance benefits, vested retirement benefits, or unemployment
benefits filed with the applicable state agencies or where
otherwise prohibited by law;


 




 

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(ix) bar
a challenge under the Older Workers Benefit Protection Act of 1990
(OWBPA) to the enforceability of the waiver and release of ADEA
claims set forth in this Agreement; or

 

(x) prohibit
Employee from filing a charge with or participating in an
investigation by the U.S. Equal Employment Opportunity Commission
or other governmental agency with jurisdiction concerning the
terms, conditions and privileges of employment or jurisdiction over
the Company’s business or assisting with an investigation
conducted internally by the Company; provided, however, that by
signing this Agreement, Employee waives the right to, and shall not
seek or accept, any monetary or other relief of any nature
whatsoever in connection with any such charges, investigations or
proceedings. This Agreement does not limit Employee’s right
to receive an award for information provided to the SEC, FINRA, or
any other securities regulatory agency or authority.

 

(b) Employee
will not sue the Releasees on any matters relating to his
employment or separation therefrom arising before the execution of
this Agreement (with the sole exception of claims and challenges
set forth in subparagraph (a) (v) through (vi) above), or join as a
party with others who may sue on any such claims, or opt-in to an
action brought by others asserting such claims, and in the event
that Employee is made a member of any class asserting such claims
without his knowledge or consent, Employee shall opt out of such
action at the first opportunity.


 

(c) The
Releasees which Employee is releasing by signing this Agreement
include: the Company and its predecessors, successors, and assigns
and its and/or their past, present and future owners, parents,
subsidiaries, affiliates, predecessors, successors, assigns,
officers, directors, employees, employee benefit plans (together
with all plan administrators, trustees, fiduciaries and insurers)
and agents.


 




5.

COMPANY INFORMATION
AND PROPERTY.





 


(a)           
Employee shall not at any time after his employment terminates
disclose, use or aid third parties in obtaining or using any
confidential or proprietary Company information, including but not
limited to Confidential Information (as defined in the Employee
Non-Disclosure and Invention Assignment Agreement executed by the
Employee, Effective June 1, 2018 (the “Confidentiality
Agreement”), nor access or attempt to access any Company
computer systems, networks or any resources or data that resides
thereon.

 


Confidential
or proprietary information is information relating to the Company
or any aspect of its business which is not generally available to
the public, the Company’s competitors, or other third
parties, or ascertainable through common sense or general business
or technical knowledge; however, nothing in this paragraph or in
this Agreement or in the agreements referenced in subparagraph (c)
below is intended, nor shall be construed, to (i) prohibit Employee
from any communications to, or participation in any investigation
or proceeding conducted by, any governmental agency referenced in
Section 4, (ii) interfere with, restrain, or prevent Employee
communications regarding wages, hours, or other terms and
conditions of employment, or (iii) prevent Employee from otherwise
engaging in any legally protected activity. Moreover,
notwithstanding the foregoing or any other provision in this
Agreement, Employee cannot be held criminally or civilly liable
under any federal or state trade secret law if he discloses a trade
secret (iv) to federal, state, or local government officials, to
his attorneys, or in a sealed court document, for the purpose of
reporting or investigating a suspected violation of the law; or (v)
to his attorneys or in a sealed court document in connection with a
lawsuit for retaliation by an employer for reporting a suspected
violation of the law.


 




 

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(b)           All
records, files or other materials maintained by or under the
control, custody or possession of the Company or its agents in
their capacity as such shall be and remain the Company’s
property and Employee shall return all such property. By signing
this Agreement, Employee represents that:

 



(i)      



Employee
has returned all the Company property (including, but not limited
to, credit cards; keys; company car; cell phone; air card; access
cards; thumb drive(s), laptop(s), personal digital devices and all
other computer hardware and software; records, files, documents,
manuals, and other documents in whatever form they exist, whether
electronic, hard copy or otherwise and all copies, notes or
summaries thereof and turned over all Company passwords or access
codes which he created, received or otherwise obtained in
connection with his employment);





 



(ii)     


Employee
has not deleted any emails, files or other information from any
Company computer or device prior to his return of the
property;





 



(iii)     


Employee
has permanently deleted any Company information that may reside on
his personal computer(s), other devices or accounts and, if
requested by the Company, has submitted all personal computers,
phones and other devices which he used for Company business, and
has identified all personal accounts on which Company information
has been placed and related passwords, to a third party vendor, as
may be designated by the Company, for inspection and removal of any
Company-related information; and





 



(iv)     


Employee
will fully cooperate with the Company in winding up his work and
transferring that work to those individuals designated by the
Company.





 


(c)           Nothing
in this Agreement shall relieve Employee from any obligations under
any other previously executed Confidentiality Agreement or any
other proprietary information or secrecy agreements. All such
agreements shall continue to be in full force and effect upon the
execution of this Agreement subject to the clarification set forth
in subparagraph (a) above.

 

6. RIGHT
TO REVIEW AND REVOKE. The
Company delivered this Agreement to Employee on July 1, 2021 by
hand-delivery and desires that he have adequate time and
opportunity to review and understand the consequences of entering
into it. Accordingly, the Company advises him to consult with his
attorney prior to executing it and that he has twenty-one (21) days
within which to consider it. In the event that he does not return
an executed copy of the Agreement to Margaret Rosenfeld at K&L
Gates LLP, 4350 Lassiter at North Hills Avenue, Suite 300, Raleigh,
NC 27609, by no later than the 22nd calendar day after receiving
it, this Agreement and the obligations of the Company herein shall
become null and void and Employee’s employment will terminate
on the Effective Separation Date and he will receive base pay (less
applicable deductions) through the Effective Separation Date and
will not be eligible for the severance benefits described in
Section 2. Employee may revoke the Agreement during the seven (7)
day period immediately following his execution of the Agreement
(“Revocation Period”). The Agreement will not become
effective or enforceable until the Revocation Period has expired on
the eighth (8th) day after Employee signs this Agreement. To revoke
the Agreement, a written notice of revocation must be delivered to
Margaret Rosenfeld at K&L Gates LLP.


 






 

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7. CONFIDENTIALITY
AND NON-DISPARAGEMENT.
Employee shall keep the terms and
provisions of this Agreement confidential, and Employee represents
and warrants that since receiving this Agreement he has not
disclosed, and going forward will not disclose, the terms and
conditions of this Agreement to third parties, except as follows:
(i) he may reveal the terms and provisions of this Agreement to
members of his immediate family, or to an attorney whom he may
consult for legal advice, or representatives of any governmental
agency referenced in Section 4, provided that such persons agree to
maintain the confidentiality of the Agreement and (ii) he may
disclose the terms and provisions of this Agreement to the extent
such disclosure is required by law. Employee represents and
warrants that since receiving this Agreement, he (i) has not made,
and going forward will not make, disparaging, defaming or
derogatory remarks about the Company or its products, services,
business practices, directors, officers, managers or employees to
anyone; nor (ii) taken, and going forward will not take, any action
that may impair the relations between the Company and its vendors,
customers, employees, or agents or that may be detrimental to or
interfere with, the Company or its business.

 


Nothing
in this section nor in this Agreement is intended, nor shall be
construed, to (iii) prohibit Employee from any communications to,
or participation in any investigation or proceeding conducted by,
any governmental agency referenced in Section 4, (iv) interfere
with, restrain, or prevent Employee communications regarding wages,
hours, or other terms and conditions of employment, or (v) prevent
Employee from otherwise engaging in any legally protected
activity.

 

8. OTHER.
Except as expressly provided in this Agreement, this Agreement
supersedes all other understandings and agreements, oral or
written, between the parties and constitutes the sole agreement
between the parties with respect to its subject matter except that
Employee specifically acknowledges and agrees that his obligations
under Section 7 (Confidential Information and Competitive Business
Activities) and the Confidentiality Agreement incorporated by
reference in Section 7 of the Employment Agreement shall continue
after the termination of that Employment Agreement in accordance
with their terms. Each party acknowledges that no representations,
inducements, promises or agreements, oral or written, have been
made by any party or by anyone acting on behalf of any party, which
are not embodied in this Agreement and no agreement, statement or
promise not contained in the Agreement shall be valid or binding on
the parties unless such change or modification is in writing and is
signed by the parties. Employee’s or the Company’s
waiver of any breach of a provision of this Agreement shall not
waive any subsequent breach by the other party. If a court of
competent jurisdiction holds that any provision or sub-part thereof
contained in this Agreement is invalid, illegal or unenforceable,
that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement.

 


This
Agreement is intended to avoid all litigation relating to
Employee’s employment with the Company and his separation
therefrom; therefore, it is not to be construed as the
Company’s admission of any liability to him - liability which
the Company denies.

 


If
Employee does not abide by this Agreement, then he will: (i) return
all monies received under this Agreement and the Company will be
relieved of its obligations hereunder, except to the extent that
such return and relief would result in invalidation of the release
set forth above, and (ii) indemnify the Company for all expenses it
incurs in seeking to enforce the Agreement or as a result of his
failure to abide by this Agreement, including reasonable
attorneys’ fees in defending any released
claims.


 




 

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This
Agreement shall apply to, be binding upon and inure to the benefit
of the parties’ successors, assigns, heirs and other
representatives and be governed by North Carolina law (with the
sole exception of its conflicts of laws provisions) and the
applicable provisions of federal law, including but not limited to
ADEA.


 




9.

SECTION 409A.





 

(a)           
General
Compliance. This
Agreement is intended to comply with Section 409A or an exemption
thereunder and shall be construed and administered in accordance
with Section 409A. Notwithstanding any other provision of this
Agreement, payments provided under this Agreement may only be made
upon an event and in a manner that complies with Section 409A or an
applicable exemption. Any payments under this Agreement that may be
excluded from Section 409A either as separation pay due to an
involuntary separation from service or as a short-term deferral
shall be excluded from Section 409A to the maximum extent possible.
For purposes of Section 409A, each installment payment provided
under this Agreement shall be treated as a separate payment. Any
payments to be made under this Agreement upon a termination of
employment shall only be made upon a “separation from
service” under Section 409A. Notwithstanding the foregoing,
the Company makes no representations that the payments and benefits
provided under this Agreement comply with Section 409A, and in no
event shall the Company be liable for all or any portion of any
taxes, penalties, interest, or other expenses that may be incurred
by the Employee on account of non-compliance with Section
409A.

 


(b)           
Specified
Executives.
Notwithstanding any other provision of this Agreement, if any
payment or benefit provided to the Employee in connection with his
termination of employment is determined to constitute
“nonqualified deferred compensation” within the meaning
of Section 409A and the Employee is determined to be a
“specified Executive” as defined in Section
409A(a)(2)(b)(i), then such payment or benefit shall not be paid
until the first payroll date to occur following the six-month
anniversary of the Effective Separation Date or, if earlier, on the
Employee’s death (the “Specified Executive Payment
Date”). The aggregate of any payments that would otherwise
have been paid before the Specified Executive Payment Date shall be
paid to the Employee in a lump sum on the Specified Executive
Payment Date and thereafter, any remaining payments shall be paid
without delay in accordance with their original
schedule.]

 

 



[Signature page follows.]


 




 




 

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IN
WITNESS WHEREOF, the parties have entered into this Agreement on
the day and year written below.

 



EMPLOYEE REPRESENTS THAT HE HAS CAREFULLY READ THE ENTIRE
AGREEMENT, UNDERSTANDS EACH AND EVERY TERM, AND VOLUNTARILY ENTERS
INTO IT.


 


	
 

	
 

	
 

	
 

	
 


	
 

	

/s/ Anthony A.
DiTonno

	
 

	
07/06/2021


	
 

	

Anthony A.
DiTonno

	
 

	
 Date



	
 

	
 

	
 

	
 

	
 


	
 

	

TENAX
THERAPEUTICS, INC. 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
By:


	
 /s/ Michael
Jebsen

	
 

	
07/06/2021


	
 

	
Name: 


	
 Michael
Jebsen

	
 

	
 Date


	
 

	
Title:

	
 Chief Financial
Officer