EX-10.1






SEPARATION AGREEMENT AND RELEASE




This Separation Agreement and Release (the “Agreement”) is dated July 12 2007, and is
effective on the date described in Section 14. This Agreement is made as a mutually agreed
compromise between the Parties (as defined below) for the complete and final settlement of all
claims, differences, and alleged causes of action existing between them as of the Effective Date.



PARTIES




The Parties to this Agreement are Encysive Pharmaceuticals Inc. (the “Company”) and Bruce D.
Given, M.D. (the “Executive”). The Company and the Executive are referred to collectively as the
“Parties.”



PREAMBLE




WHEREAS, the Executive was previously employed as the President and Chief Executive Officer of
the Company, pursuant to that certain Termination Agreement dated March 21, 2003, as amended from
time to time (the “Termination Agreement”);



WHEREAS, the Parties intend to terminate the Termination Agreement as of the Effective Date
(except with respect to the Executive’s and the Company’s continuing obligations under Sections
6.3(a)(2), 6.3(b) – (e), 8, 9, 10, 12 and 13.8 and Exhibits C and D thereof) and enter into this
Agreement;



WHEREAS, the Parties intend that this Agreement shall operate as a complete and final
settlement of all claims, differences and alleged causes of action existing between them as of the
Effective Date of this Agreement;



WHEREAS, the Executive has had at least 21 days to consider this Agreement;



WHEREAS, the Company has advised the Executive in writing to consult with independent counsel
respecting this Agreement;



WHEREAS, the Executive has had an opportunity to consult with independent counsel with respect
to the terms, meaning and effect of this Agreement; and



WHEREAS, the Executive understands that the Company regards the above representations as
material and that the Company is relying on these representations in entering into this Agreement.



NOW, THEREFORE, in consideration of the mutual promises and obligations contained and
exchanged in this Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:



1. Definitions.



1.1 “Company and/or its Affiliates” means and includes the Company, its Affiliates, and all of
their predecessors, successors and assigns and parents, subsidiaries, divisions or other affiliated
companies, partners, partnerships, present and former officers, directors, employees, stockholders,
agents, employee benefit plans or programs and their fiduciaries, whether in their individual or
official capacities and all of the successors and assigns of the foregoing. “Affiliates” also
includes a person or entity who, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the Company.



1.2 “Date of Termination” means June 24, 2007.



Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Termination Agreement as defined therein unless otherwise defined herein.



2. Termination of the Termination Agreement. The Parties agree that the Termination
Agreement is hereby terminated and of no further force and effect as of the Effective Date, except
with respect to the Executive’s and the Company’s obligations under Section 6.3(a)(2) and (b) –
(e), Good Reason; Without Cause; Nonrenewal; Section 8, Executive’s Confidentiality Obligation;
Section 9, Disclosure of Information Ideas, Concepts, Improvements, Discoveries and Inventories;
Section 10, Ownership of Information, Ideas, Concepts, Improvements, Discoveries, and Inventions
and all Original Works of Authorship; Section 12, Executive’s Non-Competition Obligation; and
Section 13.8, Defense of Claims, all of which survive the termination of the Termination Agreement.
This Agreement shall have no effect on Executive’s Indemnification Agreement (attached as
Exhibit C to the Termination Agreement), the Company’s D&O insurance policy (summarized in
Exhibit D of the Termination Agreement) and any agreement or plan governing Executive’s equity
incentive awards (e.g., stock options and/or restricted stock).



3. Pay Through Date of Termination. The Executive acknowledges that he has received all
salary, wages and other compensation earned on or before the Date of Termination. The Company
agrees it shall pay Executive for all unused vacation time he accrued through the Date of
Termination, as specified in Exhibit A, subject to such payroll and withholding deductions
as may be required by law.



4. Resignation by the Executive. Effective as of the date the Executive signs this
Agreement, the Executive hereby resigns from all positions he holds with the Company and/or its
Affiliates, including as a member of the Company’s Board of Directors. The Executive’s employment
with the Company was terminated effective June 24, 2007.



5. Payments to the Executive. The Parties hereby agree that, subject to the Executive’s
execution of this Agreement containing a release from liability and waiver of right to sue the
Company and/or its Affiliates, the Company agrees to make the payments and continue the benefits
provided for in Sections 6.3(a)(2) and 6.3(b) – (e) of the Termination Agreement, as further
modified and specified in Exhibit A attached hereto, subject to such payroll and
withholding deductions as may be required by law. Notwithstanding any of the above to the
contrary, if there is a Change of Control (as that term is defined under the Company’s Amended and
Restated 1999 Stock Incentive Plan and 2007 Incentive Plan, as amended (each, a “Plan”)) during the
twelve month period following the Date of Termination, the Executive’s outstanding and unvested
stock options and/or restricted stock shall accelerate in accordance with the terms of the
applicable Plan. Further, the Executive will not be entitled to any of the benefits or payments
provided in Sections 6.3(a)(2) and 6.3(c) — (e) of the Termination Agreement if the Executive
breaches this Agreement or the provisions of Sections 8, 9, 10, or 12 of the Termination Agreement.



6. Release by the Executive. The Executive unconditionally, fully and forever waives,
releases, discharges, agrees to hold harmless, and promises not to sue the Company and/or its
Affiliates, from and for any claim, action or right of any sort, known or unknown, arising on or
before the Effective Date.



6.1 This release includes, but is not limited to, any claim arising out of or related to the
following: any claim for any wages, salary, compensation, sick time, vacation time, paid leave or
other remuneration of any kind; any claim for additional or different compensation or benefits of
any sort, including any participation in any severance pay plan; any claim of discrimination or
retaliation on the basis of age, race, sex, religion, marital status, sexual preference, national
origin, handicap or disability, veteran status, or special disabled veteran status; any claim
arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Employee Retirement Income Security Act of 1974, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act of
1938, the Texas Commission on Human Rights Act, Chapter 451 of the Texas Labor Code, or the Texas
Payday Law, as such statutes may be amended from time to time; any other claim based on any
statutory prohibition; any claim arising out of or related to an express or implied employment
contract, any other contract affecting terms and conditions of employment, or a covenant of good
faith and fair dealing; any tort claim or other claim for personal injury, death or property damage
or loss; any claim for fraud or misrepresentation; and any personal gain with respect to any claim
arising under any whistleblower or qui tam provisions of any state or federal law.



6.2 The Executive represents that the Executive has read and understands this release
provision and that rights and claims under the Age Discrimination in Employment Act of 1967 are
among the rights and claims against the Company that the Executive is releasing. The parties
further acknowledge and agree that the Executive is not releasing any of the following: (i) any
rights or claims arising after the Date of Termination, (ii) any rights or claims arising from or
related to any obligations that are stated or affirmed in this Agreement, (iii) any rights or
claims for indemnification pursuant to any applicable contract, policy, bylaw, or law (including
but not limited to the Executive’s Indemnification Agreement with the Company dated March 21, 2002
or the Company’s D&O insurance policy), (iv) any rights or claims under any agreement or plan
governing the Executive’s equity incentive awards (e.g., stock options or restricted stock), and
(v) any rights or claims that may not be released as a matter of law (for example, claims for
unemployment insurance).



7. Consideration. As consideration for the Executive’s execution and performance of his
obligations under this Agreement, the Company will perform its remaining obligations pursuant to
this Agreement.



8. Future Employment. The Executive agrees not to seek or accept employment with the
Company and/or its current Affiliates and acknowledges that the Company and/or its current
Affiliates are not obligated to offer employment to the Executive, now or in the future.
Notwithstanding the foregoing, nothing in this Agreement shall preclude or prevent the Executive
from seeking employment with or becoming employed by an individual or entity that becomes an
Affiliate of the Company following the Date of Termination.



9. No Other Claims. The Executive represents that the Executive has not filed or
authorized the filing of any complaints, charges or lawsuits against the Company and/or its
Affiliates with any federal, state or local court, governmental agency, or administrative agency,
and that if, unbeknownst to the Executive, any such complaint has been filed on the Executive’s
behalf, the Executive will use the Executive’s best efforts to cause it to be withdrawn immediately
and dismissed with prejudice.



10. Confidentiality and Defense of Claims. Both Parties shall keep strictly confidential
all the terms and conditions, including amounts payable, in the Agreement and shall not disclose
them to any person other than legal and/or financial advisors, government officials who seek such
information in the course of their official duties, individuals at the Company responsible for
implementing the Agreement, and the Executive’s spouse, unless compelled to do so by law or
regulation, or business necessity (including the requirement to file this Agreement with the
Securities and Exchange Commission or tax reporting obligations). Nothing in this Section is
intended to prevent the Executive from disclosing the fact that he was employed by the Company or
from describing his employment duties.



11. Consultation With Counsel. The Company advises the Executive to consult with
independent counsel prior to executing this Agreement, and the Executive acknowledges being given
that advice.



12. No Defamatory Statements. The Executive agrees that he will refrain from making any
representation, statement, comment or any other form of communication (hereinafter collectively
referred to as “representation”), whether written or oral, to any person or entity, including but
not limited to the principals, officers, directors, employees, advisors, agents, customers,
suppliers and competitors of the Company and/or its Affiliates, or any government officials, which
representation has the effect or tendency to disparage, denigrate, or otherwise reflect negatively
on the Company and/or its Affiliates and/or their business, officers, directors, shareholders,
employees, agents, advisors or investors. The Company agrees it will take all reasonable steps to
ensure that the Company and its officers, directors, and employees refrain from making any external
representation that would have the effect or tendency to disparage, denigrate, or otherwise reflect
negatively on the Executive. For purposes of any Company-sponsored public statements or responses
to inquiries about the Executive’s employment, the Company shall only provide the following
information: (i) Executive’s dates of employment and positions held, and (ii) a statement that
Executive’s employment with the Company was terminated effective June 24, 2007.



13. Return of Company Materials. The Executive agrees to deliver to the Company promptly
after the Date of Termination all originals and copies of Company materials and all other property
of the Company and/or its Affiliates in the Executive’s possession, custody or control.



14. Revocation of Agreement; Effective Date. The Executive, at the Executive’s sole
discretion, may revoke this Agreement on or before the expiration of seven calendar days after
signing it. Revocation shall be in writing and effective upon dispatch to the following: Paul S.
Manierre, General Counsel, Encysive Pharmaceuticals Inc., 4848 Loop Central Drive, 7th
Floor, Houston, Texas 77081. If the Executive elects to revoke the Agreement, all of the
provisions of the Agreement shall be void and unenforceable. If the Executive does not so elect,
the Agreement shall become effective at the expiration of the revocation period (i.e., on the
eighth day after the Executive signs the Agreement) (the “Effective Date”).



15. Miscellaneous.



15.1 The Parties acknowledge that this Agreement is the result of a compromise and shall never
be construed as, or said by either of them to be, an admission by the other of any liability,
wrongdoing, or responsibility. The Parties expressly disclaim any such liability, wrongdoing,
fault, or responsibility.



15.2 This Agreement constitutes the entire agreement between the Parties, except to the extent
that it expressly incorporates provisions of the Termination Agreement. This Agreement shall have
no effect on the Executive’s Indemnification Agreement (attached as Exhibit C to the
Termination Agreement), the Company’s D&O Insurance policy (as summarized in Exhibit D to
the Termination Agreement) and any agreement or plan governing the Executive’s equity incentive
awards (e.g., stock options or restricted stock), and all such agreements, plans or policies shall
remain in effect. This Agreement may be executed in identical counterparts, each of which shall
constitute an original and both of which shall constitute one and the same agreement. Except as
expressly provided herein, this Agreement supersedes the Termination Agreement and any severance
benefit plan or program and any bonus program at the Company and/or its Affiliates.



15.3 The Parties understand and agree that any breach of the terms of this Agreement may give
rise to liability for money damages and other legal or equitable relief.



15.4 The Parties warrant that no representations have been made other than those contained in
the written provisions of this Agreement, and that they do not rely on any representations not
stated in this Agreement.



15.5 The Parties further warrant that they or their undersigned representatives are legally
competent and fully authorized to execute and deliver this Agreement.



15.6 The Parties confirm they have had the opportunity to have this Agreement explained to
them by independent counsel of their choice, and that they execute this Agreement freely, knowingly
and voluntarily. The Company is relying on its own judgment and on the advice of its independent
counsel and not upon any recommendation of the Executive or his agents, independent counsel or
other representatives. Likewise, the Executive is relying on his own judgment and on the advice of
his independent counsel, and not upon any recommendation of the Company or its directors, officers,
employees, agents, independent counsel or other representatives. By voluntarily executing this
Agreement, both Parties confirm their competence to understand and do hereby accept the terms of
this Agreement as resolving fully all differences, disputes and claims that may exist within the
scope of this Agreement.



15.7 This Agreement may not be modified or amended except by a writing signed by both Parties.
No waiver of this Agreement or of any of the promises, obligations, terms, or conditions contained
in it shall be valid unless it is in writing signed by the Party against whom the waiver is to be
enforced. The waiver by either Party hereto of a breach of any provision of this Agreement shall
neither operate nor be construed as a waiver of any subsequent breach by any Party. Except as
expressly provided for herein, the failure of either Party hereto to take any action by reason of
any breach will not deprive such Party of the right to take action at any time while such breach
occurs.



15.8 If any part or any provision of this Agreement shall be finally determined to be invalid
or unenforceable under applicable law by a court of competent jurisdiction, that part shall be
ineffective to the extent of such invalidity or unenforceability only, without in any way affecting
the remaining parts of said provision or the remaining provisions of the Agreement.



15.9 The Parties have cooperated in the preparation of this Agreement. Hence, the Agreement
shall not be interpreted or construed against or in favor of either Party by virtue of the
identity, interest, or affiliation of its preparer.



15.10 This Agreement is made and shall be enforced pursuant to the laws of the State of Texas,
without regard to its law governing conflicts of law.



15.11 The amount of benefits payable under this Agreement shall be paid from the general
assets of the Company and there shall be no separate trust established to pay any benefits under
this Agreement.



15.12 All payments and benefits payable under this Agreement shall be subject to all
applicable federal, state and local taxes and tax requirements and any elections by the Executive
for payouts or deferrals under any Company benefit plan or program.



15.13 This Agreement shall be binding on and inure to the benefit of the successors and
assigns of the Parties. No rights or obligations, benefits of or payments to the Executive under
this Agreement may be subject to claims of the Executive’s creditors, or in any manner may be
assigned or transferred by the Executive other than his rights to compensation and benefits that
are transferred by will or to his estate by operation of law.



15.14 All notices and other communications required or permitted hereunder or necessary or
convenient in connection herewith shall be in writing and shall be deemed to have been given when
(i) delivered by hand or sent by facsimile, or (ii) on the third business day following deposit in
the United States mail by registered or certified mail, return receipt requested, to the addresses
as follows (provided that notice of change of address shall be deemed given only when received):



If to the Company to:



Encysive Pharmaceuticals Inc.



4848 Loop Central Drive, Suite 700



Houston, Texas 77081




Attention: General Counsel


Facsimile No.: (713) 782-8232



If to the Executive to:



Bruce D. Given, M.D.




2702 Sabine Court




Pearland, Texas 77584



or to such other addresses as the Company or the Executive, as the case may be, shall designate by
notice to the other party hereto in the manner specified in this Section 15.14.



15.15 Titles and headings to Sections are for the purpose of reference only and shall in no
way limit, define or otherwise affect the provisions hereof. Any and all Exhibits referred to in
this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes.
The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to
the entire Agreement and not to any particular provision hereof.



15.16 Wherever appropriate to the intention of the parties hereto, the respective rights and
obligations of said parties, including, but not limited to, the rights and obligations set forth in
Sections 10 through 13 hereof and this Section 15, shall survive any termination or expiration of
this Agreement.



15.17 Section 13.8 of the Termination Agreement shall be revised to add the following at the
end thereof:



“To the extent that Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), is applicable to the expenses under
this Section 13.8, and to the extent that no exception under Code
Section 409A is applicable the following shall apply: (a) all
expenses that are taxable and includable in income to be paid under
this Section 13.8 shall only be paid if such expenses are incurred
during the statutory period for which a claim may be made through
the period in which any arbitration or litigation is completed,
including all appeals (provided no period shall exceed 10 years);
(b) any amount reimburseable or paid in one year shall not affect
the amount to be reimbursed or paid in another tax year; (c) the
Executive must provide the Company with reasonable documentation of
such expenses; (d) payments for such expenses will be made in cash
within 30 days after the expenses are incurred but in no event later
than the end of Executive’s taxable year in which the expenses are
incurred; and (e) the payments under this Section 13.8 cannot be
substituted for another benefit. However, no payments subject to
the foregoing shall be made during the six-month period commencing
the day after the Date of Termination (the “Waiting Period”), and on
January 2, 2008, the Company shall pay Executive a cash lump sum
equal to the amount of the expenses incurred during the Waiting
Period that would have otherwise been payable during such Waiting
Period.”



15.18 Notwithstanding anything herein to the contrary, if Executive is a “specified employee”
within the meaning of Code Section 409A on the date of his separation from service, any payments or
benefits hereunder that are deferred compensation under Code Section 409A will not be paid during
the Waiting Period and on January 2, 2008 all payments and benefits that were payable during the
Waiting Period will be paid to Executive in a cash lump sum payment and thereafter payments and
benefits will be paid as provided herein.



15.19 This Agreement may be executed in more than one counterpart, each of which shall be
deemed to be an original, and all of which together shall constitute one and the same document.



[SIGNATURE PAGE FOLLOWS]





1






IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this
Agreement as of the date indicated below



	 	 	 
	
 
	 	ENCYSIVE PHARMACEUTICALS INC.

(“Company”)

By: /s/ George W. Cole
	
 
	 	 
	BRUCE D. GIVEN, M.D. (“Executive”)

/s/ Bruce D. Given, M.D.

	 	Name: George W. Cole

—

Title: President & CEO
	 

	 	 
	Date: 12 July 2007

	 	Date:July 12, 2007
	 

	 	 






	 	 	 
	 	 	THE STATE OF COLORADO	 	 	§
	 	 	 	 	 	§
	 	 	COUNTY OF SUMMIT	 	 	§





BEFORE ME, the undersigned authority, on this day personally appeared Bruce D. Given, M.D.
who, being by me first duly sworn, upon his oath deposed and stated that he has read the foregoing
Agreement; that he has been advised to discuss the provisions of this Agreement with an attorney of
his choice before signing it; that he fully understands the terms and conditions of this Agreement;
that he is legally competent to execute this Agreement; and that he has voluntarily executed this
Agreement for the purposes and consideration therein expressed.



Given under my hand and seal of office on this 12th day of July, 2007.



[SEAL]



/s/ Susan C. Price     



NOTARY PUBLIC IN AND FOR



THE STATE OF Colorado



	 	 	 
	THE STATE OF TEXAS

COUNTY OF HARRIS

	 	§

§

§






BEFORE ME, the undersigned authority, on this day personally appeared George W. Cole, who
being by me first duly sworn, upon his oath deposed and stated that he is the President and Chief
Executive Officer of Encysive Pharmaceuticals Inc. (the “Company”); that he has read the foregoing
Agreement; that he has discussed the provisions of this Agreement with any attorney of his choice;
that he fully understands the terms and conditions of this Agreement; that he is legally competent
and fully authorized to execute this agreement on behalf of the Company; and that he has
voluntarily executed this Agreement for the purposes and consideration therein expressed.



Given under my hand and seal of office on this 12th day of July, 2007.



[SEAL]



/s/ Heather P. Woltz     



NOTARY PUBLIC IN AND FOR



THE STATE OF TEXAS



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Exhibit A





	 	1.	 	Executive’s unused accrued vacation as of Date of Termination: 40 hours at
$235.57 per hour for a total of $9,422.80.






	 	2.	 	Executive’s bonus payment pursuant to Section 6.3(a)(2) of Termination
Agreement: Such amounts, if any, will be paid in accordance with Section 6.3(a)(2) of
the Termination Agreement.






	 	3.	 	Executive’s compensation previously deferred and earned and not yet paid by the
Company pursuant to 6.3(a)(3) of Termination Agreement: $0.00.






	 	4.	 	Executive’s expense reimbursement pursuant to Section 6.3(b) of Termination
Agreement: Executive will submit his final expense reports on or before August 31,
2007, and Executive and Company will each use reasonable efforts to cooperate so that such
reports will be sumitted on or before August 31, 2007. Within 30 days after receipt of
such reports, the Company will pay such expenses, which are reimbursable under Company
policy in effect on the Date of Termination up to a maximum amount of $30,000.






	 	5.	 	Benefits to continue pursuant to Section 6.3(c) of Termination Agreement (subject
to terms and conditions stated therein): Medical, dental and vision coverage for Dr.
Given and his wife and son.






	 	6.	 	Salary continuation amount pursuant to Section 6.3(d) of Termination Agreement:
The Company is required to pay the Executive $40,833.33 per month for period of 12 months
following Date of Termination. The Company has previously paid the Executive his salary
through June 29, 2007. No other payments of salary continuation shall be made during the
Waiting Period (as defined in Section 15.17 hereof), and on January 2, 2008, the Company
shall pay a cash lump sum (subject to payroll and withholding deductions) equal to the
amount of salary continuation that would have otherwise been paid during the Waiting
Period. Thereafter, the remaining salary continuation payments will made for the balance
of the 12 month period at the rate of $40,833.33 (before withholding) per month such that
at the end of such period the Company has paid Executive in the aggregate payments equal to
$490,000 (before withholding) of salary continuation payments under this Agreement.






	 	7.	 	Stock option/restricted stock to vest pursuant to Section 6.3(e) of Termination
Agreement: In the event of a Change in Control (as that term is defined in each of the
Plans during the twelve month period following the Executive’s Date of Termination (as that
term is defined in the Separation Agreement and Release to which this Exhibit is attached),
the Executive’s outstanding unvested stock options/restricted stock will accelerate in
accordance with the terms of the applicable Plan. Exhibit B hereto lists all of the
Executive’s outstanding stock option and restricted stock awards and their respective
vesting schedules.






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