Document:

Exhibit 10.1

 

TREVENA, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Agreement is entered into as of March 31, 2014 (the “Effective Date”) by and between Trevena, Inc. (the “Company”), a Delaware corporation, and Robert Prachar (“Executive”).

 

WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits.

 

Accordingly, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:

 

1.     Duties and Scope of Employment.

 

(a)           Positions and Duties.  As of the Effective Date, Executive will serve as Senior Vice President, Commercial and Corporate Strategy of the Company.  Executive will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position within the Company, as will reasonably be assigned to Executive by the Company’s President and CEO, to whom Executive will report.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

 

(b)           Obligations.  During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Company’s Board of Directors (the “Board”).  Nothing in this Agreement or elsewhere shall prevent Executive from managing his personal investment and affairs, or from engaging in charitable and community affairs, so long as such activities do not either individually or in the aggregate interfere with the performance of his duties for the Company.

 

2.     At-Will Employment.  The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice.  Executive’s at-will employment status may not be changed except by way of written agreement signed by Executive and an authorized officer of the Company.

 

3.     Compensation.

 

(a)           Base Salary.  During the Employment Term, the Company will pay Executive an initial annualized salary of $280,000 as compensation for services (the “Base Salary”).  The Base Salary shall be paid in equal installments in accordance with the Company’s normal payroll practices and subject to required withholding and deductions.  The Base Salary will be subject to review and adjustments will be made based upon the Company’s normal performance review practices.

 

(b)           Bonus.  For each calendar year ending during the Employment Term, Executive will be eligible to receive an annual bonus in a target amount of 35% of the Base Salary

 

 

upon achievement of performance objectives, which shall be determined by the Company (the “Target Bonus”).  For 2014, such objectives will be established within the first thirty (30) days after the Effective Date.  For each subsequent calendar year, these objectives will be established within 90 days after the start of such calendar year.  For 2014, Executive shall be eligible for a pro rated bonus based on the Effective Date.  The Company reserves the right to modify the terms of bonus eligibility, the Target Bonus and other components of bonus compensation and criteria from year to year.

 

(c)           Equity Award. Executive will be eligible to receive awards of stock options, restricted stock or other equity awards based upon Executive’s performance, as determined by the Board from time to time.  The Board or its committee will determine in its discretion whether and when Executive will be granted any such equity awards.

 

4.     Company Policies and Employee Benefits.  During the Employment Term, Executive will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, any such group medical, dental, vision, disability, life insurance, and flexible-spending account plans.  All matters of eligibility for coverage and benefits under any benefit plan shall be determined in accordance with the provisions of such plan.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

 

5.     Vacation.  While employed pursuant to this Agreement, Executive shall be eligible to take vacation subject to the Company’s vacation policy.

 

6.     Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy.

 

7.     Termination of Employment.  The provisions of this Section 7 govern the amount of compensation or benefit, if any, to be provided to Executive upon termination of employment and do not affect the right of either party to terminate the employment relationship at any time for any reason.

 

(a)       Termination for other than Cause, Death or Disability.  If at any time (x) the Company terminates Executive’s employment with the Company other than for Cause (as defined below), death or disability, or (y) Executive terminates his employment under this Agreement for Good Reason, then, subject to Section 8, Executive will be entitled to receive, less applicable withholdings and deductions:

 

(i)  An amount equal to nine (9) months of his annualized Base Salary in effect at the time of termination.  This amount shall be paid to Executive in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver.

 

(ii) Accelerated vesting as to that number of unvested shares subject to  any outstanding equity awards held by Executive at the time of termination that would

 

 

have otherwise vested if Executive had remained a Company employee for nine (9) months following the termination date.

 

(iii) A pro-rata bonus for the calendar year of termination, determined by multiplying Executive’s target bonus for such year (assuming employment for the entire year) by a fraction whose numerator is the number of days that Executive was employed during such year and whose denominator is the total number of days in such year, payable within 60 days following the date of Executive’s termination of employment.

 

(iv) If Executive timely elects continued coverage under COBRA for Executive and Executive’s covered dependents under the Company’s group health plans following such termination of employment, the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive and Executive’s eligible dependents on the termination date, as and when due to the insurance carrier or COBRA administrator (as applicable), until the earliest of (A) nine (9) months from the effective date of such termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the termination date through the earliest of (A) through (C), the “COBRA Payment Period”). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period.

 

(b)           Termination In Connection With or Following a Change of Control.  In the event that either (x) the Company terminates Executive’s employment with the Company other than for Cause, death or disability (A) within the thirty (30) day period prior to a Change of Control, or (B) within the period between the Company’s execution of a letter of intent for a proposed Change of Control which proposed Change of Control is later consummated (a “Designated Change of Control”) and the consummation of such Designated Change of Control, or (C) within the twelve (12) month period after a Change of Control, or (y) Executive resigns for Good Reason within twelve (12) months after a Change of Control, then, in addition to the payments set forth in Section 7(a) above, and subject to Section 8 below, Executive shall also be entitled to, less applicable withholdings and deductions:

 

(i) immediate and full accelerated vesting of all unvested shares subject to any outstanding equity awards held by Executive at the time of termination; provided, however, that such acceleration shall not be interpreted to extend the post-termination

 

 

exercise period of any stock option held by Executive at the time of termination, unless otherwise approved by the Board;

 

(ii) an amount equal to Executive’s Target Bonus in effect at the time of termination, payable within 60 days following the date of Executive’s termination of employment;

 

(iii)  an amount equal to twelve (12) months of his annualized Base Salary in effect at the time of termination payable in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver;

 

(iv) if Executive timely elects continued coverage under COBRA for Executive and Executive’s covered dependents under the Company’s group health plans following such termination of employment, the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive and Executive’s eligible dependents on the termination date, as and when due to the insurance carrier or COBRA administrator (as applicable), until the earliest of (A) twelve (12) months from the effective date of such termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the termination date through the earliest of (A) through (C), the “COBRA Payment Period”). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period;

 

and

 

(v) a pro-rata bonus for the calendar year of termination, determined by multiplying Executive’s target bonus for such year (assuming employment for the entire year) by a fraction whose numerator is the number of days that Executive was employed during such year and whose denominator is the total number of days in such year, payable within 60 days following the date of Executive’s termination of employment.

 

(c)           Termination for Cause, Death or Disability; Voluntary Termination.  If Executive’s employment with the Company terminates voluntarily by Executive (other than for Good Reason as set forth in the preceding subsection (b)), for Cause by the Company or due to Executive’s death or disability, then (i) all vesting will terminate immediately with respect to Executive’s outstanding equity awards, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned).

 

 

(d)           Termination by Mutual Consent.  If at any time during the course of this Agreement the parties by mutual consent decide to terminate this Agreement, they shall do so by separate agreement setting forth the terms and condition of such termination.

 

8.     Conditions to Receipt of Benefits under Section 7.

 

(a)           Release of Claims.  The receipt of any payment or benefit pursuant to Section 7 will be subject to Executive signing and not revoking a release and waiver of all claims in the form attached hereto as Exhibit B (or in such other form as may be specified by the Company in order to comply with then-existing legal requirements to effect a valid release of claims) (the “Release and Waiver”) within the applicable time period set forth therein, but in no event later than forty-five days following termination of employment.  No payment or benefit pursuant to Section 7 will be paid or provided until the Release and Waiver becomes effective.

 

(b)           Other Conditions.  The receipt of any payment or benefits pursuant to Section 7 will be subject to Executive not violating the PIIA (as defined below), returning all Company property, and complying with the Release and Waiver; provided, however, that Company must provide written notice to Executive of the condition under this Section 8(b) that could prevent the disbursement of any payment or benefits under Section (7) within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by Executive within thirty (30) days of such written notice.  Executive understands and agrees that payment or benefits received pursuant to Section 7 are in lieu of and not in addition to any severance or similar benefits that may be provided to other employees of the Company pursuant to a Company policy or plan.

 

(c)           Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under Section 7 above that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.  Pay pursuant to Section 7 above, to the extent of payments made from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination of service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that, if  Executive is a “specified employee” within the meaning of the aforesaid Section of the Code at the time of such termination from employment, payments be delayed until the earlier of six months after termination of employment or Executive’s death (such applicable date, the

 

 

“Specified Employee Initial Payment Date”).  Notwithstanding any other payment schedule set forth in herein, none of the payments under Section 7 will be paid or otherwise delivered prior to the effective date of the Release and Waiver.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding sentence, on the first regular payroll pay day following the effective date of the Release and Waiver, the Company will pay Executive the payments Executive would otherwise have received under Section 7 on or prior to such date but for the delay in payment related to the effectiveness of the Release and Waiver, with the balance of the payments being paid as originally scheduled.  Notwithstanding anything to the contrary set forth herein, if any of the payments or benefits set forth in Section 7 constitute “deferred compensation” within the meaning of Section 409A of the Code and the period during which Executive may review, execute and revoke the Release and Waiver begins in one taxable year and ends in a second taxable year, such payments and benefits shall commence or be made in the second taxable year.

 

(d)           Cooperation With the Company After Termination of Employment. Following termination of the Executive’s employment for any reason, upon request by the Company, Executive will fully cooperate with the Company (at the Company’s reasonable expense) in all matters reasonably relating to the winding up of pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other employees as may be designated by the Company.

 

9.     Definitions.

 

(a)           Cause.  For purposes of this Agreement, “Cause” is defined as (i) an act of dishonesty by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) Executive’s gross misconduct, (iv) Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with the Company, or (v) Executive’s willful breach of any obligations under any written agreement or covenant with the Company.

 

(b)           Change of Control.  For purposes of this Agreement, “Change of Control” of the Company is defined as:

 

(i)    any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; provided, however; that sales of equity or debt securities to investors primarily for capital raising purposes shall in no event be deemed a Change of Control; or

 

(ii)   a change in the composition of the Board occurring within a two-year period, as a result of which less than a majority of the directors are Incumbent Directors.  “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not

 

 

include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); provided, however; that no change in the composition of the Board in connection with the sale of equity or debt securities to investors primarily for capital raising purposes shall be deemed a Change of Control; or

 

(iii)  the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

(iv)  the date of the consummation of the sale or disposition by the Company of all or substantially all the Company’s assets.

 

(c)           Good Reason.  For purposes of this Agreement, a resignation for “Good Reason” is defined as the resignation by Executive within thirty (30) days following the end of the Cure Period (defined below), if any of the following events occur without Executive’s express written consent following a Change of Control:  (i) the Company reduces the amount of the Base Salary, other than pursuant to a reduction that also is applied to substantially all other executives of the Company, (ii) the Company fails to pay the Base Salary or other benefits required to be provided by the Company hereunder, (iii) the Company materially reduces Executive’s core functions, duties or responsibilities in a manner that constitutes a demotion, or (iv) any change of Executive’s principal office location to a location more than thirty (30) miles from the Company’s office at 1018 West 8th Avenue, King of Prussia, PA; provided, however, that Executive must provide written notice to the Company of the condition that could constitute “Good Reason” within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days of such written notice (the “Cure Period”).

 

10.  Confidential Information.  Executive agrees to enter into the Company’s standard Employee Proprietary Information, Inventions and Non-Solicitation Agreement (the “PIIA”), in substantially the form attached hereto as EXHIBIT A, upon commencing employment hereunder.

 

11.  No Conflict with Existing Obligations.  Executive represents that his performance of all the terms of this Agreement and, as an executive officer of the Company, do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.

 

12.  Parachute Payments.

 

(a)           If any payment or benefit Executive would receive pursuant to a Change of Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the

 

 

“Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment occurs):  reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless Executive elects in writing a different order for cancellation.

 

(b)           The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group affecting the Change of Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

 

(c)           The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

13.  Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

 

 

14.       Notices.  All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a nationally recognized commercial overnight service, specifying next day delivery, with written verification of receipt, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

 

If to the Company:

 

1018 West 8th Avenue, Suite A, King of Prussia, PA 19406

 

If to Executive:

 

at the last residential address known by the Company.

 

15.       Severability.  In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

 

16.       Arbitration.

 

(a)                                 Arbitration.  In consideration of Executive’s employment with the Company, the Company and Executive agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s employment with the Company or the termination of Executive’s employment with the Company, including any breach of this Agreement, but not including those arising out of, relating to, or resulting from the PIAA, will be subject to binding arbitration.  Disputes which Executive agrees to arbitrate, and thereby agrees to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, discrimination or wrongful termination and any statutory claims.  Executive further understands that this Agreement to arbitrate also applies to any disputes that the Company may have with Executive.

 

(b)                                 Procedure.  Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes (“the Rules”).  Executive agrees that the arbitrator will administer and conduct any arbitration in a manner consistent with the Rules.

 

(c)                                  Remedy.  Except as provided by this Agreement and by the Rules, including any provisional relief offered therein, arbitration will be the sole, exclusive and final remedy for any dispute between Executive and the Company.  Accordingly, except as provided for by the Rules and

 

 

this Agreement, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.

 

(d)                                 Administrative Relief.  Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Equal Employment Opportunity Commission or the workers’ compensation board.  This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

 

(e)                                  Voluntary Nature of Agreement.  Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that Executive is waiving Executive’s right to a jury trial.  Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

 

17.       Integration.  This Agreement, together with the PIIA and the other documents referred to in this Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.

 

18.       Waiver of Breach.  The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

 

19.       Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

20.       Governing Law.  This Agreement will be governed by the laws of the Commonwealth of Pennsylvania.

 

21.       Acknowledgment.  Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from Executive’s private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

 

22.       Counterparts.  This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

 

 

COMPANY:

 

TREVENA, INC.

 

 

	
By:
    	
/s/   Maxine Gowen
    	
 
    	
Date:
    	
3/28/3014
    
	
 
    
	
Title: President & CEO
    
	
 
    
	
 
    
	
/s/ Robert Prachar
    	
 
    	
Date:
    	
3/27/2014
    
	
Robert Prachar
    

 

 

EXHIBIT A

 

PIIA

 

 

EXHIBIT B

Release and Waiver

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In consideration of the payments and other benefits set forth in the Employment Agreement of March 31, 2014 to which this form is attached, I, Robert Prachar, hereby furnish TREVENA, INC. (the “Company”), with the following release and waiver of claims (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) 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 prior to or on the date that I sign this Agreement (collectively, the “Released Claims”).  The Released Claims include, but are not limited to:  (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (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, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance, including, but not limited to, the State of Pennsylvania or any subdivision thereof; and any public policy, contract, tort, or common law.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

In granting the release herein, which includes claims that may be unknown to me at present, I acknowledge that I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party 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 would have materially affected the terms of such release.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an

 

 

attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.

 

I acknowledge my continuing obligations under my Employee Proprietary Information, Inventions and Non-Solicitation Agreement (the “PIIA”).  Pursuant to the PIIA I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance benefits I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my PIIA.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

	
Date:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Robert PracharEXHIBIT 10.1

 

American Science and Engineering, Inc.

 

2014 Change in Control & Severance Benefit Agreement

 

This SEVERANCE BENEFIT & CHANGE IN CONTROL Agreement (the “Agreement”) is entered into on April 1, 2014 between American Science and Engineering, Inc. (the “Company” or the “Employer,” either of which term shall include any successor by merger, consolidation, sale of substantially all of the Company’s assets or otherwise) and                          (“Executive”) to be effective on April 1, 2014 (the “Effective Date”).

 

1.                                      Purpose of this Agreement.  The Company hereby agrees to provide severance and change in control benefits to Executive on the terms and conditions set forth in this Agreement.  These benefits are in lieu of any benefits that would otherwise be payable to Executive under the severance pay plan, if any, maintained by the Company for the benefit of senior executives or other Company employees, or by statute.  This severance agreement does not represent an employment contract for any definite term or period, which means that either Executive or the Company can terminate Executive’s employment at any time, for any reason or no reason, and with or without notice.

 

2.                                      Term of Agreement.  The Agreement shall become effective on the Effective Date and shall terminate on March 31, 2015, other than as specified in this section and Section 9 hereof; provided that this Agreement shall automatically be extended for successive one year terms unless the Compensation Committee of the Board provides Executive with written notice to the contrary at least 30 days before the date the Agreement would otherwise be so extended.  Such notice, in the sole discretion of the Compensation Committee, may provide that the term will not be extended in the future, and/or that there shall be no further automatic extensions of the term.  Nonextension of the Agreement does not terminate Executive’s employment nor entitle him or her to any payments under this Agreement, nor are any such payments due on a termination of employment or resignation for Good Reason that occurs after the term of this Agreement. The Compensation Committee may not provide a notice of nonextension during a Pending Change in Control (as defined in Section 4(a).

 

3.                                      Definitions. The following terms as used in this Agreement shall have the following meanings:

 

(a)                                 “Affected Award” means each Stock-Based or Cash-Based Award held by Executive immediately prior to a Change in Control Qualifying Termination, other than Cash-Based Awards being used on an annual basis in place of an annual bonus described in Section 4(b)(i)(2) or incorporated into Section 5(i), as applicable.

 

(b)                                 “Affiliate” means any business entity in which the Company holds, directly or indirectly, an equity, profits, or voting interest of 30% or more, and includes any subsidiary.

 

(c)                                  “Base Salary” means the highest annual rate of base salary payable to Executive by the Company during the one-year period ending on Executive’s Date of Termination or, if higher and in connection with a Change in Control Qualifying Termination, the highest annual rate of base salary payable to Executive by the Company during the one-year period ending on the Change in Control.

 

(d)                                 “Board” means the Board of Directors of the Company.

 

(e)                                  “Cause” means, for purposes of this Agreement, as determined by the Board in its reasonable judgment: (i) Executive’s material failure to perform (other than by reason of disability), or material negligence in the performance of, his or her duties and responsibilities to the Company or any of its Affiliates; (ii) material breach by Executive of any provision of this Agreement or any other agreement with the Company or any of its Affiliates; (iii) other conduct by Executive that is reasonably likely to be materially harmful to the business, interests or reputation of the Company or any of its Affiliates; (iv) fraud, embezzlement or other material dishonesty by Executive with respect to the Company or any of its Affiliates; (v) Executive’s conviction of, or pleading guilty or no contest to, any felony or other crime involving moral turpitude; or (vi) a breach of any confidentiality/non-competition/ non-solicitation agreement. With respect to a breach of (i), (ii), or (iii), Executive shall be given 30 days, after written notice of such breach, to cure a breach to the reasonable satisfaction of the Company.

 

(f)                                   “Change in Control” or “Change in Control of the Company” shall mean the occurrence hereafter of any of the following:

 

(i)                                     Any Person, other than the Company or an Affiliate, becomes a beneficial owner (within the meaning of Rule 13d-3, as amended, as promulgated under the Securities Exchange Act of 1934, as

 

 

amended), directly or indirectly, in one or a series of transactions, of securities representing more than 50% of the combined voting power of the Company’s then outstanding securities;

 

(ii)                                  The consummation of a merger or consolidation of the Company with any other Person, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

 

(iii)                               The closing of a sale or other disposition by the Company of all or substantially all of the assets of the Company; or

 

(iv)                              Individuals who constitute the Board of Directors on the date hereof (“Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any individual who becomes a member of the Board subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors shall be treated as an Incumbent Director unless he or she assumed office as a result of an actual or threatened election contest with respect to the election or removal of directors;

 

provided, in each case, that such event also constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5) if necessary to avoid the imposition of additional taxes under Section 409A (as defined below).

 

(g)                                  “Change in Control Qualifying Termination” means a termination of employment if, during the period of 24 months following a Change in Control either the employment of Executive is terminated by the Employer for any reason other than for Cause or Executive terminates his or her employment with the Employer for “Good Reason” (as defined in Section 3(l) below).

 

(h)                                 “Client” means any Person who is, or within the preceding 12 months was, a client, customer or portfolio company of the Company or any of its Affiliates.

 

(i)                                     “Code” means the Internal Revenue Code.

 

(j)                                    “Company” means American Science & Engineering, Inc.

 

(k)                                 “Date of Termination” means the date on which Executive’s employment terminates.

 

(l)                                     “Good Reason” means (i) any action by the Company which results in a material adverse change in Executive’s reporting relationship, authority, duties or responsibilities; provided, however, that a sale or transfer of less than all or substantially all of the business of the Company or any of its subsidiaries or other reduction of less than all or substantially all of its business or that of its subsidiaries, or the fact that the Company has become a subsidiary of another company or that the securities of the Company are no longer publicly traded, shall not be taken into account when determining whether a material adverse change in Executive’s authority, duties or responsibilities has occurred; (ii) any material reduction in Executive’s Base Salary or any materially adverse change in the amount of Executive’s annual bonus opportunity (where a “material reduction” or “materially adverse change” would be a reduction of the relevant compensation by 10% or more); or (iii) the Company requires Executive to be based at any office or location that is more than 25 miles distant from Executive’s base office or work location immediately prior to relocation, except if such new location is closer to Executive’s residence at the time such requirement is imposed.  Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute Good Reason unless (x) Executive gives the Company the notice of termination no more than 90 days after the initial existence of such event or circumstance, (y) such event or circumstance has not been fully corrected within 30 days of the Company’s receipt of such notice and (z) the Date of Termination occurs within 30 days following the end of the correction period if the Good Reason has not been corrected.

 

(m)                             “Non-Competition Period” means the period while Executive is employed by the Company and for one year after Executive’s employment terminates.

 

(n)                                 “Outstanding Company Common Stock” means the outstanding shares of common stock of the Company.

 

 

(o)                                 “Outstanding Company Voting Securities” means the outstanding voting securities of the Company entitled to vote generally in the election of directors.

 

(p)                                 “Person” means any individual, entity or other person, including a group within the meaning of Sections 13(d) or 14(d)(2) of the Securities Exchange Act of 1934.

 

(q)                                 “Qualifying Termination” means either (a) a termination of Executive’s employment by the Employer for any reason other than for Cause or (b) the Executive terminates his or her employment with the Employer for “Good Reason” (as defined in Section 3(l) above).

 

(r)                                    “Short Term Incentive” means payments made pursuant to the Company’s short-term incentive plan.

 

(s)                                   “Stock-Based or Cash-Based Award” means any option, stock appreciation right, restricted stock, restricted stock unit, or cash-based award granted by the Company to Executive pursuant to the Company’s 2005 Equity & Incentive Plan or any successor plan or agreement, or any other Company equity compensation plan or agreement in which Executive participated.

 

4.                                      Change in Control Severance Benefits.

 

(a)                                 Executive agrees that once any Person other than the Company, a direct or indirect subsidiary of the Company, or an employee benefit plan of the Company or any such subsidiary begins a tender or exchange offer or a solicitation of proxies from the Company’s security holders or takes other actions to effect a “Change in Control,” as hereinafter defined, Executive will not voluntarily terminate his or her employment with the Company (or its Affiliates) until such Person has abandoned or terminated such efforts to effect a Change in Control or until a Change in Control has occurred (the period after the potential Change in Control begins and before it is abandoned, terminated, or completed being the “Pending Change in Control”).  In the event that Executive terminates his or her employment (with or without Good Reason) during the period described in the preceding sentence and prior to the Change in Control, he/she will not be entitled to any payments or benefits under this Agreement, other than those described in Section 4(b)(i).

 

(b)                                 In the case of a Change in Control Qualifying Termination, Executive shall receive the following payments and benefits, subject to the limitation set forth in Section 6:

 

(i)  Accrued Compensation.  The Company shall pay to Executive in a single lump sum, within 10 days following the Date of Termination (or such earlier date as required by law), the sum of (1) all salary and commissions earned by Executive as of the Date of Termination but not yet paid and (2) Executive’s accrued but unpaid bonuses and accrued but unused vacation earned through the Date of Termination. The foregoing amounts are referred to as “Accrued Compensation.”  In addition, the Company shall pay to Executive in cash within five business days of the Date of Termination, reimbursement for any unpaid, valid business expenses that are approvable in accordance with Company policy and that have been submitted by the Date of Termination (and shall pay any valid business expenses timely submitted after such date in accordance with Company policy).

 

(ii)  Severance Pay.  The Company shall pay to Executive in a single lump sum an amount equal to two times the sum of Executive’s annualized Base Salary plus the target Short Term Incentive amount.  Subject to any delay under Section 10, payment will be made in the first payroll after the Release Effective Date (as defined below).

 

(iii)  COBRA Premiums.  If and while Executive is eligible for and elects COBRA coverage, the Company shall pay 100% of the premium for COBRA coverage for Executive, Executive’s spouse and his or her qualifying dependents, until the shorter of 18 months following the Date of Termination or the date COBRA eligibility ends, as such premiums become due, provided that the Company’s payment for COBRA coverage shall only apply if and while permitted under applicable tax laws as nondiscriminatory.

 

(iv)  Stock-Based and Cash-Based Awards.

 

(1)                                 To the extent not already vested and exercisable, each Affected Award shall become fully vested and exercisable upon the occurrence of the Change in Control Qualifying Termination, subject to compliance, if necessary, with Section 409A (as defined below).  In the event Executive holds an Affected Award requiring exercise, the Company shall give

 

 

Executive adequate notice and opportunity to exercise the Affected Award.  Notwithstanding the foregoing, to the extent permitted by the equity plan under which an Affected Award was granted, nothing in this Agreement shall preclude the Company from accelerating the vesting and exercisability of any or all Affected Awards to an earlier period, and terminating unexercised awards as provided under the equity plan.

 

(2)                                 Notwithstanding the provisions of this Section 4 to the contrary, if an Affected Award held by Executive is not assumed or replaced, or to be assumed or replaced, upon a Change in Control, each Affected Award held by such Executive, whether or not he or she has experienced a Qualifying Termination, shall become fully vested and, where applicable, exercisable, effective immediately prior to the Change in Control.

 

(v) Additional Discretionary Payments.  The Company may make an additional cash or stock settlement at the sole discretion of the Board.

 

5.                                      Severance Benefits.

 

In the case of a Qualifying Termination that is not a Change in Control Qualifying Termination, Executive shall receive the following payments and benefits, subject to the limitation set forth in Section 6:

 

(i)  Accrued Compensation.  The Company shall pay to Executive in a single lump sum, within 10 days following the Date of Termination (or such earlier date as required by law) the Accrued Compensation and shall deal with expense reimbursements as provided in Section 4(b)(i).

 

(ii)  Severance Pay.  The Company shall pay to Executive in a single lump sum an amount equal to one times the Executive’s annualized Base Salary.  Subject to any delay under Section 10, payment will be made in the first payroll after the Release Effective Date.

 

(iii)  COBRA Premiums.  The Company shall provide paid COBRA coverage as set forth in Section 4(b)(iii), for a maximum of 12 months.

 

6.                                      Limitation on Payments.  If any payments pursuant to the Agreement would be subject to tax under Section 4999 of the Internal Revenue Code (the “ Payments”), then Executive shall receive either (i) the full Payments or (ii) such lesser amount of the Payments as would yield the greatest net amount to Executive on an after-tax basis (applying the then highest aggregate marginal tax rates and Section 4999).  If a reduction of the Payments is required pursuant to subpart (ii), then the Payment will be reduced in the following order: (i) any vesting of equity awards where the equity awards will, after the Change in Control, not be for publicly-traded stock nor cashed out in the Change in Control, (ii) any taxable benefits, (iii) any cash payments (including any cash payments by reason of equity awards cashed out by reason of the Change in Control when and if those payments are counted for purposes of Section 4999), (iv) any nontaxable benefits, and (v) any vesting of equity awards that will either be cashed out in the Change in Control or be equity awards with respect to publicly traded stock, in each case in clauses (i) through (v) in reverse order beginning with payments or benefits that are to be paid the farthest in time from the date that triggers the applicability of the excise tax, to the extent necessary to maximize the reduced Payment.  The Company may elect to contest at its expense any initial IRS determination with respect to an Executive.  Executive shall cooperate reasonably with the Company in any effort by the Company to contest an IRS determination under this paragraph, including by the making of such filings and appeals as the Company may reasonably require, but nothing herein shall be construed as requiring Executive to bear any cost or expense of such a contest or in connection therewith to compromise any tax item (including without limitation any deduction or credit) other than the Section 4999 tax and related interest and penalties, if any, that are the subject of the contested IRS determination.  In the event of any underpayment or overpayment under this Agreement, as determined by the nationally recognized accounting firm, the amount of such underpayment or overpayment shall be promptly paid to Executive or refunded to the Company, as the case may be, with interest at 120% of the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code.

 

All tax determinations under this Section 6 shall be made at the Company’s expense by a nationally recognized accounting firm selected by the Company in its reasonable discretion.  Any good faith determinations of this accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

7.                                      Noncompetition.  During the Non-Competition Period, Executive shall not, directly or indirectly, whether as owner, partner, investor (nothing contained in this Agreement, however, shall prevent Executive from passive ownership of two percent or less of the voting stock of any publicly traded company (other than the Company)), consultant, agent, employee, co-venturer or otherwise, compete with the Company or any of its Affiliates within the United States or in any country in which the Company or any of its Affiliates is then doing business. Specifically, but without limiting the foregoing,

 

 

Executive agrees not to engage in any manner in any activity that is directly or indirectly competitive or potentially competitive with the business of the Company or any of its Affiliates as conducted or under consideration at any time during Executive’s employment. Executive further agrees that while Executive is employed by the Company and during the Non-Competition Period, Executive will not hire or attempt to hire any employee of the Company or any of its Affiliates, assist in such hiring by any Person, encourage any such employee to terminate his or her relationship with the Company or any of its Affiliates, or solicit or encourage any customer or vendor of the Company or any of its Affiliates to terminate or diminish its relationship with them, or, in the case of a customer, to conduct with any Person any business or activity which such customer conducts or could conduct with the Company or any of its Affiliates.

 

8.                                      Payment Obligations Absolute.  Upon a Change in Control Qualifying Termination or a Qualifying Termination, the Company’s obligations to pay the benefits described in Section 4 or 5 as applicable shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company or any Affiliate may have against any Executive.  In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of the Agreement, and in no event shall the amount of any payment hereunder be reduced by any compensation earned by Executive as a result of employment by another employer.

 

9.                                      Amendment; Survival.  This Agreement may be amended or modified only by a written instrument signed by Executive and by a expressly authorized representative of the Company.  The provisions of Section 7 will survive any termination or nonextension of this Agreement.  The Company may not terminate this Agreement within two years following a Change in Control or provide a notice of nonrenewal effective within such two years, other than a termination or notice of nonrenewal following a cessation of employment that is not a Change in Control Qualifying Termination.

 

10.                               Withholding; Section 409A.  All payments and benefits hereunder shall be subject to reduction for applicable tax withholdings.  If and to the extent any portion of any payment, compensation or other benefit provided to Executive in connection with his or her employment termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and Executive is a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company in accordance with its procedures, by which determination Executive hereby agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the earlier of (i) the expiration of the six month period measured from the date of Executive’s “separation from service” (as determined under Section 409A) or (ii) the tenth day following the date of Executive’s death following such separation from service (the “New Payment Date”).  The aggregate of any payments that otherwise would have been paid to Executive during the period between the date of separation from service and the New Payment Date shall be paid to Executive in a lump sum in the first payroll period beginning after such New Payment Date, and any remaining payments will be paid on their original schedule.  This Agreement is intended to comply with the provisions of Section 409A and this Agreement shall, to the extent practicable, be construed in accordance therewith.  Terms defined in this Agreement will have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A.  In any event, the Company makes no representations or warranty and will have no liability to Executive or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

 

11.                               Legal Fees.  The Company agrees to pay all costs and expenses (including without limitation fees and expenses of counsel) incurred by the Executive in connection with efforts to enforce his or her rights under this Agreement to the extent that the Executive prevails on any material issue raised in such action.

 

12.                               Source of Payment.  Nothing herein shall be construed as establishing a trust or as requiring the Company to set aside funds to meet its obligations hereunder.  Notwithstanding the foregoing, if the Board in its discretion so determines, the Company may establish a so-called “rabbi trust” or similar arrangement to assist it in meeting any such obligations that it may have.

 

13.                               Required Release.  The Company’s obligation to provide severance pay and other benefits under this Agreement, however, is subject (a) to Executive’s signing a release of claims in favor of the Company in the form to be provided by the Company that becomes enforceable within 60 days (or such shorter period as the Company specifies) following the Date of Termination (the “Release”); and (b) to Executive’s meeting in full his or her obligations under any other agreements in effect between Executive and the Company.  The “Release Effective Date” is the date the Release becomes enforceable, provided that if the 60 day period for providing an enforceable Release extends into a calendar year subsequent to the year containing the Date of Termination, the Release Effective Date will be no earlier than the first business day of such subsequent year.  The Executive must also acknowledge his or her continuing responsibility to honor any non-compete and non-solicitation obligations previously undertaken by Executive for a period of one year from the Termination Date or such other period as the obligations specify.

 

 

14.                               Nondisparagement.  Executive agrees to not make any oral or written communication to any person or entity which has the effect of damaging the reputation of, or otherwise working in any way to the detriment of, the Company, its officers, directors or management other than as required by law or in performance of his or her duties to the Company (such as in a performance review).

 

15.                               Notices.  Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person or deposited in the United States mail, postage prepaid, registered or certified, and addressed to Executive at his or her last known address on the books of the Company or, in the case of the Company, at its principal place of business, attention of the President, or to such other address as either party may specify by notice to the other actually received.

 

16.                               Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of Executive’s severance from employment with the Company and its Affiliates, including, as of the Effective Date, the prior terms of Executive’s Change in Control & Severance Benefit Agreement with the Company.

 

17.                               Severability.  Each provision of this Agreement shall be considered severable such that if any one provision or clause conflicts with existing or future applicable law, or may not be given full effect because of such law, this shall not affect any other provision of the Agreement which, consistent with such law, shall remain in full force and effect.  All surviving clauses shall be construed so as to effectuate the purpose and intent of the parties.

 

18.                               Headings.  The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

 

19.                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

 

20.                               Governing Law.  This Agreement shall be governed by the laws of the Commonwealth of Massachusetts without regard to its conflicts of laws principles.

 

Signatures on Following Page

 

 

	
EXECUTIVE
    	
 
    	
AMERICAN   SCIENCE AND ENGINEERING, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:

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