EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the “ Agreement ”), is effective as
of 03/01/2006 (the “ Effective Date ”) by and
between Cornerstone BioPharma, Inc., a Delaware corporation (the
“ Company ”), and Craig Collard (the “
Executive ”), an individual residing in North
Carolina.
WHEREAS, the
Company wishes to employ the Executive, and the Executive desires
to accept employment with the Company, upon the terms and
conditions of this Agreement.
NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises herein, and
of other good and valuable consideration, including the employment
of the Executive by the Company and the compensation to be received
by the Executive from the Company from time to time, and
specifically the compensation to be received by the Executive
pursuant to Section 4 hereof, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1.
Employment . The Company hereby employs the Executive and
the Executive hereby accepts employment as President/CEO of the
Company upon the terms and conditions of this Agreement.
2.
Duties . The Executive shall faithfully perform all duties
of the Company related to the position or positions held by the
Executive, including but not limited to all duties set forth in
this Agreement and/or in the Bylaws of the Company related to the
position or positions held by the Executive and all additional
duties that are prescribed from time to time by the Board of
Directors of the Company (the “ Board ”) or
other designated officers of the Company. The Executive shall
devote the Executive’s full time and attention to the
performance of the Executive’s duties and responsibilities on
behalf of the Company and in furtherance of its best interests;
provided, however, that the Executive, subject to the
Executive’s obligations hereunder, shall also be permitted to
make personal investments, perform reasonable volunteer services
and, with the prior consent of the Company, serve on outside boards
of directors for non-profit corporations. The Executive shall
comply with all Company policies, standards, rules and regulations
(the “ Company Policies ”) and all applicable
government laws, rules and regulations that are now or hereafter in
effect. The Executive acknowledges receipt of copies of all written
Company Policies that are in effect as of the date of this
Agreement.
3.
Term . Unless earlier terminated as provided herein, the
initial term of this Agreement shall commence on the Effective Date
and shall continue until 12/31/2006. Thereafter, this Agreement
shall automatically renew on a year-to-year basis on the same terms
and conditions set forth herein unless: (a) earlier terminated
or amended as provided herein or (b) either party gives
written notice of non-renewal at least sixty (60) days prior
to the end of the initial term or any renewal term of this
Agreement. The initial term of this Agreement and all renewals
thereof are referred to herein as the
“Term.”
4.
Compensation . During the Term, as compensation for the
services rendered by the Executive under this Agreement, the
Executive shall have previously received or be entitled to receive
the following (all payments are subject to applicable
withholdings):
(a)
Base Salary . The Executive shall receive a monthly salary
of $23,792.08 (equal to an annual salary of $285,504.96) payable in
accordance with the then-current standard payroll policies of the
Company or as otherwise agreed to by the parties. The
Executive’s salary may be increased from time to time by the
Board.
(b)
Bonuses . The Executive shall be eligible to participate in
all bonus or profit sharing plans adopted by the Board. The amount
awarded to the Executive under any profit sharing or bonus plan
shall be in the discretion of the Board or any committee
administering such plan, based on its assessment of the
Executive’s and the Company’s performance during the
relevant period, but it is the expectation of the Company that any
such bonus would be in the range of 0% to 50% of the
Executive’s annual base salary.
(c)
Options . On 01/17/2006, the Executive was granted an option
to purchase up to 50,000 shares of the Common Stock of Cornerstone
BioPharma Holdings, Inc., a Delaware corporation and parent
corporation of the Company (“ Parent ”), at an
exercise price of $.10 per share. The terms and conditions of such
option, including vesting, are governed by a[n] [Nonstatutory]
[Incentive] Stock Option Agreement issued by the Company to the
Executive under Parent’s Stock [Option] [Incentive]
Plan.
(d)
Restricted Stock . On 04/30/2005, the Executive purchased
14,700,000 shares of the Common Stock of Parent for $.01 per share.
The terms and conditions for such purchase were set forth in a
Stock Purchase Agreement entered into between Parent and the
Executive.
(e)
Benefits . The Executive shall be entitled to receive those
benefits provided from time to time to other executive employees of
the Company, in accordance with the terms and conditions of the
applicable plan documents; provided that, the Executive meets the
eligibility requirements thereof. All such benefits are subject to
amendment or termination from time to time by the Company without
the consent of the Executive or any other employee of the
Company.
(f)
Vacation . The Executive shall be entitled to four
(4) weeks paid vacation per calendar year (with the vacation
for any partial year being prorated) to be taken at such times as
may be approved by his/her supervisor. A maximum of five
(5) vacation days earned in one calendar year may be used in
the next subsequent calendar year. Upon the termination of the
Executive’s employment with the Company, cash shall be paid
in lieu of accrued but unused vacation.
(g)
Business Expenses . The Company shall pay, or reimburse the
Executive for, all reasonable expenses incurred by the Executive
directly related to conduct of the business of the Company;
provided that, the Executive complies with the Company’s
policies for the reimbursement or advancement of business expenses
that are now or hereafter in effect.
2
(h)
Automobile . The Executive shall have full use of that
vehicle the Executive is currently using, whether for business or
personal uses. The Company shall pay, or reimburse the Executive
for, the lease of financing payments, automobile insurance, taxes
and title fees associated with such vehicle. Upon termination of
employment with the Company, the Company shall pay, or reimburse
the Executive for the balance of the remaining lease payments, and
will assign and transfer title and other appropriate evidence of
ownership of the vehicle to the Executive in exchange for $100.00
paid by the Executive.
5.
Termination . This Agreement and the Executive’s
employment by the Company shall or may be terminated, as the case
may be, as follows:
(a)
Termination upon Expiration of the Term . This Agreement and
the Executive’s employment by the Company shall terminate
upon the expiration of the Term.
(b)
Termination by the Executive . The Executive may terminate
this Agreement and his employment by the Company thirty
(30) days after notice to the Company.
(c)
Termination by the Company . The Company may terminate this
Agreement and the Executive’s employment by the Company upon
notice to the Executive (or his personal
representative):
(i) at
any time and for any reason;
(ii) upon
the death of the
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