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SEVERANCE AGREEMENT AND GENERAL RELEASE

Release Agreement

SEVERANCE AGREEMENT AND GENERAL RELEASE | Document Parties: CORNERSTONE THERAPEUTICS INC You are currently viewing:
This Release Agreement involves

CORNERSTONE THERAPEUTICS INC

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Title: SEVERANCE AGREEMENT AND GENERAL RELEASE
Date: 12/29/2008
Industry: Biotechnology and Drugs     Law Firm: Smith Anderson     Sector: Healthcare

SEVERANCE AGREEMENT AND GENERAL RELEASE, Parties: cornerstone therapeutics inc
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Exhibit 10.1 SEVERANCE AGREEMENT AND GENERAL RELEASE           This SEVERANCE AGREEMENT AND GENERAL RELEASE ( the " Agreement ") is made and entered into by George Esgro (" Employee ") and Cornerstone Therapeutics Inc., a Delaware corporation (the " Company ").           The Company’s subsidiary currently employs Employee as Vice President, Sales and Marketing. The parties desire to terminate the employment relationship. Employee also desires severance benefits. The parties have negotiated the terms of the termination and have agreed upon acceptable terms as described herein. The parties now desire to terminate their employment relationship on mutually agreeable terms and avoid all litigation relating to the employment relationship and its termination.           Employee represents that he has carefully read the entire Agreement, understands its consequences, and voluntarily enters into it.           In consideration of the above and the mutual promises set forth below, Employee and the Company agree as follows:           1. SEPARATION; PAYMENTS WHETHER SIGN OR NOT . Whether or not Employee chooses to sign this Agreement, Employee’s employment with the Company will terminate, effective December 10, 2008 (the " Effective Termination Date "). Whether or not Employee chooses to sign this Agreement, the Company will:

 

(i)

 

pay Employee’s unpaid base salary, through the Effective Termination Date, less lawful deductions, payable on the first regular payday following the Effective Termination Date;

 

     

 

(ii)

 

pay Employee for untaken and accrued vacation as of the Effective Termination Date, less lawful deductions, payable on the first regular payday following the Effective Termination Date; and

 

     

 

(iii)

 

administer Employee’s stock options, if any, in accordance with the applicable stock option plan(s) and/or agreement(s).

          2. SEVERANCE BENEFITS . In consideration for Employee signing of this Agreement, and in compliance with the promises made herein, the Company agrees that, provided that Employee does not revoke acceptance pursuant to Section 10 of this Agreement, the Company will:

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(i)

 

pay Employee severance pay in the amount of $91,000 (less lawful deductions) payable in a lump sum on the first regular payday after the revocation period set forth in paragraph 10 below expires;

 

     

 

(ii)

 

characterize the Employee’s termination of employment as a resignation;

 

     

 

(iii)

 

amend Employee’s post-employment non-competition obligations under the terms of Section 5.4 of the Agreement regarding Employment, Employee Duties, Ownership of Employee Developments and Confidentiality dated March 3, 2008 between Employee and Cornerstone BioPharma, Inc., a subsidiary of the Company (the " Employee Duties Agreement ") such that such Employee’s non-competition obligations for the period of three (3) months after the Effective Termination Date shall be as set forth in Section 16 of this Agreement. Employee agrees and reaffirms that the other terms and conditions of the Employee Duties Agreement remain in full force and effect for the full term stated therein; and

 

     

 

(iv)

 

accelerate the vesting as to 25% of any of Employee’s unvested options as of the Effective Termination Date. Otherwise, such Employee’s stock options will be administered in accordance with the applicable stock option plan(s) and/or agreement(s). Any remaining unvested options after such acceleration will be terminated and be automatically forfeited to the Company. Employee acknowledges and agrees that any vested stock options that remain unexercised after the expiration of the time period for exercise provided under the applicable stock option plan(s) and/or agreement(s) shall be immediately and automatically forfeited to the Company, and that Employee shall have no further rights with respect to such shares.

          The severance benefits afforded under this Agreement are in lieu of any other compensation or benefits to which Employee otherwise might be entitled. The distribution of all severance payments and benefits provided under this Agreement shall be subject to the provisions of Attachment A attached hereto to this Agreement.           3. ACCRUED VACATION . Whether or not the Employee chooses to sign this Agreement, the Company will pay Employee for any accrued but untaken vacation as of the Effective Termination Date.           4. BENEFITS . After the Effective Termination Date, except as provided below, Employee will not be entitled to receive any benefits paid by, or participate in any benefit programs offered by the Company to its employees, including, but not limited to, the Company’s 401(k) plan, stock option plans, employee stock purchase plans, bonus plans, commission plans, sales incentive plans, retention agreements, severance, expense reimbursement, vehicle reimbursement, life insurance or disability insurance programs, except as required by federal or state law. Employee will receive, under separate cover, information concerning the right to continue health insurance and dental insurance benefits after that date in accordance with COBRA. Employee must complete the COBRA enrollment documents within the required

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period in order to continue this coverage. Employee acknowledges and agrees that Employee is solely responsible for properly electing to continue health, dental and vision insurance coverage under COBRA.           5. EXPENSE REIMBURSEMENT . Employee will be afforded fifteen (15) calendar days after the Effective Termination Date to submit to the Company’s Human Resources Department at the address set forth in Section 10 of this Agreement, any and all documentation for any expense reimbursements Employee claims are owed to Employee in conjunction with his employment with the Company. Employee will be reimbursed for any reasonable business expenses incurred and approved through the Effective Termination Date consistent with Company policy, subject to the submission of the properly documented business expense reports.           6. RELEASE . In consideration of the benefits conferred by this Agreement, EMPLOYEE (ON BEHALF OF HIMSELF AND HIS ASSIGNS, HEIRS AND OTHER REPRESENTATIVES) RELEASES THE COMPANY, ITS PREDECESSORS, SUCCESSORS AND ASSIGNS AND ITS AND/OR THEIR PAST, PRESENT AND FUTURE OWNERS, PARENTS, SUBSIDIARIES, AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, EMPLOYEE BENEFIT PLANS (TOGETHER WITH ALL PLAN ADMINISTRATORS, TRUSTEES, FIDUCIARIES AND INSURERS) AND AGENTS ("RELEASEES") FROM ALL CLAIMS AND WAIVES ALL RIGHTS KNOWN OR UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE RELATING TO HIS EMPLOYMENT WITH THE COMPANY, ITS PREDECESSORS, SUBSIDIARIES OR AFFILIATES OR HIS SEPARATION THEREFROM arising before the execution of the Agreement, including but not limited to claims: (i) for discrimination, harassment or retaliation arising under federal, state or local laws prohibiting age (including but not limited to claims under the Age Discrimination in Employment Act of 1967 (" ADEA "), as amended), sex, national origin, race, religion, disability, veteran status or other protected class discrimination, harassment or retaliation for protected activity; (ii) for compensation and benefits (including but not limited to claims under the Employee Retirement Income Security Act of 1974, as amended, (" ERISA "), Fair Labor Standards Act of 1934 (" FLSA "), as amended, and similar federal, state, and local laws; (iii) under federal, state or local law of any nature whatsoever (including but not limited to constitutional, statutory, tort, express or implied contract or other common law); (iv) all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to stock or stock options; and (v) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters. The release of claims set forth in this paragraph does not apply to claims for workers’ compensation benefits or unemployment benefits filed with the applicable state agencies.           7. AGENCY CHARGES/INVESTIGATIONS . Nothing in this Agreement shall prohibit Employee from filing a charge or participating in an investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission or other governmental agency with jurisdiction concerning the terms, conditions and privileges of his employment; provided, however, that by signing this Agreement, Employee waives his right to, and shall not seek or accept, any monetary or other relief of any nature whatsoever in connection with any such charges, investigations or proceedings.

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          8. COVENANT NOT TO SUE . Employee will not sue Releasees on any matters relating to his employment arising before the execution of this Agreement, including but not limited to claims under the ADEA, or join as a party with others who may sue Releasees on any such claims; provided, however, this paragraph will not bar a challenge under the Older Workers Benefit Protection Act of 1990 (" OWBPA "), to the enforceability of the waiver and release of ADEA claims set forth in this Agreement, claims for workers’ compensation or unemployment benefits referenced in paragraph 4 above, or where otherwise prohibited by law. If Employee does not abide by this paragraph, then (i) he will return all monies received under this Agreement and indemnify Releasees for all expenses they incur in defending the action, and (ii) Releasees will be relieved of its obligations hereunder.           9. COMPANY INFORMATION AND PROPERTY . Employee shall not at any time after his employment terminates disclose, use or aid third parties in obtaining or using any confidential or proprietary Company information or such information of its parents, subsidiaries or affiliates. Confidential or proprietary information is information relating to the Company, parent, subsidiaries or affiliates or any aspect of its business which is not generally available to the public, the Company’s competitors, or other third parties, or ascertainable through common sense or general business or technical knowledge. Nothing in this Agreement shall relieve him from any obligations under any previously executed confidentiality, proprietary information or secrecy, non-competition or non-solicitation agreements.           All records, files or other materials maintained by or under the control, custody or possession of the Company or its agents in their capacity as such shall be and remain the Company’s property. Upon the Company’s request, Employee shall: (i) return all Company property (including, but not limited to, credit cards; keys; company car; cell phones; computer hardware and software; records, files, documents, company manuals, and other documents in whatever form they exist, whether electronic, hard copy or otherwise and all copies, notes or summaries thereof) which he received in connection with his employment; (ii) bring all such records, files, and other materials up to date before returning them; and (iii) fully cooperate with the Company in winding up his work and transferring that work to those individuals designated by the Company.           10. RIGHT TO REVIEW AND REVOKE . The Company delivered this Agreement to Employee on December 10, 2008 by hand delivery and desires that Employee have adequate time and opportunity to review and understand the consequences of entering into it. Accordingly, the Company advises Employee to consult with his attorney prior to executing it and that he has 21 days within which to consider it. Additionally, Employee may not execute this Agreement prior to the Effective Termination Date. In the event that Employe


 
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