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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:
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(i)
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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;
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(ii)
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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
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(iii)
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administer Employee’s stock options, if any, in accordance
with the applicable stock option plan(s) and/or agreement(s).
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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)
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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;
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(ii)
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characterize the Employee’s termination of employment as a
resignation;
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(iii)
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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
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(iv)
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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.
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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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