Exhibit 10.25
EXECUTION VERSION
June 5, 2009
Via Hand Delivery
Scott B. Townsend
36 Ridge Hill Road
Sudbury, MA 01776
RE: Separation Letter Agreement and General Release
Dear Scott:
     This Separation Letter Agreement and General Release (the “Agreement”) sets
forth and confirms the terms of the separation package that you are eligible to
receive pursuant to Sections 4.4 and 5.5 of your Amended and Restated Employment
Agreement dated November 6, 2007 as amended by the First Amendment to Amended
and Restated Employment Agreement dated September 16, 2008 (together, the
“Employment Agreement”) by and between Cornerstone Therapeutics Inc. (formerly
known as Critical Therapeutics, Inc.) (the “Company”) and you (“you” or the
“Employee”) as a result of the Company’s termination of your employment with the
Company without “cause.” To receive the severance benefits, you must enter into
a binding severance agreement drafted by and satisfactory to the Company. You
will have twenty-one (21) days from your receipt of this Agreement to consider
it and once you have signed this Agreement, you will have seven (7) days to
revoke your acceptance as set forth in Paragraphs Nos. 8 and 19 below. Please
note that the earliest you can accept this Agreement is the Termination Date (as
defined below). Please read this Agreement carefully and review it with your
attorney. If you are willing to agree to its terms, please sign and date in the
space provided on the signature page and return it to the Chief Financial
Officer of the Company at the address set forth in Paragraph No. 21.
     1. Whether or not you choose to timely sign and return this Agreement, your
employment with the Company will end as of June 5, 2009 (the “Termination
Date”), provided that you satisfactorily perform your job and comply with
Company policies and practices as determined in good faith by the Company
through the Termination Date. Whether or not you choose to sign this Agreement,
you will be paid on or about the Termination Date the following:

  (a)   any of your unpaid current base salary through the Termination Date,
less lawful deductions; and     (b)   your unused and accrued vacation as of the
Termination Date.

     2. After the Termination Date, except as provided below, you 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 reimbursements, life insurance or disability insurance programs, except
as required by federal or state law or as otherwise described to you in writing
in such plan or program documents. You will receive, under separate cover,
information concerning your right to continue your health insurance and dental
insurance benefits after that date in accordance with COBRA. You must complete
the COBRA enrollment documents within the required period in order to continue
this coverage. You will also receive, under

 

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separate cover, an information statement regarding the vesting of your stock
options agreements and restricted stock as of the Termination Date. Under the
terms of the Company’s stock option plans, you cease further vesting of stock
options upon the Termination Date except as otherwise provided in your
Employment Agreement.
     3. In consideration for timely signing of this Agreement and the promises
made herein, the Company agrees to provide you with the monies and benefits in
accordance with the terms of Section 5.5 of the Employment Agreement set forth
in Attachment A (attached hereto) provided that you do not revoke your
acceptance of this Agreement pursuant to Paragraph No. 19 below. The
distribution of all severance payments and benefits provided in Attachment A
shall be subject to the provisions of Attachment B (attached hereto).
     4. You also understand and agree that you would not receive the monies
and/or benefits specified in Paragraph No. 3 above, except for your execution of
this Agreement and the fulfillment of the promises contained herein. You
acknowledge and agree that such payments shall be provided in lieu of any
severance plan of the Company, any benefits under your Employment Agreement and
any benefits under your employment offer letter. You acknowledge and agree that
you are solely responsible for the following:

  (a)   properly and timely electing to continue health and dental insurance
coverage under COBRA; and     (b)   promptly notifying the Company if you become
eligible for coverage under the group health plan of another employer prior to
twelve (12) months after the Termination Date.

     5. In consideration of the payments to be made by the Company to you as set
forth in Paragraph No. 3 above and the promises contained in this Agreement, you
hereby voluntarily and of your own free will agree to release, remise, forever
discharge and hold harmless the Company, its past, present and future
subsidiaries, corporate affiliates, parent companies, and its and/or their past,
present and future officers, directors, stockholders, trustees, successors and
assigns, agents and employees (each in both their individual and corporate
capacities) from any and all claims, charges, complaints, demands, actions,
causes of action, suits, rights, debts, sums of money, costs, accounts,
reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities, and expenses (including
attorneys’ fees and costs), of every kind and nature, whether known or unknown,
that might be asserted arising out of your employment by and separation from the
Company, including, but not limited to, (1) The National Labor Relations Act, as
amended; (2) Title VII of the Civil Rights Act of 1964, as amended; (3)
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
(4) the Age Discrimination in Employment Act of 1967, as amended (“ADEA”);
(5) the Older Workers Benefit Protection Act (“OWBPA”); (6) the Immigration
Reform Control Act, as amended; (7) the Employee Retirement Income Security Act
of 1974, 29 U.S.C. § 1001, et seq ., except for any claims for benefits vested,
due and owing; (8) the Occupational Safety and Health Act, as amended; (9) the
Civil Rights Act of 1866, 29 U.S.C. § 1981, et seq ; (10) the Rehabilitation Act
of 1973, 29 U.S.C. § 701, et seq .; (11) the Americans With Disabilities Act of
1990, as amended; (12) the Civil Rights Act of 1991; (13) the Workers Adjustment
and Retraining Notification Act, as amended; (14) the Family and Medical Leave
Act, as amended; (15) Section 806 of the Corporate and Criminal Fraud
Accountability Act of 2002; (16) Executive Order 11141; (17) the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq .; (18) the Massachusetts Law Against
Discrimination, G.L. c. 151B; (19) the Massachusetts Wage and Hour Laws, G.L. c.
151; (20) the Massachusetts Privacy Statute, G.L. c. 214, § 1B; (21) the
Massachusetts Labor and

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Industries Act, M.G.L., c. 149, § 1 et seq . (including without limitation the
Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et seq.) (22) the
Massachusetts Sexual Harassment Statute, G.L. c. 214 § 1C; (23) the
Massachusetts Civil Rights Act, G.L. c. 12, § 11H; (24) the Massachusetts Equal
Rights Act, G.L. c. 93, § 102; (25) any other federal or state law, regulation,
or ordinance; (26) any public policy, contract, tort, or common law; (27) 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 (except
as set forth in Attachment A ); and (28) any allegation for costs, fees, or
other expenses including attorneys’ fees incurred in these matters. You agree
that neither this Agreement, nor the furnishing of consideration for this
Agreement, shall be deemed or construed at anytime for any purpose as an
admission by the Company of any liability or unlawful conduct of any kind.
Provided, however, nothing in this Agreement prevents you from filing,
cooperating with, or participating in any proceeding before the EEOC or a State
Fair Employment Practices Agency (except that you acknowledge that you may not
be able to recover any monetary benefits in connection with any such claim,
charge or proceeding) nor challenging under the OWBPA the enforceability of the
waiver and release of ADEA claims set forth in this Agreement.
     6. You acknowledge and reaffirm your post-employment obligations under
Sections 7 (non-compete) and 8 (proprietary information and developments) of the
Employment Agreement.
     7. You will be afforded ten (10) calendar days after the Termination Date
to submit to the Company, to the attention of the Human Resources Administrator
in the manner set forth in Paragraph No. 21, any and all documentation for any
expense reimbursements you claim are owed to you in conjunction with your
employment with the Company. You will be reimbursed for any reasonable business
expenses incurred and approved through the Termination Date consistent with
Company policy, subject to the submission of the properly documented business
expense reports and according to the Company’s normal expense reimbursement
practices and subject to the provisions of Attachment B .
     8. You are afforded up to twenty-one (21) calendar days from receipt of
this Agreement to consider the meaning and effect of this Agreement and general
release and you acknowledge that you have been given twenty-one (21) calendar
days to consider it. You agree that any modifications, material or otherwise, do
not restart or affect in any manner the original consideration period for the
separation proposal made to you. You are advised to consult with an attorney
regarding this Agreement and you acknowledge that you have had the opportunity
to do so.
     9. You agree to return to the Company by the Termination Date all Company
property and equipment in your possession or control, including but not limited
to, all documents, samples of ZYFLO® (zileuton tablets) and ZYFLO CR® (zileuton
extended-release tablets), tapes, notes, computer files, equipment, physician
lists, employee lists, lab notebooks, files, computer equipment, security
badges, telephone calling cards, credit cards, and other information or
materials (and all copies) which contain confidential, proprietary or non-public
information of the Company. You further agree to leave intact all electronic
Company documents on the Company’s servers or computers, including those which
you developed or helped develop during your employment.
     10. [Intentionally left blank]
     11. Nothing herein limits either party’s right, where applicable, to file
or participate in an investigative proceeding of any federal, state or local
governmental agency, provided however, that by signing this Agreement, you waive
the right to seek or receive any money damages or other relief of any nature
whatsoever from the Company based upon any claim that might be asserted arising
out of your employment at the Company. You further affirm that you have been
paid and have received all leave

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(paid or unpaid), compensation, wages, bonuses, commissions, severance and/or
benefits to which you may be entitled and that no other leave (paid or unpaid),
compensation, wages, bonuses, commissions, severance and/or benefits are due to
you, except as provided in this Agreement. You furthermore affirm that you have
no known workplace injuries or occupational diseases. You also affirm that you
have not been retaliated against for reporting any allegations of wrongdoing by
the Company or its officers, including any allegations of corporate fraud.
     12. This Agreement, which includes a general release, represents the
complete agreement between you and the Company, and fully supersedes any prior
agreements or understandings between the parties (including, without limitation,
your Employment Agreement, except that your post-employment obligations
thereunder shall survive in full force and effect). You acknowledge that you
have not relied on any representations, promises, or agreements of any kind made
to you in connection with your decision to sign this Agreement, except those set
forth herein.
     13. This Agreement, which shall be construed under the law of the
Commonwealth of Massachusetts, shall be binding upon the parties and may not be
abandoned, supplemented, changed or modified in any manner, orally or otherwise,
except by an instrument in writing of concurrent or subsequent date signed by a
duly authorized representative of the parties hereto. This Agreement is binding
upon and shall inure to the benefit of the parties and their respective agents,
assigns, heirs, executors, successors and administrators. The parties hereby
consent to jurisdiction in the Commonwealth of Massachusetts for purposes of any
litigation relating to this Agreement and agree that any litigation by or
involving them relating to this Agreement shall be conducted in the state or
federal courts of the Commonwealth of Massachusetts. Pursuant to Section 17 of
the Employment Agreement, the Company will reimburse you for all reasonable
legal fees incurred in enforcing or contesting the Agreement if you prevail on
such claim or claims.
     14. Should any provision of this Agreement be declared or be determined by
any court of competent jurisdiction to be illegal or invalid, the validity of
the remaining parts, terms, or provisions shall not be affected thereby and said
illegal and invalid part, term or provision shall be deemed not to be a part of
this Agreement. The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against any of the parties.
     15. You understand and agree that as a condition for payment to you of the
monetary consideration herein, for a period of twenty-four (24) months after the
Termination Date, you shall not make any false, disparaging or derogatory
statements in public or private to any person or media outlet regarding the
Company or any of its current, past or future directors, officers, employees,
agents, or representatives or the Company’s business affairs and financial
condition, except if testifying truthfully under oath pursuant to a lawful court
order or subpoena. If you receive such a court order or subpoena, to the extent
allowed by law, you or your attorney shall provide the Company with a copy of
such court order or subpoena within two (2) business days of your receipt of it
and shall notify the Company of the content of any testimony or information to
be provided and shall provide the Company with copies of all documents to be
produced. The Company agrees that for a period of twenty-four (24) months after
the Termination Date the Company shall not make any false, disparaging or
derogatory statements in public or private to any person or media outlet
regarding the Employee, except if testifying truthfully under oath pursuant to a
lawful court order or subpoena.
     16. No delay or admission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

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     17. You further agree to provide the following consulting, advisory and
related services:

  (a)   To the extent mutually convenient to you and the Company, you agree to
provide up to an additional ten (10) days of such business consulting services
for the Company as may be reasonably requested by the Company or its employees,
representatives or agents during the period from the Termination Date through
the date that is six months after the Termination Date, including, but not
limited to preparing to-do lists, answering questions, preparing memos, and
updating or completing projects; provided, however, the Company shall not ask
you to provide legal services or to perform legal work and the Company would not
be your client in an attorney-client sense (but you agree that you would be
governed by Section 8 (proprietary information and developments) of the
Employment Agreement). The Company shall pay you a per diem consulting fee as a
consultant for such time provided under this Paragraph No. 17(a) at an amount
equal to $2,000. The Company acknowledges and agrees that the Employee’s ability
perform this consulting at the request of the Company will be limited if the
Employee accepts part-time or full-time employment with a third party. The
Company acknowledges and agrees that you are providing such services as an
accommodation to the Company, that you do not have malpractice insurance and
that you will not be providing legal services to the Company. The Company agrees
that you are providing only business consulting related to business matters that
you worked on while an employee of the Company and that the Company shall not
pursue a malpractice claim for monetary damages against you.     (b)   The
Company acknowledges and agrees that the Employee’s ability to travel at the
request of the Company under this Paragraph No. 17 will be limited if the
Employee accepts part-time or full-time employment with a third party or the
Employee has vacation or travel plans or family commitments. If the Employee is
required to travel at the request of the Company after the Termination Date, the
Company agrees to pay any reasonable business expenses incurred in connection
with such travel provided that the travel is approved by the Company and such
reimbursement shall be made consistent with Company policy, subject to the
submission of the properly documented business expense reports and according to
the Company’s normal expense reimbursement practices and subject to the
provisions of Attachment B.

     Notwithstanding anything in this Paragraph No. 17 to the contrary, the
Company and the Employee intend that the Termination Date shall be the date of
the Employee’s “separation from service” for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended, and guidance issued thereunder
(“Section 409A”). In accordance with such intent, the parties agree that in no
event will the consulting services required by this Paragraph 17 result in the
Employee’s performing services for the Company at a rate that exceeds 20% of
Employee’s level of bona fide services to the Company over the 36-month period
preceding to the Termination Date (or such shorter period during which the
Employee has been employed by the Company), as determined in accordance with
Section 409A.
     18. You acknowledge and agree that notwithstanding the provisions of
Attachment B (i) neither the Company nor the Company’s legal counsel makes any
representation or warranty if any provisions of this Agreement or any payments
made pursuant to this Agreement are, or may be

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determined to constitute, “nonqualified deferred compensation” within the
meaning of Section 409A and (ii) the Company shall have no liability to you or
any other person if any payments pursuant to the provisions of this Agreement
are determined to constitute nonqualified deferred compensation subject to
Section 409A and do not satisfy the requirements of Section 409A.
Notwithstanding any other provision of this Agreement, the Company has the right
to and the Company intends to comply with all withholding and reporting
obligations under Section 409A. You are advised to consult with an attorney
regarding this Agreement and you acknowledge that you have had the opportunity
to do so.
     19. You may revoke this Agreement for a period of seven (7) calendar days
following the day you execute this Agreement. Any revocation within this period
must be submitted, in writing, to Chief Financial Officer, at the Company, and
state, “I hereby revoke my acceptance of the Separation Letter Agreement and
General Release.” The revocation must (i) be personally delivered to the
following address:
 
Cornerstone Therapeutics Inc.
Attention: David J. Price, Executive VP Finance & CFO
1255 Crescent Green Drive, Suite 250
Cary, North Carolina 27518
or (ii) sent by certified mail, return receipt requested, postmarked within
seven (7) calendar days of execution of this Agreement. This Agreement shall not
become effective or enforceable until the revocation period has expired. If the
last day of the revocation period is a Saturday, Sunday, or legal holiday in
North Carolina or the state in which you primarily reside, then the revocation
period shall not expire until the next following day which is not a Saturday,
Sunday, or legal holiday.
     20. For the convenience of the parties, this Agreement may be executed by
facsimile and in counterparts, each of which shall be deemed to be an original,
and both of which taken together, shall constitute one agreement binding on both
parties.
     21. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon the day
that is three (3) days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown below (or at such other address or addresses as either party
shall designate to the other in accordance with this Paragraph No. 21):

  (a)   If to the Company:

 
Cornerstone Therapeutics Inc.
Attention: David J. Price, Executive VP Finance & CFO
1255 Crescent Green Drive, Suite 250
Cary, North Carolina 27518

  (b)   If to the Employee:

 
Scott B. Townsend
36 Ridge Hill Road
Sudbury, MA 01776

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     22. The Employee acknowledges and agrees that for a period of one (1) year
after the Termination Date, he will not, directly or indirectly, either alone or
in association with others, recruit, solicit, induce, hire or engage as an
independent contractor or attempt to recruit, solicit, induce, hire or engage as
an independent contractor, any person who then is or was employed by the Company
except for an individual whose employment with the Company has been terminated
by (i) the employee for any reason other than Good Reason (as defined in the
Company’s 2004 Stock Incentive Plan) for a period of six (6) months or longer,
(ii) by the Company for any reason, or (iii) by the employee for Good Reason.
[Remainder of this page is intentionally left blank.]

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     Cornerstone Therapeutics Inc. would like to extend its appreciation to you
for your past service, and its sincere hope for success in your future
endeavors.

              Very truly yours,
 
            CORNERSTONE THERAPEUTICS INC.
 
       
 
  By:   /s/ David Price
 
  Name:  
 
David Price
 
  Title:   Executive Vice President, Finance, and Chief Financial Officer

ACCEPTED AND AGREED:
     You have been advised in writing that you have up to twenty-one
(21) calendar days from receipt of this Separation Letter Agreement and General
Release (the “Agreement”) to consider this Agreement. You have also been advised
to consult with an attorney prior to the execution of the Agreement.
     Having elected to execute this Agreement, to fulfill the promises set forth
herein, and to receive thereby the sums and benefits set forth in
Paragraph No. 3 of the Agreement, you freely and knowingly, and after due
consideration, enter into this Agreement intending to waive, settle, and release
all claims you have or might have against Cornerstone Therapeutics Inc. You have
carefully read this Agreement and understand the contents herein.

             
Date: June 5, 2009
      /s/ Scott B. Townsend    
 
     
 
Name: Scott B. Townsend    

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ATTACHMENT A
DESCRIPTION OF SEVERANCE BENEFITS

1.   Severance Payments. The Company will pay to you the following lump sum
amounts, less lawful deductions, pursuant to the Employment Agreement: (a)
$275,000 (which equals one times your annualized base salary); and (b)
$41,136.99, which equals 156/365 of the Target Cash Bonus (as defined in your
Employment Agreement) for 2009), such payments shall be made on the last day of
the first payroll-cycle after the expiration of the revocation period provided
in Paragraph No. 19 of the Separation Letter Agreement and General Release (the
“Agreement”) to which this Attachment A is attached.

2.   Continuation of Benefits. The Company will pay on a monthly basis beginning
on the last day of the first payroll-cycle after the expiration of the
revocation period provided in Paragraph No. 19 the Agreement an amount equal to:

  (a)   one hundred percent (100%) of your monthly health, dental and vision
COBRA premiums for you and your dependents, if any, if you properly elect to
continue health, dental and vision insurance under COBRA; and     (b)   $144.37
(which represents one hundred percent (100%) of the cost of the monthly premiums
paid by the Company for life insurance and disability insurance for you in the
month preceding the end of your employment);

such payments under Subsections 2(a) and 2(b) of this Attachment A to continue
until the COBRA Contribution End Date (defined for purposes of this Agreement as
the date that is the earlier of (i) twelve (12) months after the Termination
Date or (ii) the last day of the first month that you are eligible for other
employer-sponsored health coverage).

3.   Stock Options and Restricted Stock . You will have until ninety (90) days
after your Termination Date to exercise any vested stock option rights you may
have; provided, however, if any of your stock options have a full option term
that expires prior to such date, then you will have only until the last day of
the full option term to exercise such stock option. One hundred percent (100%)
of all unvested options granted to you shall become vested and exercisable and
all restricted stock awards granted to you as of the Termination Date shall vest
and become nonforfeitable upon the expiration of the revocation period provided
in Paragraph 19 of this Agreement; provided, however, only thirty-five percent
(35%), or 52,053 shares, of the restricted stock granted pursuant to the
Restricted Stock Agreement dated September 16, 2008 (the “Restricted Stock
Agreement”) shall vest and become nonforfeitable, and the 59,488 shares of
restricted stock that remain unvested after application of such thirty-five
percent (35%) acceleration (the “Unvested Shares”) shall be forfeited.
Notwithstanding the foregoing, in consideration of the severance benefits
herein, you have agreed to, and you do hereby, forfeit all unexercised stock
options under the Company’s 2000 Equity Incentive Plan, as amended, 2003 Stock
Incentive Plan, as amended, and 2004 Stock Incentive Plan, as amended, effective
as of the expiration of the revocation period provided in Paragraph 19 of this
Agreement.       The Company agrees, as contemplated by the Employment
Agreement, that one hundred percent (100%) of the Unvested Shares shall become
exercisable if the Termination Date is within a “Change of Control Period” (as
defined in the Employment Agreement).

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4.   Outplacement Services . The Company will provide you with up to three
(3) months of reasonable outplacement services as arranged for by the Company
and that are directly related to your termination with the Company; provided,
however, the amount paid for any such services by the Company shall be in an
amount not to exceed $5,000 and the services must be provided to you within
twelve (12) months following the Termination Date.

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ATTACHMENT B
PAYMENTS SUBJECT TO SECTION 409A
Subject to the provisions in this Attachment B , any severance payments or
benefits under the Agreement shall begin only upon the date of your “separation
from service” (determined as set forth below) which occurs on or after the date
of termination of your employment. The following rules shall apply with respect
to distribution of the payments and benefits, if any, to be provided to you
under the Agreement:

1.   If, as of the date of your “separation from service” from the Company, you
are a “specified employee” (within the meaning of Section 409A), then:

  a.   Each installment of the severance payments and benefits due under the
Agreement that, in accordance with the dates and terms set forth herein, will in
all circumstances, regardless of when the separation from service occurs, be
paid within the Short-Term Deferral Period (as hereinafter defined) shall be
treated as a short-term deferral within the meaning of Treasury
Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under
Section 409A. For purposes of this Agreement, the “Short-Term Deferral Period”
means the period ending on the later of the fifteenth day of the third month
following the end of your tax year in which the separation from service occurs
and the fifteenth day of the third month following the end of the Company’s tax
year in which the separation from service occurs; and     b.   Each installment
of the severance payments and benefits due under the Agreement that is not
described in paragraph 1(a) above and that would, absent this subsection, be
paid within the six-month period following your “separation from service” from
the Company shall not be paid until the date that is six months and one day
after such separation from service (or, if earlier, your death), with any such
installments that are required to be delayed being accumulated during the
six-month period and paid in a lump sum on the date that is six months and one
day following your separation from service and any subsequent installments, if
any, being paid in accordance with the dates and terms set forth herein;
provided , however , that the preceding provisions of this sentence shall not
apply to any installment of severance payments and benefits if and to the
maximum extent that that such installment is deemed to be paid under a
separation pay plan that does not provide for a deferral of compensation by
reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating
to separation pay upon an involuntary separation from service). Any installments
that qualify for the exception under Treasury
Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day
of your second taxable year following your taxable year in which the separation
from service occurs.

2.   The determination of whether and when your separation from service from the
Company has occurred shall be made and in a manner consistent with, and based on
the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely
for purposes of this paragraph 2, “Company” shall include all persons with whom
the Company would be considered a single employer under Section 414(b) and
414(c) of the Code.

3.   All reimbursements and in-kind benefits provided under the Agreement shall
be made or provided in accordance with the requirements of Section 409A to the
extent that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during Employee’s lifetime (or during a shorter

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    period of time specified in this Agreement), (ii) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (iii) the reimbursement
of an eligible expense will be made on or before the last day of the calendar
year following the year in which the expense is incurred and (iv) the right to
reimbursement is not subject to set off or liquidation or exchange for any other
benefit.

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