Exhibit 10.1

October 16, 2012

Via Hand Delivery

Vincent T. Morgus
201 Sedgemoor Drive
Cary, NC 27513  

Re: Separation Letter Agreement and General Release

Dear Vince:

As we have discussed, your employment with Cornerstone Therapeutics Inc. (the
“Company”) and your Executive Employment Agreement with the Company dated
February 1, 2011 (the “Employment Agreement”) are being terminated by the
Company “without cause.” This Separation Letter Agreement and General Release
(this “Agreement”) sets forth the terms of the separation package that you will
receive if you enter into this Agreement.  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 Paragraph No. 18 below. Please note that the earliest and latest 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 Director, Human Resources of the Company at
the address set forth in Paragraph No. 20.   

Whether or not you choose to timely sign and return this Agreement, your
employment with the Company will end as of October 19, 2012 (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, your unpaid current base
salary through the Termination Date, less lawful deductions, and $13,154.00 in
respect of twelve days of your accrued but unused vacation.

1. 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, equity incentive 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 or as set forth in Attachment A.  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.  Under the terms of the Company’s equity incentive
plans, and except as provided in Paragraph Nos. 4 and 5 of Attachment A, you
cease further vesting of restricted stock or stock options upon the Termination
Date.

2. In consideration for your timely signing of this Agreement, and the promises
made herein, the Company agrees to provide you with the monies and benefits set
forth in Attachment A (Description of Severance Benefits) (attached hereto)
provided that you do not revoke your acceptance of this Agreement pursuant to
Paragraph No. 18 below.   The distribution of all severance payments and
benefits provided in Attachment A shall be subject to the provisions of
Attachment B (Payments Subject to Section 409A) (attached hereto). 

3. You also understand and agree that you would not receive the monies and/or
benefits specified in Paragraph No. 2 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 or severance arrangements 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.

4. In consideration of the monies and benefits to be provided by the Company to
you as set forth in Paragraph No. 2 above and the promises contained in this
Agreement, you hereby voluntarily and of your own free will agree to release,
remise, and forever discharge 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) (hereinafter, the “Releasees”) 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) any
other federal or state law, regulation, or ordinance; (19) any public policy,
contract, tort, or common law; (20) 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
(21) any claim 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. You agree that neither this
Agreement, nor the furnishing of consideration for this Agreement, shall be
deemed or construed at any time for any purpose as an admission by the Company
of any liability or unlawful conduct of any kind.  The Company shall not contest
any claim for unemployment benefits made by you to the applicable state agency.

5. [Intentionally omitted]

6. You will not sue the Releasees on any matters relating to your 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, 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), from challenging under the OWBPA the
enforceability of the waiver and release of ADEA claims set forth in this
Agreement, or from pursuing claims for workers’ compensation or unemployment
benefits referenced in Paragraph No. 5 above, and this Paragraph will not apply
when prohibited by law. If you do not abide by this Paragraph, then: (i) you
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 their obligations hereunder.  

7. You acknowledge and reaffirm your post-employment obligations under Section 8
(proprietary information and developments) of the Employment Agreement. The
Company agrees to waive its right to enforce your obligations under Section 7
(non-compete) of that Agreement for so long as you do not accept employment with
Discovery Laboratories, Inc. 

8. You will be afforded ten (10) calendar days after the Termination Date to
submit to the Company, to the attention of the Director, Human Resources in the
manner set forth in Paragraph No. 20, 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 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.

9. 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 were provided with this Agreement at least
twenty-one (21) calendar days in advance of the Termination Date in order that
you will have an opportunity 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.

10. You agree that you will 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, tapes, notes, computer files, equipment, company
vehicles, 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. 

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 (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,
as modified by this Agreement, 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 State of North
Carolina, 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 State of North Carolina 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 State of North Carolina.

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, 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 or other legal requirements.  If you receive such
a court order or subpoena, to the extent reasonably feasible and allowed by law,
you or your attorney shall provide the Company with a copy of such court order
or subpoena within five (5) 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.  In
consideration for your execution of this Agreement, the Company agrees that it
will not make any false, disparaging or derogatory statements in public or
private to any person or media outlet regarding you or any of your acts
undertaken in connection with your employment by the Company.

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.

17. 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 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.

18. 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 in writing and must state, “I hereby revoke my acceptance of the
Separation Letter Agreement and General Release.”  The revocation must be
delivered to the following address:

Cornerstone Therapeutics Inc.
Attention:  Rhonda P. Downum, Director, Human Resources
1255 Crescent Green Drive, Suite 250
Cary, North Carolina 27518

This Agreement shall not become effective or enforceable until the revocation
period has expired.

19. 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.

20. Except as otherwise provided in this Agreement, 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. 20):

(a) If to the Company:

Cornerstone Therapeutics Inc.
Attention:  Rhonda P. Downum, Director, Human Resources
1255 Crescent Green Drive, Suite 250
Cary, North Carolina 27518

(b) If to the Employee:

Vincent T. Morgus
201 Sedgemoor Drive
Cary, NC 27513

21. You acknowledge and agree that for a period of one (1) year after the
Termination Date, you 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 (as
defined in the Company’s 2004 Stock Incentive Plan). For purposes of defining
the scope of this restrictive covenant, indirect recruitment, solicitation,
inducement, hiring or engaging of independent contractors or employees excludes
the recruiting, soliciting, inducing, hiring and engagement decisions of your
future employer in which your only material role was to set, approve, or modify
your future employer’s budgets, including but not limited to budgets for
recruitment and hiring prospective contractors and employees.

22. You agree not to disclose to anyone, either directly or indirectly, any
information whatsoever regarding the existence, terms or contents of this
Agreement, except your immediate family, attorneys, financial advisors,
accountants, and tax preparation professionals, provided that they agree to keep
such information strictly confidential, until such time as the existence of this
Agreement or such terms or contents of this Agreement are disclosed in the
Company’s filings with the U.S. Securities and Exchange Commission.  This
includes, but is not limited to, present or former employees of the Company and
other members of the public.  Violation of this Paragraph shall be deemed a
material breach of this Agreement. The Company agrees to file a Form 8-K
disclosing the terms of this Agreement by October 29, 2012. At any time after
the earlier of October 29, 2012 or the date on which such Form 8-K filing is
made by the Company, you shall be free to disclose the terms of this Agreement
at your sole discretion.

23. In consideration of your execution of this Agreement, the Company agrees to
release, remise, and forever discharge you from and refrain from suing you for
any and all claims, charges, complaints, demands, actions, causes of action or
suits, that the Company might otherwise initiate against you, arising out of
acts undertaken by you in connection with your employment by the Company, except
to the extent such acts involve fraud or moral turpitude. The Company also
agrees to maintain in full force and effect director and officer indemnity
insurance policies in substantially the form and substance as such insurance
exists today, for at least five (5) years, and to take such actions as may be
appropriate to ensure that such policies would, subject to their terms, provide
coverage for you against third party claims arising out of acts undertaken by
you in connection with your employment by the Company; provided, however, that
the Company may in lieu of such obligation purchase an extended reporting period
endorsement covering such claims. In the absence or insufficiency of such
insurance, the Company shall, to the fullest extent currently set forth in
Article Eighth of its Amended and Restated Certificate of Incorporation, as
amended to date, indemnify, defend, and hold you harmless from third party
claims arising from or relating to the acts undertaken by you in connection with
your employment with the Company.

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/ Craig A. Collard
Name: Craig A. Collard
Title:   Chief Executive 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 (this
“Agreement”) to consider this Agreement.  You have also been advised to consult
with an attorney prior to the execution of this 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. 2 of this 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: October 19, 2012  
/s/ Vincent T. Morgus
   
 
   
Name:  Vincent T. Morgus

ATTACHMENT A
DESCRIPTION OF SEVERANCE BENEFITS

1.   Payment in lieu of Notice.   The Company will pay to you the following lump
sum amount, less lawful deductions, on or before October 26, 2012 provided you
execute and do not revoke the Separation Letter Agreement and General Release
(the “Agreement”) to which this Attachment A is attached:

  •   $54,625 being payment in lieu of service for 69 days of the 90 day notice
period provided for in Section 4.6 of the Employment Agreement, which notice
period began September 29           

2.   Severance Payments Payment in lieu of Notice.   The Company will pay to you
the following lump sum amounts, less lawful deductions, on January 4, 2013
provided you execute and do not revoke the Agreement:

  •   $285,000, being one times base salary as provided under Section 5.4(b) of
the Employment Agreement;

  •   $74,812, being payment of your Target Cash Bonus, as provided under
Section 5.4(d) of the Employment Agreement, pro-rated through September 29,
2012;

  •   Provided, however, that the total amount payable in cash pursuant to this
Section 2 will be reduced

  •   by the amount of any withholding tax paid on your behalf pursuant to
Subsection 5(c) of this Attachment, and

  •   by the value of the 20,460 shares of Restricted Stock the vesting of which
is accelerated pursuant to Subsection 5(b) of this Attachment A, using as the
value of each such share for purposes of this calculation the average of the
closing prices of the common stock of the Company on the NASDAQ Capital Market
on each of the twenty trading dates beginning on September 17, 2012 and ending
on October 12, 2012.

3.   Continuation of Benefits.  The Company will, as provided in Section 5.4(c)
of the Employment Agreement, provided you execute and do not revoke the
Agreement, pay on a monthly basis 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 to be paid beginning on
the last day of the first payroll-cycle after the expiration of the revocation
period provided in Paragraph No. 18 of the Agreement; and

 

  (b)   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 to be paid on the first business day of
each month after the expiration of the revocation period provided in
Paragraph No. 18 of the Agreement;

such payments under Subsections 3(a) and 3(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).

4.   Accelerated Vesting of Stock Options. The Company will, provided you
execute and do not revoke the Agreement, vest all of your unvested stock options
that would have vested at any time before October 19, 2013, being 35,312
options, immediately as of the close of business on the Termination Date, as
provided under Section 5.4(e) of the Employment Agreement, and the Company will
extend the period during which the vested options may be exercised until
March 31, 2013.

5.   Accelerated Vesting of Restricted Stock.

  (a)   The Company will, provided you execute and do not revoke the Agreement,
vest all of your unvested shares of restricted stock that would have vested at
any time before October 19, 2013, being 13,860 shares of restricted stock,
immediately as of the close of business on the date seven (7) calendar days
following the day you execute this Agreement, as provided under Section 5.4(e)
of the Employment Agreement.

  (b)   The Company will, provided you execute and do not revoke the Agreement,
in addition vest all of your unvested shares of restricted stock not covered by
paragraph 5(a) that would have vested at any time, being a further 20,460 shares
of restricted stock, immediately as of the close of business on the date seven
(7) calendar days following the day you execute this Agreement.

  (c)   The Company will, provided you execute and do not revoke the Agreement,
make whatever cash payments to IRS that may be required to settle the Company’s
withholding tax obligations paid on your behalf associated with deductions from
your income related to the vesting of your restricted stock, provided, however,
that the Company will reduce the amount of the severance payments to be made to
you pursuant to Section 2 of this Attachment in an amount equal to such withheld
amounts.

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 beginning at the end of your tax year in which the separation
from service occurs and 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) or such
payments or benefits are otherwise exempt from Section 409A.  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 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.