Exhibit 10.2

 

EMPLOYMENT SEPARATION AGREEMENT
AND GENERAL RELEASE

 

THIS EMPLOYMENT SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is
entered into by and between Egalet Corporation, a Delaware Corporation (the
“Company”), and Stanley J. Musial (“Executive” or “Musial”), effective following
Executive’s signature of it without timely revocation (the “Effective Date”).

 

WHEREAS, the Company and Executive are parties to that Employment Agreement
dated February 11, 2014 (“Employment Agreement”);

 

WHEREAS, Executive has tendered his resignation effective November 9, 2018 (the
“Separation Date”);

 

WHEREAS, Company and Executive desire that Executive assist with a transition by
providing consulting services through December 31, 2018; and

 

WHEREAS, the Company and Executive desire to resolve any and all disputes
between them, including but not limited to with respect to any of Executive’s
severance rights, on the terms and conditions set forth in this Agreement.  For
the avoidance of doubt, nothing in this Agreement will be deemed to release or
waive Executive’s right to indemnification and advancement by the Company under
any applicable contract or law.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties agree as follows:

 

1.                                      Payment of Accrued Wages and Expenses
Through the Separation Date.

 

(a)                           Within thirty days after the Separation Date, the
Company shall issue to Executive his final paycheck, reflecting (i) Executive’s
fully earned but unpaid base salary, through the Separation Date at the rate
then in effect, and (ii) all accrued, unused vacation due Executive through the
Separation Date.  Except as otherwise set forth herein, Executive acknowledges
and agrees that with his final check, Executive will have received all monies,
bonuses, commissions, or other compensation he earned or was due during his
employment by the Company.

 

(b)                           Expense Reimbursements.  The Company, within
thirty (30) days after the Separation Date, will reimburse Executive for any and
all reasonable and necessary business expenses incurred by Executive in
connection with the performance of his job duties prior to the Separation Date. 
Executive shall submit such expenses to the Company with supporting receipts
and/or documentation no later than thirty (30) days after the Separation Date.

 

(c)                            Benefits.  With the exception of healthcare
benefits for Executive which continue until and including November 30, 2018,
Executive’s entitlement to benefits from the Company, and eligibility to
participate in the Company’s benefit plans, shall cease on the Separation Date.
Executive may elect to and is eligible to receive continued healthcare

 

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coverage at Executive’s own expense pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) in
accordance with the provisions of COBRA.  Executive will receive a lump sum
payment equal to 102% of the total cost of his current group medical, dental and
vision insurance premiums for the month of December in his final paycheck. 
COBRA information will be provided via mail.

 

2.                                      Consulting Service.  Executive agrees to
reasonably assist with the orderly transition of his duties and assist the
Company’s outside professional services firm from November 10, 2018 through
December 31, 2018 provided that it does not interfere with other gainful
employment.  In consideration for the provision of these consulting services,
Executive shall receive gross payments of $43,333.33 through the Company’s
normal payroll process and subject to applicable withholding on or about each of
November 30, 2018, December 15, 2018 and December 31, 2018 (“Consulting Service
Payments”).

 

3.                                      Continuing Obligations.  Executive
agrees to cooperate with the Company and the Company’s legal counsel to the
fullest extent possible with respect to any pending or future governmental or
regulatory investigation, civil or administrative proceeding or arbitration,
legal proceedings, and litigation, including any internal investigations related
thereto. Such cooperation shall include but not be limited to telephone and
in-person conferences with the Company’s personnel and counsel and giving
testimony at deposition and/or trial.

 

4.                                      Separation Benefits.  Except as
otherwise set forth herein, Executive acknowledges and agrees that he is not
entitled to any severance or termination benefits under any severance plan or
program of the Company.

 

5.                                      Confirmation of Continuing Obligations.

 

(a)                           Restrictive Covenants.  Executive acknowledges
that he continues to be bound by the Company Remedies and the Restrictive
Covenants provisions set forth in Sections 7 and 8 of the Employment Agreement
or any other agreement governing the use of the Company’s confidential
information that Executive signed in connection with Executive’s employment in
accordance with the terms thereof.

 

(b)                           Nondisparagement.  Executive agree that he will
not defame, criticize, or disparage the Company and its current and former
directors, officers, agents, affiliates, subsidiaries, predecessors, counsel,
successors and assigns, and the current and former employees and agents of the
foregoing, both individually and in their business capacities or its products
and services in any medium or to any person without limitation in time, except
as may be required by law or subpoena.  Executive further agree not to take any
action that would harm the business or professional reputation of the Company,
its officers, directors, employees, or shareholders.

 

(c)                            Return of Property.  On or promptly following the
Separation Date, Executive shall return to the Company all of the Company’s
property, documents (hard copy or electronic files), and information. Executive
has not and will not copy or transfer any Company information, nor will
Executive maintain any Company information after the Separation Date. Executive
acknowledges that he continues to be bound by the provisions

 

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of Section 9 of the Employment Agreement governing the Company’s intellectual
and other property.

 

(d)                           Whistleblower Provision.  Notwithstanding anything
to the contrary contained in this Agreement, (i) Executive will not be prevented
from reporting possible violations of federal law or regulation to any United
States governmental agency or entity in accordance with the provisions of and
rules promulgated under Section 21F of the Securities Exchange Act of 1934 or
Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower
protection provisions of state or federal law or regulation (including the right
to receive an award for information provided to any such government agencies),
and (ii) Executive acknowledges that he will not be held criminally or civilly
liable for (A) the disclosure of confidential or proprietary information that is
made in confidence to a government official or to an attorney solely for the
purpose of reporting or investigating a suspected violation of law, or
(B) disclosure of confidential or proprietary information that is made in a
complaint or other document filed in a lawsuit or other proceeding under seal or
pursuant to court order.

 

6.                                      General Release of Claims by Executive.

 

(a)                           In exchange for the benefits of this Agreement,
and in consideration of the further agreements and promises set forth herein,
Executive, on behalf of himself and his executors, heirs, administrators,
representatives and assigns, hereby agrees to release and forever discharge the
Company and all predecessors, successors and their respective parent
corporations, affiliates, related, and/or subsidiary entities, and all of their
past and present investors, directors, shareholders, officers, general or
limited partners, employees, attorneys, agents and representatives, and the
employee benefit plans in which Executive is or has been a participant by virtue
of his employment with or service to the Company (collectively, the
“Releasees”), from any and all claims, debts, demands, accounts, judgments,
rights, causes of action, equitable relief, damages, costs, charges, complaints,
obligations, promises, agreements, controversies, suits, expenses, compensation,
responsibility and liability of every kind and character whatsoever (including
attorneys’ fees and costs), whether in law or equity, known or unknown, asserted
or unasserted, suspected or unsuspected (collectively, “Claims”), which
Executive has or may have had against such entities based on any events or
circumstances arising or occurring on or prior to the date hereof or on or prior
to the date hereof, arising directly or indirectly out of, relating to, or in
any other way involving in any manner whatsoever Executive’s employment by or
service to the Company or the termination thereof, and Executive’s right to
purchase, or actual purchase of any common shares or other equity interests of
the Company or any of its affiliates, including any and all claims arising under
federal, state, or local laws relating to employment, including without
limitation claims of wrongful discharge, breach of express or implied contract,
fraud, negligent or intentional misrepresentation, promissory estoppel,
negligent or intentional infliction of emotional distress, negligent or
intentional interference with contract or prospective economic advantage, unfair
business practices, defamation, libel, slander, negligence, personal injury,
assault, battery, invasion of privacy, false imprisonment, conversion,
disability benefits, or other liability in tort or contract; claims for recovery
of attorneys’ fees and costs; claims for any loss, cost, damage, or expense
arising out of any dispute over the non-withholding or other tax treatment of
any of the proceeds received by Executive as a result of this Agreement; and all

 

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legal and equitable claims of any kind that may be brought in any court or
administrative agency including, without limitation, claims under Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the
Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the
Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil
Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et
seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C.
Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C.
Section 206(d); regulations of the Office of Federal Contract Compliance, 41
C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29
U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29
U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended,
29 U.S.C. § 1001 et seq.; the Fair Credit Reporting Act, 15 U.S.C. Section 1681,
et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Section 2100, et seq.; the Sarbanes-Oxley Act, 18 U.S.C. Section 1514A.1, et
seq.; the federal and any state constitution; and all Pennsylvania state and
local laws.

 

(b)                           Notwithstanding the generality of the foregoing,
Executive does not release the following claims: (i) claims under this
Agreement; (ii) claims for unemployment compensation, workers’ compensation, or
any disability benefits pursuant to the terms of applicable law or policy;
(iii) claims pursuant to the terms and conditions of the federal law known as
COBRA; (iv) claims for indemnity under the bylaws of the Company, as provided
for by applicable law or under any applicable insurance policy with respect to
Executive’s liability as an employee, director or officer of the Company;
(v) claims for vested stock or other equity under the terms of the Company’s
plans; and (vi) Executive’s right to bring to the attention of the Equal
Employment Opportunity Commission or any other federal, state or local
government agency claims of discrimination, harassment, interference with leave
rights or retaliation; provided, however, that Executive does release
Executive’s right to secure any damages for such alleged treatment; and
(vii) Executive’s right to communicate or cooperate with any government agency.

 

(c)                            Executive acknowledges that he has been advised
that, by statute or common law, a general release may not extend to Claims of
which Executive is not aware at the time of entering into this Agreement which,
if known by Executive may or would have materially affected his decision to
enter into the Agreement.  Being aware of this fact, Executive waives any right
he may have by statute or under common law principles to preserve his ability to
assert such unknown Claims.

 

(d)                           Executive acknowledges that Executive is entitled
to have twenty-one (21) days’ time in which to consider this Agreement. 
Executive further acknowledges that the Company has advised him in writing that
he is waiving his rights under the ADEA, and that Executive should consult with
an attorney of his choice before signing this Agreement, and Executive has had
sufficient time to consider the terms of this Agreement.  Executive represents
and acknowledges that if Executive executes this Agreement before twenty-one
(21) days have elapsed, Executive does so knowingly, voluntarily, and upon the
advice and with the approval of Executive’s legal counsel (if any), and that
Executive voluntarily waives any remaining consideration period.

 

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(e)                            Executive understands that after executing this
Agreement, Executive has the right to revoke it within seven (7) days after his
execution of it.  If the seventh day falls on a weekend or federal holiday, he
has until the next business day to revoke.  Executive understands that this
Agreement will not become effective and enforceable unless the revocation period
passes and Executive does not revoke the Agreement in writing.  Executive
understands that this Agreement may not be revoked after the revocation period
has passed.  Executive also understands that any revocation of this Agreement
must be made in writing and delivered to Megan C. Timmins, Senior Vice President
and General Counsel, by email at mtimmins@egalet.com on or before 5 p.m. Eastern
on the last day of the revocation period following Executive’s signature of the
Agreement.

 

(f)                             Executive understands that this Agreement shall
become effective, irrevocable, and binding upon Executive after his execution of
it and the expiration of the revocation period, so long as Executive has not
revoked it within the time period and in the manner specified in clause
(e) above.

 

(g)                            Executive further understands that Executive will
not be eligible to  receive the Consulting Service Payments under Section 2 of
this Agreement unless it is timely executed and allowed to become effective.

 

7.                                      Additional Representations and
Warranties By Executive.  Executive represents that Executive has no pending
complaints or charges against the Releasees, or any of them, with any state or
federal court, or any local, state or federal agency, division, or department
based on any event(s) occurring prior to the date Executive signs this
Agreement, is not owed wages, commissions, bonuses or other compensation, other
than as set forth in this Agreement, and did not, during the course of
Executive’s employment sustain any injuries for which Executive might be
entitled to compensation pursuant to worker’s compensation law.  Except as
expressly permitted by this Agreement, Executive further represents that
Executive will not in the future, file, participate in, encourage, instigate or
assist in the prosecution of any claim, complaints, charges or in any lawsuit by
any party in any state or federal court against the Releasees, or any of them.
unless such aid or assistance is ordered by a court or government agency or
sought by compulsory legal process, claiming that the Releasees, or any of them,
have violated any local, state or federal laws, statutes, ordinances or
regulations based upon events occurring prior to the execution of this
Agreement. Nothing in this Section 8 is intended to affect Executive’s right to
communicate directly with, cooperate with, or provide information to, any
federal, state or local government regulator.

 

8.                                      No Admission of Liability.  By entering
into this Agreement, the parties do not admit, and specifically deny, any
liability, wrongdoing or violation of any statutory or common law, order,
regulation or policy whether under federal, state and/or local law.

 

9.                                      Knowing and Voluntary.  Executive
represents and agrees that, prior to signing this Agreement, Executive had the
opportunity to discuss the terms of this Agreement with legal counsel of
Executive’s choosing.  Executive further represents and agrees that Executive is
entering into this Agreement knowingly and voluntarily. Executive affirms that
no promise was made to cause Executive to enter into this Agreement, other than
what is promised in this Agreement. Executive further confirms that Executive
has not relied upon any other statement

 

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or representation by anyone other than what is in this Agreement as a basis for
Executive’s agreement.

 

10.                               Miscellaneous.

 

(a)                           Modification; Prior Claims.  This Agreement and
the Employment Agreement as modified herein, set forth the entire understanding
of the parties with respect to the subject matter hereof and supersede all
existing agreements between them concerning such subject matter.  Except as
preserved by express reference in this Agreement, the Employment Agreement shall
be superseded entirely by this Agreement and such agreements shall be terminated
and be of no further force or effect.  This Agreement may be amended or modified
only with the written consent of Executive and an authorized representative of
the Company.  No oral waiver, amendment or modification will be effective under
any circumstances whatsoever.

 

(b)                           Assignment; Assumption by Successor.  The rights
of the Company under this Agreement may, without the consent of Executive, be
assigned by the Company, in its sole and unfettered discretion, to any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or
substantially all of the assets or business of the Company.  The Company will
require any successor (whether direct or indirect, by purchase, merger or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and to agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place; provided, however, that no such assumption
shall relieve the Company of its obligations hereunder.  As used in this
Agreement, the “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.

 

(c)                            Third-Party Beneficiaries.  This Agreement does
not create, and shall not be construed as creating, any rights enforceable by
any person not a party to this Agreement.

 

(d)                           Waiver.  The failure of either party hereto at any
time to enforce performance by the other party of any provision of this
Agreement shall in no way affect such party’s rights thereafter to enforce the
same, nor shall the waiver by either party of any breach of any provision hereof
be deemed to be a waiver by such party of any other breach of the same or any
other provision hereof.

 

(e)                            Non-transferability of Interest.  None of the
rights of Executive to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Executive.  Any attempted assignment, transfer, conveyance, or other disposition
(other than as aforesaid) of any interest in the rights of Executive to receive
any form of compensation to be made by the Company pursuant to this Agreement
shall be void.

 

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(f)                             Governing Law.  This Agreement will be governed
by and construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to the conflicts of law provisions thereof.

 

(g)                            Ambiguities.  The general rule that ambiguities
are to be construed against the drafter shall not apply to this Agreement.  In
the event that any language of this Agreement is found to be ambiguous, all
parties shall have the opportunity to present evidence as to the actual intent
of the parties with respect to any such ambiguous language.

 

(h)                           Severability.  If any sentence, phrase, paragraph,
subparagraph or portion of this Agreement is found to be illegal or
unenforceable, such action shall not affect the validity or enforceability of
the remaining sentences, phrases, paragraphs, subparagraphs or portions of this
Agreement.

 

(i)                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, all of
which together shall constitute one and the same instrument.

 

(j)                              Withholding and other Deductions.  All
compensation payable or provided to Executive hereunder shall be subject to such
deductions as the Company is from time to time required to make pursuant to law,
governmental regulation or order.

 

(k)                           Code Section 409A.

 

(i)                                     Notwithstanding anything to the contrary
in this Agreement, no payment or benefit to be paid or provided to Executive
upon his termination of employment, if any, pursuant to this Agreement that,
when considered together with any other payments or benefits, are considered
deferred compensation under Code Section 409A (together, the “Deferred
Payments”) will be paid or otherwise provided until Executive has a “separation
from service” within the meaning of Code Section 409A.  Similarly, no amounts
payable to Executive, if any, pursuant to this Agreement that otherwise would be
exempt from Code Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(9) will be payable until Executive has a “separation from
service” within the meaning of Section 409A.

 

(ii)                                  Notwithstanding anything to the contrary
in this Agreement, if Executive is a “specified employee” within the meaning of
Code Section 409A at the time of Executive’s termination of employment (other
than due to death), then the Deferred Payments that are payable within the first
six (6) months following Executive’s separation from service, will become
payable on the first payroll date that occurs on or after the date six
(6) months and one (1) day following the date of Executive’s separation from
service.  All subsequent Deferred Payments, if any, will be payable in
accordance with the payment schedule applicable to each payment or benefit. 
Notwithstanding anything herein to the contrary, if Executive dies following
Executive’s separation from service, but prior to the six (6) month anniversary
of the separation from service, then any payments delayed in accordance with
this paragraph will be payable in a lump sum as soon as administratively
practicable after the date of Executive’s death and all other Deferred Payments
will be payable in accordance with the payment schedule applicable to each
payment or benefit.  Each payment and benefit payable under this Agreement is
intended to

 

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constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations.

 

(iii)                               Any amount paid under this Agreement that
satisfies the requirements of the “short-term deferral” rule set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute a
Deferred Payment for purposes of clauses (i) and (ii) above.

 

(iv)                              Any amount paid under this Agreement that
qualifies as a payment made as a result of an involuntary separation from
service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that
does not exceed the limits set forth therein will not constitute a Deferred
Payment for purposes of clauses (i) and (ii) above.

 

(v)                                 This Agreement is intended to be written,
administered, interpreted and construed in a manner such that no payment or
benefits provided under the Agreement become subject to (A) the gross income
inclusion set forth within Code Section 409A(a)(1)(A) or (B) the interest and
additional tax set forth within Code Section 409A(a)(1)(B) (together, referred
to herein as the “Section 409A Penalties”), including, where appropriate, the
construction of defined terms to have meanings that would not cause the
imposition of Section 409A Penalties.  In no event shall the Company be required
to provide a tax gross-up payment to Executive or otherwise reimburse Executive
with respect to Section 409A Penalties.   The Company and Executive agree to
work together in good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any Section 409A Penalties on Executive.

 

(vi)                              Any reimbursement of expenses or in-kind
benefits payable under this Agreement shall be made in accordance with Treasury
Regulation Section 1.409A-3(i)(1)(iv) and shall be paid on or before the last
day of Executive’s taxable year following the taxable year in which Executive
incurred the expenses.  The amount of expenses reimbursed or in-kind benefits
payable in one year shall not affect the amount eligible for reimbursement or
in-kind benefits payable in any other taxable year of Executive’s, and
Executive’s right to reimbursement for such amounts shall not be subject to
liquidation or exchange for any other benefit.

 

(l)                               Taxes; Right to Seek Independent Advice. 
Executive understands and agrees that all payments under this Agreement will be
subject to appropriate tax withholding and other deductions, as and to the
extent required by law.  Executive acknowledges and agrees that neither the
Company nor the Company’s counsel has provided any legal or tax advice to
Executive and that Executive is free to, and is hereby advised to, consult with
a legal or tax advisor of Executive’s choosing.

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

 

 

Egalet Corporation

 

 

 

 

By:

/s/ Robert S. Radie

 

Name:

Robert Radie

 

Title:

President and Chief Executive Officer

 

 

 

 

EXECUTIVE

 

 

 

 

/s/ Stanley J. Musial

 

Stanley J. Musial

 

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