Exhibit 10.1

EMPLOYMENT SEPARATION AGREEMENT AND RELEASE

 

This Employment Separation Agreement and Release (the “Agreement”) is made and
entered into this 23rd day of November, 2007 (the “Execution Date”), by and
between Osiris Therapeutics, Inc., a Delaware corporation (the “Company”), and
Cary J. Claiborne (the “Executive”).  The Company and the Executive are
sometimes referred to as the “Parties” or individually as a “Party” to this
Agreement.

RECITALS

The Executive has been employed by the Company since December 2004.  His
positions with the Company as of November 23, 2007 (the “Separation Date”) were
Chief Financial Officer and Corporate Secretary.

The Executive has submitted his resignation effective on the Separation Date and
the Company has accepted that resignation.  The Executive and the Company now
desire to confirm the resignation of Executive and set forth the terms of
severance and release.  .

NOW, THEREFORE, in consideration of the foregoing, the promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Parties, the
Parties agree as follows:

1.             INCORPORATION OF RECITALS.  THE RECITALS SET FORTH ABOVE ARE
INCORPORATED BY REFERENCE AS PART OF THIS AGREEMENT.

2.             SEPARATION OF EMPLOYMENT.  THE EXECUTIVE HEREBY CONFIRMS THAT HE
PREVIOUSLY RESIGNED FROM EMPLOYMENT, AS WELL AS FROM ALL POSITIONS WITH THE
COMPANY OR ANY AFFILIATED ENTITY, INCLUDING WITHOUT LIMITATION HIS POSITIONS AS
CHIEF FINANCIAL OFFICER AND CORPORATE SECRETARY, IN EACH CASE EFFECTIVE AS OF
THE SEPARATION DATE.  THE EXECUTIVE’S TERMINATION FROM EMPLOYMENT WILL BE
TREATED AS A VOLUNTARY TERMINATION UNDER SECTION 8(E) OF THE EMPLOYMENT
AGREEMENT DATED AS OF DECEMBER 3, 2004 (THE “EMPLOYMENT AGREEMENT”) BETWEEN THE
EXECUTIVE AND THE COMPANY.

3.             SEVERANCE PAY AND BENEFITS.  THE COMPANY SHALL PROVIDE THE
FOLLOWING SEVERANCE BENEFITS AND MAKE THE FOLLOWING PAYMENTS TO THE EXECUTIVE
(THE “SEPARATION BENEFITS”), IN ADDITION TO THE OTHER BENEFITS GENERALLY
AVAILABLE TO COMPANY EMPLOYEES ON TERMINATION OF EMPLOYMENT, IN CONSIDERATION
FOR ENTERING INTO THIS AGREEMENT AND PROVIDING THE RELEASE SET FORTH IN SECTION
5:

(a)  Severance pay in the total amount of $158,333.30, representing ten (10)
months of  the Executive’s base salary in effect as of the Separation Date.  To
the extent required by law, the Company shall withhold from any payments due
Executive under this Agreement any applicable federal, state or local taxes and
such other deductions as are prescribed by law or Company policy;

 

--------------------------------------------------------------------------------

 

(b)  plus all medical, life, and disability benefits, if any, Executive had been
receiving immediately preceding the Separation Date for the a period of one year
following the Separation Date; provided, however, that the Company’s obligation
to continue to provide the Executive with medical, life, or disability benefits
pursuant to this clause (b) shall cease at such time as the Executive first
becomes eligible to participate in generally similar benefit arrangements as a
result of the Executive’s subsequent employment, whether as part of an
organization or as an independent consultant.

 

4.             IMPACT ON EMPLOYMENT AGREEMENT/ STOCK OPTIONS AND OTHER RIGHTS. 
WITHOUT THE NEED FOR ANY FURTHER ACTION ON THE PART OF THE EXECUTIVE OR THE
COMPANY, EFFECTIVE ON THE SEPARATION DATE, THE EMPLOYMENT AGREEMENT, DATED
DECEMBER 3, 2004, BETWEEN THE COMPANY AND THE EXECUTIVE SHALL TERMINATE AND BE
OF NO FURTHER FORCE AND EFFECT.  IN ADDITION, THE EXECUTIVE AGREES THAT ALL
RIGHTS OF THE EXECUTIVE IN AND TO ANY OUTSTANDING STOCK OPTIONS, WARRANTS,
RESTRICTED STOCK OR OTHER RIGHTS IN AND TO EQUITY OR OTHER SECURITIES OF THE
COMPANY, WHETHER OR NOT EXERCISABLE (BUT EXCLUDING SHARES OF COMMON STOCK HELD
OUTRIGHT BY THE EXECUTIVE FREE OF RESTRICTIONS OTHER THAN SECURITIES LAW
RESTRICTIONS) ARE TERMINATED AND THE EXECUTIVE WAIVES ANY AND ALL RIGHTS
THEREUNDER OR THEREUNTO.

5.             GENERAL RELEASE OF CLAIMS.

(A)           THE EXECUTIVE, FOR HIMSELF AND HIS HEIRS, EXECUTORS,
ADMINISTRATORS AND ASSIGNS, IF ANY, AND ANYONE PURPORTING TO CLAIM BY OR THROUGH
THE EXECUTIVE, DOES HEREBY WAIVE, RELEASE AND FOREVER DISCHARGE THE COMPANY, ITS
SUBSIDIARIES, PREDECESSORS, SUCCESSORS, ASSIGNS, EMPLOYEE BENEFIT PLANS AND
TRUSTS, IF ANY, AND EACH OF THEIR PAST, PRESENT AND FUTURE MANAGERS, MEMBERS,
DIRECTORS, OFFICERS, PARTNERS, AGENTS, EMPLOYEES, ATTORNEYS, REPRESENTATIVES,
FIDUCIARIES, PLAN SPONSORS, ADMINISTRATORS AND TRUSTEES, IF ANY, (HEREINAFTER
COLLECTIVELY “THE COMPANY RELEASED PARTIES”), OF AND FROM ANY AND ALL ACTIONS,
CAUSES OF ACTION, CLAIMS (INCLUDING WITHOUT LIMITATION, ANY CLAIM FOR WRONGFUL
DISCHARGE OR BREACH OF CONTRACT AND CLAIMS UNDER THE FEDERAL, STATE OR LOCAL
EMPLOYMENT DISCRIMINATION LAW SUCH AS TITLE VII OF THE CIVIL RIGHTS ACT, THE
AMERICANS WITH DISABILITIES ACT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND
OTHER SIMILAR LAWS) SUITS, DEMANDS, RIGHTS, DAMAGES, ACCOUNTS, JUDGMENTS, WAGES,
COMMISSIONS, EXECUTIONS, DEBTS, OBLIGATIONS, ATTORNEYS’ FEES, COSTS AND ALL
OTHER LIABILITIES OF ANY KIND OR DESCRIPTION WHATSOEVER, EITHER AT LAW OR IN
EQUITY, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED AND WHETHER OR NOT
BASED ON HIS EMPLOYMENT OR THE TERMINATION OF HIS EMPLOYMENT, THAT THE EXECUTIVE
EVER HAD, NOW HAS OR MAY HAVE OR CLAIM TO HAVE IN THE FUTURE AGAINST ANY OF THE
COMPANY RELEASED PARTIES FOR OR BY REASON OF ANY CAUSE, MATTER OR EVENT
WHATSOEVER, FROM THE BEGINNING OF TIME TO THE DATE OF THIS AGREEMENT.  THE
EXECUTIVE FURTHER AGREES THAT HE WILL NOT BRING ANY LAW SUIT OR ARBITRATION
AGAINST ANY OF THE COMPANY RELEASED PARTIES FOR ANY CLAIMS HEREBY RELEASED. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION, THIS RELEASE
SHALL NOT APPLY TO CLAIMS RELATING TO THE VALIDITY OR ENFORCEMENT OF THIS
AGREEMENT, CLAIMS FOR ANY ACCRUED BENEFIT UNDER THE TERMS OF ANY EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
MAINTAINED BY THE COMPANY (EXCEPT THAT IT WILL APPLY TO ANY SEVERANCE BENEFITS
THAT OTHERWISE MIGHT BE PAYABLE OUTSIDE OF THIS AGREEMENT) OR CLAIMS FOR
INDEMNIFICATION OR DEFENSE TO WHICH THE EXECUTIVE IS ENTITLED UNDER THE
CERTIFICATE OF INCORPORATION, THE BYLAWS AND/OR ANY INSURANCE POLICY OF THE
COMPANY OR ITS SUBSIDIARIES.

 

2

--------------------------------------------------------------------------------

 

(B)           BECAUSE THE EXECUTIVE IS AT LEAST FORTY (40) YEARS OF AGE, HE HAS
SPECIFIC RIGHTS UNDER THE OLDER WORKERS BENEFIT PROTECTION ACT (“OWBPA”), WHICH
PROHIBITS DISCRIMINATION ON THE BASIS OF AGE.  IT IS THE COMPANY’S DESIRE AND
INTENT TO MAKE CERTAIN THE EXECUTIVE FULLY UNDERSTAND THE PROVISIONS AND EFFECT
OF THIS AGREEMENT.  TO THAT END, THE EXECUTIVE IS ENCOURAGED, AND HAS BEEN GIVEN
THE OPPORTUNITY, TO CONSULT WITH LEGAL COUNSEL FOR THE PURPOSE OF REVIEWING THE
TERMS OF THIS AGREEMENT.  AS REQUIRED BY THE OWBPA, THE COMPANY HAS ATTACHED TO
THIS AGREEMENT AS EXHIBIT A INFORMATION REGARDING THE JOB TITLES AND AGES OF
OTHER EMPLOYEES IN THE EXECUTIVE’S JOB CLASSIFICATION OR ORGANIZATIONAL UNIT WHO
ARE NOT ELIGIBLE FOR SEPARATION PAY AND BENEFITS.  ALSO, CONSISTENT WITH THE
PROVISIONS OF THE OWBPA, AND AS DESCRIBED IN SECTION 14 OF THIS AGREEMENT, THE
COMPANY IS PROVIDING THE EXECUTIVE WITH FORTY-FIVE (45) DAYS IN WHICH TO
CONSIDER AND ACCEPT THE TERMS OF THIS AGREEMENT.

(C)           THE COMPANY DOES HEREBY WAIVE, RELEASE AND FOREVER DISCHARGE THE
EXECUTIVE, HIS HEIRS, EXECUTORS, ADMINISTRATORS AND ASSIGNS, IF ANY (THE
“EXECUTIVE RELEASED PARTIES”), OF AND FROM ANY AND ALL ACTIONS, CAUSES OF
ACTION, CLAIMS, SUITS, DEMANDS, RIGHTS, DAMAGES, ACCOUNTS, JUDGMENTS, WAGES,
COMMISSIONS, EXECUTIONS, DEBTS, OBLIGATIONS, ATTORNEYS’ FEES, COSTS AND ALL
OTHER LIABILITIES OF ANY KIND OR DESCRIPTION WHATSOEVER, EITHER AT LAW OR IN
EQUITY, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, THAT THE COMPANY
EVER HAD, NOW HAS OR MAY HAVE OR CLAIM TO HAVE IN THE FUTURE AGAINST ANY OF THE
EXECUTIVE RELEASED PARTIES FOR OR BY REASON OF ANY CAUSE, MATTER OR EVENT
WHATSOEVER, FROM THE BEGINNING OF TIME TO THE DATE OF THIS AGREEMENT.  THE
COMPANY FURTHER AGREES THAT IT WILL NOT BRING ANY LAW SUIT OR ARBITRATION
AGAINST ANY OF THE EXECUTIVE RELEASED PARTIES FOR ANY CLAIMS HEREBY RELEASED. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION, THIS RELEASE
SHALL NOT APPLY TO CLAIMS RELATING TO THE VALIDITY OR ENFORCEMENT OF THIS
AGREEMENT, CLAIMS FOR REIMBURSEMENT OF AMOUNTS PAID IN INDEMNIFICATION, IF IT IS
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION THAT THE COMPANY’S
INDEMNIFICATION OF THE EXECUTIVE WAS IMPROPER AND FOR CLAIMS UNDER SECTION 16 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OR FOR CLAIMS UNDER ANY INSIDER
TRADING LAW.

6.             RETURN OF COMPANY PROPERTY.  ALL INFORMATION AND DOCUMENTS
RELATING TO THE COMPANY SHALL BE THE EXCLUSIVE PROPERTY OF THE COMPANY AND THE
EXECUTIVE SHALL USE HIS BEST EFFORTS TO PREVENT ANY PUBLICATION OR DISCLOSURE
THEREOF.  BY THE EXECUTION DATE, THE EXECUTIVE SHALL HAVE DELIVERED TO THE
COMPANY ALL COMPANY PROPERTY OF ANY KIND OR CHARACTER, WHICH SHALL INCLUDE, BUT
NOT BE LIMITED TO, ALL COMPANY IDENTIFICATION AND CREDIT CARDS, ANY COMPANY
EQUIPMENT, BOOKS, KEYS, JOURNALS, RECORDS, PUBLICATIONS, FILES, COMPUTERS AND
COMPUTER DISKS, MEMORANDA AND DOCUMENTS OF ANY KIND OR DESCRIPTION, OR ANY OTHER
COMPANY PROPERTY THAT MAY BE IN HIS POSSESSION, CUSTODY OR CONTROL.

7.             CONFIDENTIALITY.  EXCEPT IN THE NORMAL COURSE OF BUSINESS IN THE
PERFORMANCE OF HIS DUTIES, THE EXECUTIVE SHALL NOT, DIRECTLY OR INDIRECTLY,
DISCLOSE OR PERMIT TO BE KNOWN, TO ANY PERSON, FIRM OR CORPORATION, ANY
CONFIDENTIAL INFORMATION ACQUIRED BY HIM DURING THE COURSE OF, OR AS AN INCIDENT
TO, HIS EMPLOYMENT BY THE COMPANY OR HIS CONSULTING SERVICES FOR THE COMPANY,
RELATING TO THE COMPANY, THE DIRECTORS OF THE COMPANY, OR ANY CLIENT OF THE
COMPANY, INCLUDING, BUT NOT LIMITED TO, THE BUSINESS AFFAIRS OF EACH OF THE
FOREGOING.  SUCH CONFIDENTIAL INFORMATION SHALL INCLUDE, BUT SHALL NOT BE
LIMITED TO, PROPRIETARY TECHNOLOGY, TRADE SECRETS, PATENTED PROCESSES, RESEARCH
AND DEVELOPMENT DATA, KNOW-HOW, FORMULAE, PRICING POLICIES, THE SUBSTANCE OF
AGREEMENTS WITH CUSTOMERS AND OTHERS, AND ARRANGEMENTS, CUSTOMER

 

3

--------------------------------------------------------------------------------

 

LISTS AND ANY OTHER DOCUMENTS EMBODYING SUCH CONFIDENTIAL INFORMATION; PROVIDED,
HOWEVER, THAT CONFIDENTIAL INFORMATION SHALL NOT INCLUDE ANY INFORMATION THAT
HAS BECOME PUBLIC KNOWLEDGE THROUGH NO FAULT OF THE EXECUTIVE.  EXECUTIVE ALSO
AGREES NOT TO DISCLOSE ANY CONFIDENTIAL OR PROPRIETARY INFORMATION THAT THE
COMPANY OBTAINS FROM A THIRD PARTY AND WHICH THE COMPANY TREATS AS CONFIDENTIAL
OR PROPRIETARY OR DESIGNATES AS CONFIDENTIAL, WHETHER OR NOT SUCH INFORMATION IS
OWNED OR DEVELOPED BY THE COMPANY.  ALL CONFIDENTIAL INFORMATION, REGARDLESS OF
FORM, IS THE EXCLUSIVE PROPERTY OF THE COMPANY.  EXECUTIVE ASSIGNS TO THE
COMPANY ANY RIGHTS TO THE FOREGOING CONFIDENTIAL INFORMATION AND ANY OTHER
PROPRIETARY DATA, INVENTIONS OR OTHER INTELLECTUAL PROPERTY USED OR DEVELOPED
DURING THE TERM OF THIS AGREEMENT BY EXECUTIVE IN PROVIDING SERVICES TO THE
COMPANY.  EXECUTIVE UNDERSTANDS AND AGREES THAT THIS OBLIGATION SHALL SURVIVE
THE TERMINATION OF THIS AGREEMENT.

8.             RESTRICTIVE COVENANTS.

(a)Executive acknowledges that in the course of his employment with the Company
he has become familiar with the trade secrets of, and other confidential
information concerning, the Company, and that the Company’s ability to
accomplish its purposes and to successfully pursue its business plan and compete
in the marketplace depended substantially on the skills and expertise of the
Executive. Therefore, and in further consideration of the compensation being
paid to the Executive hereunder, the Executive agrees that for no less than two
(2) years from the Separation Date, so long as the payments are made or have
been made in accordance with this Agreement (the “Noncompete Period”), he shall
not (i)  directly or indirectly own, manage, control, participate in, consult
with, render services for, or in any manner engage in, any business competing
with the Business of the Company in any country where the Company conducts
business, or plans to conduct business, provided such plans have been
communicated to Executive (a “Competing Business”), where for  purposes of this
Section 8(a), the “Business” shall mean all commercial or therapeutic use that
involves mesenchymal stem cells (MSCs) or cells substantially similar to
mesenchymal stem cells, that is, a homogeneous population of cells that can
differentiate along more than one connective tissue lineage, regardless of the
source; all commercial efforts to deliver or improve the delivery of MSCs for
therapeutic purposes; all commercial efforts that would seek to enhance the
endogenous in vivo population of MSCs in the body by pharmaceutical or chemical
means; any other effort to commercially compete with the Company to which the
Executive has confidential knowledge. (to cover hiring, business partnerships,
vendor relationships, etc.) ]; (ii)  assist others in engaging in any Competing
Business in the manner described in clause (i) above; or (iii) induce any
employee of the Company or any subsidiary thereof to terminate his or her
employment with the Company or any subsidiary thereof or engage in any Competing
Business or in any way willfully interfere with the relationship between the
Company and any employee thereof or (iv) induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company to cease
doing business with the Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company.  .  The ownership of not more than 5% of the stock of any entity having
a class of equity securities actively traded on a national securities exchange
or on the NASDAQ Stock Market or any minority interest in any private entity
shall not be deemed, in and of itself, to violate the prohibitions of this
Section 9(a).

 

4

--------------------------------------------------------------------------------

 

(B)  FOR A PERIOD OF FIVE (5) YEARS AFTER THE EXECUTION DATE, THE EXECUTIVE
SHALL NOT DISPARAGE, DEPRECATE, OR MAKE ANY COMMENTS OR TAKE ANY OTHER ACTIONS,
DIRECTLY OR INDIRECTLY, THAT WILL REFLECT ADVERSELY ON THE COMPANY OR ITS
OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS OR ADVERSELY AFFECT THEIR BUSINESS
REPUTATION OR GOODWILL.

(C)           FOR A PERIOD OF FIVE (5) YEARS AFTER THE EXECUTION DATE, THE
COMPANY SHALL NOT DISPARAGE, DEPRECATE OR MAKE ANY COMMENTS OR TAKE ANY OTHER
ACTIONS, DIRECTLY OR INDIRECTLY, THAT WILL REFLECT ADVERSELY ON THE EXECUTIVE OR
ADVERSELY AFFECT HIS BUSINESS REPUTATION

(D)  IF ANY PORTION OF THE RESTRICTIONS SET FORTH IN THIS SECTION 8 SHOULD, FOR
ANY REASON WHATSOEVER, BE DECLARED INVALID BY A COURT OF COMPETENT JURISDICTION,
THE VALIDITY OR ENFORCEABILITY OF THE REMAINDER OF SUCH RESTRICTIONS SHALL NOT
THEREBY BE ADVERSELY AFFECTED.  THE EXECUTIVE DECLARES THAT THE TERRITORIAL,
TIME LIMITATIONS AND SCOPE OF ACTIVITIES RESTRICTED AS SET FORTH IN THIS
SECTION 8 ARE REASONABLE AND PROPERLY REQUIRED FOR THE ADEQUATE PROTECTION OF
THE BUSINESS OF THE COMPANY.  IN THE EVENT THAT ANY SUCH TERRITORIAL, TIME
LIMITATION AND SCOPE OF ACTIVITIES RESTRICTED IS DEEMED TO BE UNREASONABLE BY A
COURT OF COMPETENT JURISDICTION, THE COMPANY AND THE EXECUTIVE AGREE TO THE
REDUCTION OF THE TERRITORIAL, TIME LIMITATION OR SCOPE TO THE AREA OR PERIOD
WHICH SUCH COURT SHALL HAVE DEEMED REASONABLE.  EXECUTIVE ACKNOWLEDGES THAT THE
COVENANT INCLUDED IN SECTION 8(A) ABOVE HAS UNIQUE, VERY SUBSTANTIAL AND
IMMEASURABLE VALUE TO COMPANY, AND THAT EXECUTIVE HAS SUFFICIENT ASSETS AND
SKILLS TO PROVIDE A LIVELIHOOD FOR HIMSELF WHILE SUCH COVENANT REMAINS IN FORCE.

THE EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION BY THE EXECUTIVE AGAINST THE
COMPANY SHALL NOT CONSTITUTE A DEFENSE TO THE ENFORCEMENT BY THE COMPANY OF THE
FOREGOING RESTRICTIVE COVENANTS, BUT SUCH CLAIM OR CAUSE OF ACTION SHALL BE
LITIGATED SEPARATELY.

9.             ENFORCEMENT.  IT IS THE DESIRE AND INTENT OF THE PARTIES HERETO
THAT THE PROVISIONS OF THIS AGREEMENT BE ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER THE LAWS AND PUBLIC POLICIES APPLIED IN EACH JURISDICTION IN
WHICH ENFORCEMENT IS SOUGHT.  ACCORDINGLY, TO THE EXTENT THAT A RESTRICTION
CONTAINED IN THIS AGREEMENT IS MORE RESTRICTIVE THAN PERMITTED BY THE LAWS OF
ANY JURISDICTION WHERE THIS AGREEMENT MAY BE SUBJECT TO REVIEW AND
INTERPRETATION, THE TERMS OF SUCH RESTRICTION, FOR THE PURPOSE ONLY OF THE
OPERATION OF SUCH RESTRICTION IN SUCH JURISDICTION, WILL BE THE MAXIMUM
RESTRICTION ALLOWED BY THE LAWS OF SUCH JURISDICTION AND SUCH RESTRICTION WILL
BE DEEMED TO HAVE BEEN REVISED ACCORDINGLY HEREIN.

 

5

--------------------------------------------------------------------------------

 

10.          REMEDIES; SURVIVAL.  THE PARTIES EACH ACKNOWLEDGE AND UNDERSTAND
THAT THE COVENANTS CONTAINED IN SECTIONS 7 AND 8 HEREOF, THE VIOLATION OF WHICH
CANNOT BE ACCURATELY COMPENSATED FOR IN DAMAGES BY AN ACTION AT LAW, ARE OF
CRUCIAL IMPORTANCE TO THE BENEFITED PARTY, AND THAT THE BREACH OR THREATENED
BREACH OF ANY OF SUCH PROVISIONS BY THE OTHER PARTY WOULD CAUSE THE BENEFITED
PARTY IRREPARABLE HARM.  IN THE EVENT OF A BREACH OR THREATENED BREACH BY THE
OTHER PARTY OF ANY OF THE PROVISIONS OF SECTIONS 7 OR 8 HEREOF, THE BENEFITED
PARTY WILL BE ENTITLED TO SEEK AN INJUNCTION RESTRAINING THE OTHER PARTY FROM
SUCH BREACH.  NOTHING HEREIN CONTAINED WILL BE CONSTRUED AS PROHIBITING THE
BENEFITED PARTY FROM PURSUING ANY OTHER REMEDIES AVAILABLE IN LAW OR IN EQUITY
FOR ANY BREACH OR THREATENED BREACH OF THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, DAMAGES AND AN EQUITABLE ACCOUNTING OF ALL EARNINGS, PROFITS AND
OTHER BENEFITS ARISING FROM SUCH BREACH.

11.          COOPERATION.  THE EXECUTIVE WILL COOPERATE WITH ANY REASONABLE
REQUEST OF THE COMPANY FOR ASSISTANCE FROM THE EXECUTIVE IN RESPECT OF THE
TRANSITION OF THE EXECUTIVE’S PREVIOUS RESPONSIBILITIES WITH THE COMPANY TO HIS
SUCCESSOR, THROUGH MARCH 31, 2008.  SUCH ASSISTANCE WILL BE PROVIDED WITH NO
ADDITIONAL COMPENSATION TO EXECUTIVE FROM THE COMPANY AND THE EXECUTIVE AGREES
TO ABIDE BY ALL TYPICAL POLICIES OF THE COMPANY IN RESPECT OF CONFIDENTIALITY,
NON DISCLOSURE AND THE LIKE IN THE PROVIDING BY EXECUTIVE OF SUCH ASSISTANCE. 
THE COMPANY WILL, HOWEVER, REIMBURSE THE EXECUTIVE FOR ALL REASONABLE
OUT-OF-POCKET EXPENSES HE INCURS AS A RESULT OF SUCH ASSISTANCE WITH PRIOR
APPROVAL OF THE COMPANY.

12.          GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN, AND
IN ALL RESPECTS TO BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT GIVING EFFECT TO THE PRINCIPLES
OF CONFLICTS OF LAW UNDER MARYLAND LAW.  THE PARTIES SHALL SUBMIT TO THE
JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS LOCATED IN MARYLAND IN
THE EVENT THAT THERE IS ANY CLAIM OF BREACH OF THIS AGREEMENT.

13.          VOLUNTARY EXECUTION BY EXECUTIVE.  THE EXECUTIVE (A) HAS CAREFULLY
READ AND UNDERSTANDS THE PROVISIONS OF THIS AGREEMENT; (B) HAS BEEN GIVEN THE
OPPORTUNITY TO EXAMINE THIS AGREEMENT FOR A PERIOD OF 45 CALENDAR DAYS; AND (C)
IS ADVISED BY THE COMPANY THAT HE SHOULD CONSULT WITH HIS PERSONAL ATTORNEY
BEFORE DECIDING WHETHER TO ACCEPT THIS AGREEMENT.  THE EXECUTIVE’S SIGNATURE TO
THIS AGREEMENT SIGNIFIES THAT THIS SECTION 13 HAS BEEN COMPLIED WITH, AND THAT
IF THIS AGREEMENT IS SIGNED BY THE EXECUTIVE BEFORE THE EXPIRATION OF THE 45-DAY
CONSIDERATION PERIOD, THE EXECUTIVE IS VOLUNTARILY WAIVING HIS RIGHT TO CONSIDER
THE AGREEMENT FOR THE ENTIRE 45-DAY PERIOD.  THE PARTIES RECOGNIZE THAT THE
EXECUTIVE SHALL HAVE SEVEN DAYS AFTER THE EXECUTIVE RETURNS A SIGNED COPY OF
THIS AGREEMENT TO REVOKE THE AGREEMENT BY SUBMITTING A SIGNED REVOCATION NOTICE
TO THE COMPANY.  UPON THE EXPIRATION OF THAT SEVEN DAY PERIOD; PROVIDED THE
EXECUTIVE HAS NOT REVOKED THIS AGREEMENT, THIS AGREEMENT SHALL BECOME EFFECTIVE
(THE “EFFECTIVE DATE”).

14.          CONSTRUCTION.  CAPTIONS ARE INSERTED HEREIN FOR CONVENIENCE, DO NOT
CONSTITUTE A PART OF THIS AGREEMENT AND SHALL NOT BE ADMISSIBLE FOR THE PURPOSES
OF PROVING THE INTENT OF THE PARTIES.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR
MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL.

 

6

--------------------------------------------------------------------------------

 

15.          SEVERABILITY.  SHOULD ANY PROVISION OF THIS AGREEMENT BE DECLARED
AND/OR DETERMINED BY ANY COURT TO BE ILLEGAL OR INVALID, THE VALIDITY OF THE
REMAINING PARTS, TERMS OR PROVISIONS SHALL NOT BE AFFECTED.

16.          NOTICE.  ALL NOTICES CONTEMPLATED BY THIS AGREEMENT SHALL BE SENT
TO EACH OF THE PARTIES AS FOLLOWS:

To:                             Cary J. Claiborne

                                                3056 Seneca Chief Trail

                                                Ellicott City, Maryland  21042

 

To:                             Osiris Therapeutics, Inc.

                                                7015 Albert Einstein Drive

                                                Columbia, Maryland  21046

                                                Attention: President

 

Unless otherwise specified herein, any Notice shall be deemed received (i) on
the date delivered, if by hand; or (ii) one business day after deposit with
FedEx or other overnight courier.  A party may, by Notice given as aforesaid,
change the person or persons and/or address or addresses for its Notices;
provided, however, that a Notice of a change of addressee or address shall only
be effective upon receipt.

17.          PUBLIC DISCLOSURE.  THE COMPANY AND THE EXECUTIVE SHALL PROVIDE
EACH OTHER WITH A REASONABLE OPPORTUNITY TO REVIEW AND PROVIDE COMMENTS TO ANY
PRESS RELEASE OR OTHER PUBLIC DISCLOSURE MADE BY THE COMPANY OR BY THE EXECUTIVE
OR A FUTURE EMPLOYER OF THE EXECUTIVE RELATED TO THIS AGREEMENT OR TO THE
EMPLOYMENT RELATIONSHIP BETWEEN THE COMPANY AND THE EXECUTIVE.  THIS SECTION 18
SHALL SURVIVE ANY EXPIRATION OR TERMINATION OF THIS AGREEMENT.

18.          BINDING EFFECT.  THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND
BE BINDING UPON THE PARTIES AND THEIR RESPECTIVE EXECUTORS, ADMINISTRATORS,
PERSONAL REPRESENTATIVES, HEIRS, PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS,
AGENTS, EMPLOYEES, TRUSTEES AND AFFILIATES FOREVER.

19.          ENTIRE AGREEMENT.  THIS AGREEMENT, ALONG WITH ITS EXHIBITS AND THE
OTHER DOCUMENTS REFERRED TO IN THIS AGREEMENT, CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE TERMINATION OF EXECUTIVE’S EMPLOYMENT
AND HIS SEVERANCE PAY AND BENEFITS AND SUPERSEDES ANY PRIOR OR CONTEMPORANEOUS
WRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES WITH RESPECT THERETO, INCLUDING
THE EMPLOYMENT AGREEMENT.  EACH OF THE PARTIES AGREES AND ACKNOWLEDGES THAT IN
DECIDING TO ENTER INTO THIS AGREEMENT HE OR IT IS NOT RELYING ON ANY STATEMENTS,
REPRESENTATIONS, OR PROMISES OTHER THAN THOSE CONTAINED HEREIN.  THIS AGREEMENT
MAY NOT BE MODIFIED EXCEPT BY A WRITING, WHICH HAS BEEN SIGNED BY EACH OF THE
PARTIES.

20.          FACSIMILE SIGNATURE.  ANY SIGNATURE TO THIS AGREEMENT MAY BE
DELIVERED BY FACSIMILE TO THE OTHER PARTY TO THIS AGREEMENT, AND SUCH FACSIMILE
SIGNATURE SHALL BE VALID EXECUTION OF THIS AGREEMENT AND BE BINDING ON BOTH
PARTIES.

 

7

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, and with the intention of being legally bound hereby, the
Parties have executed this Agreement as of the dates set forth below.

 

 

Osiris Therapeutics, Inc.

 

 

 

By:

/s/ C. RANDAL MILLS

 

Name:

C. Randal Mills, Ph.D.

Title:

President & Chief Executive Officer

Date Executed:        November 23, 2007

 

 

 

 

 

The Executive

 

 

 

By:

/s/ CARY J. CLAIBORNE

 

Name:

Cary J. Claiborne

Date Executed:        November 23, 2007

 

 

8

--------------------------------------------------------------------------------

 

 

 

EXHIBIT A

 

Disclosure Chart

 

Unit/Group Covered:  Vice Presidents & Executive Officers

Eligible for Severance and Benefits:

Job Title

 

Age

 

 

 

 

 

Chief Operating Officer

 

56

 

Vice President and General Manager for Orthopedics

 

59

 

Vice President and General Manager for Inflammatory Diseases

 

42

 

 

Not Eligible for Severance and Benefits:

Job Title

 

Age

 

 

 

 

 

Vice President of Development

 

33

 

 

 

 

--------------------------------------------------------------------------------