EX-10.2 SEVERANCE PAY PLAN



 





EXHIBIT
10.2




ADAMS RESPIRATORY THERAPEUTICS, INC.




SEVERANCE PAY PLAN




Effective July 1, 2007





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	INTRODUCTION & BACKGROUND
	 	 	1	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	ARTICLE II BENEFITS
	 	 	4	 
	2.01 Severance Benefits
	 	 	4	 
	2.02 Eligibility
	 	 	7	 
	2.03 Manner and Form of Payment
	 	 	8	 
	2.04 Timing of Payment
	 	 	8	 
	2.05 Reemployment
	 	 	9	 
	2.06 Impact on Other Benefits
	 	 	10	 
	2.07 Conditions on Payment of Benefits
	 	 	10	 
	2.08 Offset For Other Severance Benefits
	 	 	10	 
	2.09 Maximum Benefits
	 	 	11	 
	ARTICLE III CLAIMS PROCEDURE
	 	 	11	 
	3.01 Right to File a Claim
	 	 	11	 
	3.02 Denial of a Claim
	 	 	11	 
	3.03 Claim Review Procedure
	 	 	12	 
	3.04 Requirement to Follow Claims Procedure
	 	 	12	 
	ARTICLE IV ADMINISTRATION
	 	 	12	 
	4.01 Named Fiduciary
	 	 	12	 
	4.02 The Committee
	 	 	13	 
	4.03 Standard of Fiduciary Duty
	 	 	14	 
	4.04 Compensation and Expenses of Committee
	 	 	14	 
	4.05 Records
	 	 	14	 
	4.06 Consistency of Determination
	 	 	15	 
	4.07 Indemnification of Committee
	 	 	15	 
	4.08 No Action with Respect to Own Benefit
	 	 	15	 
	ARTICLE V AMENDMENT AND TERMINATION
	 	 	15	 
	ARTICLE VI MISCELLANEOUS
	 	 	16	 
	6.01 Right to Assets
	 	 	16	 
	6.02 No Inducement, Contract or Guarantee of Employment
	 	 	16	 
	6.03 Spendthrift
	 	 	16	 
	6.04 Conclusiveness of Records
	 	 	16	 
	6.05 Adoption by Affiliate
	 	 	17	 
	6.06 Payment of Expenses
	 	 	17	 
	6.07 Governing Law
	 	 	17	 
	6.08 Right to Require Information and Reliance Thereon
	 	 	17	 
	6.09 Construction
	 	 	17	 
	6.10 Special Rules under Section 409A
	 	 	18	 
	ADOPTION OF PLAN
	 	 	18	 
	APPENDIX A SEPARATION AGREEMENT AND GENERAL RELEASE
	 	 	A-1	 






 









 






ADAMS RESPIRATORY THERAPEUTICS, INC.

SEVERANCE PAY PLAN




INTRODUCTION & BACKGROUND




     Adams Respiratory Therapeutics, Inc. (the “Company”) established this Adams Respiratory
Therapeutics, Inc. Severance Pay Plan (the “Plan”) in order to provide transitional income to
certain employees who are involuntarily terminated under certain conditions. The Plan supersedes
all prior written or unwritten severance pay plans, notice pay plans, practices or programs offered
or established by the Company or any other Participating Employer except for individual employment
contracts, change in control agreements or other similar arrangements providing severance pay or
similar benefits. The Plan is intended to be a “welfare plan,” but not a “pension plan,” as
defined in ERISA Sections 3(1) and 3(2), respectively, and the Company intends that the Plan comply
with all applicable provisions of ERISA.



ARTICLE I

DEFINITIONS



For purposes of the Plan, the following terms shall have the meaning set forth below unless a
different meaning is plainly required by the context.



Affiliate means any entity which is a member of a group which includes the Company and is defined
in Code §414(b) or (c).



Code means the Internal Revenue Code of 1986, as amended from time to time.



Committee means the group of persons responsible for Plan administration. See Section 4.02. This
term is interchangeable with “Plan Administrator.”



Company means Adams Respiratory Therapeutics, Inc., a Delaware corporation.



Compensation Committee means the Compensation Committee of the Board of Directors of the Company.



Effective Date means July 1, 2007.



Eligible Employee means an Employee who is a full-time employee (as classified by the Company or a
Participating Employer under its standard personnel practices) of a Participating Employer.
Notwithstanding the foregoing, the following Employees shall not be Eligible Employees: (i) leased
employees who, pursuant to an agreement between a Participating Employer and any other person or
leasing organization, has performed services for the Participating Employer (or for the
Participating Employer and related persons determined in accordance with Code Section 414(n)(6)) on
a substantially full-time basis for a period of at least one year, and such services are performed
under the





 









 







primary direction or control of the Participating Employer, (ii) individuals classified by a
Participating Employer as temporary employees or casual employees, (iii) individuals classified by
a Participating Employer as independent contractors (including those who are at any time
reclassified as employees by the Internal Revenue Service or a court of competent jurisdiction),
(iv) individuals whose terms and conditions of employment are governed by a collective bargaining
agreement, unless such collective bargaining agreement expressly provides that benefits are
provided under this Plan and the applicable collective bargaining agreement is in effect at the
time an Employee otherwise becomes eligible under this Plan, (v) employees of any joint venture
(regardless of legal characterization and as determined in the exclusive discretion of the Plan
Administrator), (vi) employees employed by any entity which is not designated as a Participating
Employer, and (vii) any other employee or person designed by the Committee as not being eligible to
participate.



Employee means any person who is within the meaning of “employee” for federal tax withholding
purposes and who is receiving compensation for services rendered to a Participating Employer. The
following individuals shall not be considered Employees hereunder:




     (a) Any person serving as a corporate director only; or



     (b) Any person who is an independent contractor and/or for whom the Participating Employer is
not required to make Social Security contributions. This also includes any person who the
Participating Employer classifies as an independent contractor with the person’s consent and who
later becomes classified as an Employee. Any person who pays or agrees to pay self-employment tax
in lieu of withholding shall be deemed to have consented to his or her designation as an
independent contractor. If an independent contractor subsequently becomes classified as an
Employee, such person will be designated an Employee for purposes of this Plan prospectively from
the date such classification is changed and agreed upon by the Participating Employer rather than
from the effective date of such change. Such person shall not be designated an Eligible Employee
unless otherwise determined by the Participating Employer.


ERISA means the Employee Retirement Income Security Act of 1974, as amended, including any
regulations issued thereunder.



Fiduciary means a fiduciary, as defined in ERISA section (3)(21)(A).



Job Elimination as a reason for termination of employment includes a reduction in work force,
completion of assignment, job restructuring, corporate divestiture, corporate reorganization, or
other job elimination or qualifying event, all as determined in the discretion of the Committee.



Misconduct means the following, as determined by the Committee in its sole discretion: (i) the
commission of any criminal offense on the job or relating to the ability of the employee to carry
out the job, as a representative of the Company or a Participating




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Employer, (ii) violation of policies, rules or regulations of the Company or the employee’s
Participating Employer, (iii) dishonesty, including theft or misappropriation of the property of an
employee or of the Company or a Participating Employer, (iv) falsification of personnel or other
records, (v) misuse or unauthorized removal from the Company’s or a Participating Employer’s
premises or property of any records of information, (vi) bribery, (vii) unlawful manufacture,
distribution, dispensing, possession or use of a controlled substance or alcoholic beverage in the
work place, (viii) impairment on the job or on the Company’s or a Participating Employer’s premises
from the use of a controlled substance or alcoholic beverages, (ix) fighting on the Company’s or a
Participating Employer’s premises or while working off premises, (x) insubordination, (xi) defacing
or damaging property or equipment of the Company or a Participating Employer, or (xii) any other
misconduct adversely affecting or detrimental to the Company’s or a Participating Employer’s
operation or reputation. Misconduct does not mean mere failure by an Employee, after best efforts,
to meet performance expectations.



Notice means the date the Company or a Participating Employer notifies the Eligible Employee that
his or her employment with the Participating Employer will be involuntarily terminated either
immediately or effective as of a future date.



Pay means the Eligible Employee’s regular base straight-time compensation (but excluding overtime,
bonuses or other compensation not considered to be base straight-time compensation by the Committee
in its full discretion) in effect as of the date the Eligible Employee receives Notice, unless the
Participating Employer determines otherwise.



Participating Employer means the Company and any other entity related to the Company who is deemed
by the Compensation Committee, in its exclusive discretion, as able to offer the benefits of this
Plan to any one or more of its Employees. Until otherwise designated by the Compensation
Committee, the following subsidiaries of the Company are approved as Participating Employers: Adams
Respiratory Products, Inc. and Adams Respiratory Operations, Inc.



Plan means the Adams Respiratory Therapeutics, Inc. Severance Pay Plan, as amended from time to
time.



Plan Year means the calendar year.



Separation Agreement means an agreement between an Eligible Employee and a Participating Employer
(in substantially the form attached hereto as Appendix A, or any other form specified by the
Participating Employer, as such form may be determined from time to time and at the Participating
Employer’s full discretion) that includes a waiver of all claims the Eligible Employee might have
against the Company, a Participating Employer, the Plan Administrator, and any other parties
designated in the Separation Agreement, and certain restrictive covenants relating to the
Participant’s post-termination activities. Signing of this Separation Agreement is a condition of
the Eligible





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Employee’s receipt of benefits under this Plan.



Separation Date means the date that an Eligible Employee’s employment with the Company or a
Participating Employer terminates as determined in accordance with the Participating Employer’s
personnel records.



Severance Benefits means that payment and benefits, if any, calculated under Article II of this
Plan which are payable to an Eligible Employee in accordance with the terms and conditions of this
Plan.



Severance Pay means the payments, if any, calculated under Section 2.01 of this Plan which are
payable to an Eligible Employee in accordance with the terms and conditions of this Plan.



Specified Employee has the meaning given such term in Section 409A of the Code and the final
regulations thereunder, provided, however, that, as permitted in such regulations, the Company’s
Specified Employees and its application of the six-month delay rule of Code Section
409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors of
the Company, which shall be applied consistently with respect to all nonqualified deferred
compensation arrangements of the Company, including this Plan.



Target Annual Bonus means, with respect to a Participant, the Participant’s target bonus
opportunity under the annual bonus plan applicable to the Participant for the year in which the
Participant’s Separation Date occurs, or if no target bonus opportunity has been established for
the year in which the Participant’s Separation Date occurs, the year immediately preceding, but in
no event greater than one times the Participant’s base salary.



Years of Service means continuous years of employment from last date of hire. Only Years of
Service as a full-time Employee shall be counted. Years of Service shall mean full years only,
with no credit for partial years.




ARTICLE II

BENEFITS




2.01 Severance Benefits.




     (a) Upon termination of employment, an Eligible Employee who signs and does not revoke his or
her signature on a Separation Agreement shall be eligible to receive those benefits determined
under this Section 2.01. Any decision, award, action or determination made by the Committee as to
amount of benefit shall be made in its sole discretion, although the Committee may, if it chooses,
delegate determination of benefits to any other person or party. Although the Committee may, for
its own convenience, draft or create award matrices or other standard award practices, such
matrices and practices shall not be binding on the Committee. Past awards or determinations shall
in



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no way be determinative of future awards.




     (b) Subject to the provisions of 2.01(a), Severance Pay for Eligible Employees is determined
in accordance with the following schedule based on an Eligible Employee’s Years of Service.
Determination of employment status (for example, full-time or part-time) shall be made in the full
discretion of the Committee. For purposes of this Section 2.01(b), a “Week” shall be measured as
40 hours, regardless of the number of hours actually worked by the Eligible Employee in the typical
workweek.


Involuntary Termination due to Job Elimination




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Severance Pay (Weeks of Pay per Year of Service)
	Position	 	Severance Formula	 	1 Year	 	2 Years	 	3 Years	 	4 Years	 	5 Years	 	Etc.
	Section 16 Officer

	 	52 weeks Pay
(26 weeks Pay if
less than 6 months
after hire)
	 	 	52	 	 	 	52	 	 	 	52	 	 	 	52	 	 	 	52	 	 	 	52	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Senior Vice 

President or Vice 

President

	 	26 weeks Pay
(13 weeks Pay if
less than 6 months
after hire)
	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive Director 

or Director

	 	2 weeks Pay per
Year of Service
(minimum of 8
weeks, maximum of
26 weeks)
	 	 	8	 	 	 	8	 	 	 	8	 	 	 	8	 	 	 	10	 	 	+2; max of 26

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Manager or other 

Exempt Employee

	 	2 weeks Pay per
Year of Service
(minimum of 4
weeks, maximum of
26 weeks)
	 	 	4	 	 	 	4	 	 	 	6	 	 	 	8	 	 	 	10	 	 	+2; max of 26

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-exempt Employee

	 	1 week Pay per Year
of Service (minimum
of 2 weeks, maximum
of 13 weeks)
	 	 	2	 	 	 	2	 	 	 	3	 	 	 	4	 	 	 	5	 	 	+1; max of 13







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Involuntary Termination other than due to Job Elimination




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Severance Pay (Weeks of Pay per Year of Service)
	Position	 	Severance Formula	 	1 Year	 	2 Years	 	3 Years	 	4 Years	 	5 Years	 	Etc.
	Section 16 Officer

	 	26 weeks Pay
(13 weeks Pay if
less than 6 months
after hire)
	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Senior Vice 

President or Vice 

President

	 	13 weeks Pay
(7 weeks Pay if
less than 6 months
after hire)
	 	 	13	 	 	 	13	 	 	 	13	 	 	 	13	 	 	 	13	 	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive Director 

or Director

	 	1 week Pay per Year
of Service (minimum
of 4 weeks, maximum
of 13 weeks)
	 	 	4	 	 	 	4	 	 	 	4	 	 	 	4	 	 	 	5	 	 	+1; max of 13

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Manager or other 

Exempt Employee

	 	1 week Pay per Year
of Service (minimum
of 2 weeks, maximum
of 13 weeks)
	 	 	2	 	 	 	2	 	 	 	3	 	 	 	4	 	 	 	5	 	 	+1; max of 13

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-exempt Employee

	 	1 week Pay per Year
of Service (minimum
of 1 week, maximum
of 7 weeks)
	 	 	1	 	 	 	2	 	 	 	3	 	 	 	4	 	 	 	5	 	 	+1; max of 7







     (c) Accrued Vacation. Subject to the provisions of 2.01(a), a Participant shall
be entitled to payment for any accrued vacation as of the Separation Date.



     (d) Prorated Annual Bonus. Subject to the provisions of 2.01(a), a Participant who is
involuntarily terminated by reason of a Job Elimination (but not otherwise) shall be entitled to a
prorated annual bonus for which the Participant would have been eligible under the annual bonus
plan applicable to the Participant (the “Incentive Plan”) but for the Participant’s termination of
employment with a Participating Employer (a “Pro Rata Bonus”), calculated as follows: (i) if the
Separation Date occurs during the first six months of a Plan Year, the bonus payment shall equal
the Participant’s Target Annual Bonus under the Incentive Plan multiplied by a fraction (the
“Prorating Factor”), the numerator of which is the number of days in the Plan Year through the
Separation Date and the denominator of which is 365, or (ii) if the Separation Date occurs during
the last six months of a Plan Year, the bonus payment shall equal the annual bonus the Participant
would have received under the Incentive Plan for the year based on actual performance through the
end of the Plan Year, multiplied by the Prorating Factor.



     (e) Medical Benefits. Subject to the provisions of 2.01(a), if the Participant elects
to continue participation in any group medical, dental, vision and/or prescription drug plan
benefits under Section 4980B of the Code (COBRA), then for the same number of weeks following a
termination of employment for which a Participant is entitled to Severance Pay pursuant to Section
2.01(b) but not to exceed the period that the



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Participant is entitled to such coverage under COBRA (the “Coverage Period”), the Participating
Employer shall pay the excess of (i) the COBRA cost of such coverage over (ii) the amount that the
Participant would have had to pay for such coverage if he or she had remained employed during the
Coverage Period and paid the active employee rate for such coverage, provided, however, that if the
Participant becomes eligible to receive group health benefits under a program of a subsequent
employer or otherwise (including coverage available to the Participant’s spouse), the Participating
Employer’s obligation to pay the cost of health coverage as described herein shall cease, except as
otherwise provided by law, and provided, further, that the cost so paid on behalf of the
Participant by the Participating Employer will be deemed taxable income to the Participant to the
extent required by law.




     (f) Outplacement Services. Subject to the provisions of 2.01(a), for Participants at
the level of Manager of above, the Participating Employer shall provide outplacement services
though one or more outplacement organizations approved by the Committee. The level and type of
outplacement services that each Participant is eligible to receive shall be determined in the sole
discretion of the Committee on a case by case basis and the Committee is not bound by prior
determinations.



2.02 Eligibility.




     (a) Eligible Employees will be eligible to receive Severance Benefits under this Plan if all
of the following are satisfied: (i) the Eligible Employee is employed by a Participating Employer
at the time that the Eligible Employee’s employment is involuntarily terminated; (ii) the Committee
determines that the Eligible Employee is eligible for Severance Benefits; (iii) the Eligible
Employee signs and delivers to the Company or his or her Participating Employer a Separation
Agreement, and allows any permitted or required revocation period to expire without revoking or
causing his or her Separation Agreement to be revoked; and (iv) none of the restrictions listed
under subsection (b) applies.



     (b) An Eligible Employee will not have a qualifying termination of employment, and will not be
approved for payment of benefits, if the Eligible Employee:




     (i) Voluntarily terminates employment with the Company or a Participating Employer,
even if such voluntary termination is in anticipation of involuntary termination;




     (ii) Is involuntarily terminated, and is offered substantially similar employment (as
determined in the discretion of the Committee) with the Company, a Participating Employer,
or one of either of their affiliates, whether or not the Eligible Employee accepts such
substantially similar employment;




     (iii) Is involuntarily terminated in connection with the sale or transfer of any
portion of the Company’s or a Participating Employer’s business or assets, and is offered
reasonably comparable (as determined in the discretion of the



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Committee, without needing to be identical) employment with the buyer or transferee of
such business or assets, whether or not such offered employment is accepted by the Eligible
Employee;




     (iv) Is transferred or reassigned by the Company or a Participating Employer to a
position of substantially similar employment (as determined in the discretion of the
Committee); or




     (v) The Company or Participating Employer terminates the Eligible Employee’s
employment for Misconduct or otherwise “for cause.” For purposes of this Plan, “for cause”
means as described in the company’s policies and procedures (Administrative Bulletins)
regarding classification of terminations.



2.03 Manner and Form of Payment.




     Unless another method is chosen by the Plan Administrator, all benefits payable under this
Plan shall be paid to Participants in accordance with the Company’s normal payroll practices.
However, certain situations may impact the form or manner of payment, including:



     (a) Payment Upon Death of Eligible Employee. If an Eligible Employee dies after his
or her Notice, but prior to being paid benefits awarded under this Plan, such benefits shall be
paid to the Eligible Employee’s estate, unless directed by the Eligible Employee in writing to pay
such benefits in a different manner.



     (b) Withholding. Any payment of benefits to an Eligible Employee shall be subject to
withholding for state, local and federal income taxes and Social Security taxes.



     (c) Reductions. Amounts payable as benefits under the Plan shall be reduced by any
amounts (1) owed by the Eligible Employee to his or her Participating Employer; and/or (2) paid to
the Eligible Employee due to a plant closing or mass layoff under the Worker Adjustment and
Retraining Notification (“WARN”) Act, as amended, or any state or local law. Benefits payable
under this Plan shall not be reduced by amounts received under any salary continuation plan or
short-term disability plan.



     In addition, any severance benefit amount to which any Participant may otherwise be entitled
under the Plan shall be reduced by the amount of any salary, wages or other compensation (as
determined by the Committee) such Participant receives from a Participating Employer with respect
to any period of paid leave of absence of such Participant that immediately precedes any permanent
termination of the Participant’s employment with a Participating Employer.



2.04 Timing of Payment.




     Except as provided in this paragraph, payment of benefits under this Plan shall commence as
soon as administratively feasible after the Eligible Employee’s Separation



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Date, and the expiration of any applicable revocation period for the release of claims in the
Separation Agreement; provided that the conditions listed in Section 2.07 are met. Payment of Pro
Rata Bonus under Section 2.01(d) will be paid at the same time as annual bonuses are paid to active
employees with respect to the year in which the Participant’s Separation Date occurred, but not
beyond the period ending on the later of (i) March 15 of the first calendar year beginning after
the Separation Date, or (ii) the 15th day of the third month following the end of the
Company’s fiscal year in which the Separation Date occurred. For example, assuming the Company’s
fiscal year ends on June 30:





	 	•	 	if the Separation Date occurred between July 1, 2007 and December 31, 2007, the
payment must be made no later than September 15, 2008, and
	 
	 	•	 	if the Separation Date occurred between January 1, 2008 and June 30, 2008, the
payment must be made no later than March 15, 2009.





     Notwithstanding anything in this Plan to the contrary, if any amount or benefit that would
constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would
otherwise be payable or distributable under this Plan to a Participant who is a Specified Employee
as of his or her “separation from service” within the meaning of Code Section 409A, then, subject
to any permissible acceleration of payment by the Committee under Treas. Reg. Section
1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi)
(payment of employment taxes):



          (a) if the payment or distribution is payable in a lump sum, the Participant’s right to
receive payment or distribution of such non-exempt deferred compensation will be delayed until the
earlier of the Participant’s death or the first day of the seventh month following the
Participant’s separation from service within the meaning of Code Section 409A; and



          (b) if the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month period immediately
following the Participant’s separation from service will be accumulated and the Participant’s right
to receive payment or distribution of such accumulated amount will be delayed until the earlier of
the Participant’s death or the first day of the seventh month following the Participant’s
separation from service within the meaning of Code Section 409A, whereupon the accumulated amount
will be paid or distributed to the Participant and the normal payment or distribution schedule for
any remaining payments or distributions will resume.



2.05 Reemployment.




     Notwithstanding any other provision of this Plan to the contrary, a Participant who is
re-employed by a Participating Employer (a) prior to his or her receipt of benefits under this
Plan, or (b) while he or she is currently receiving payments or benefits under this Plan, shall not
be entitled to any further benefits under the Plan after the date of re-employment and all benefit
payments under the Plan will end immediately upon the



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Participant’s re-employment date.




2.06 Impact on Other Benefits.




     As of an Eligible Employee’s Separation Date, the Eligible Employee’s active participation in
any employee benefit plan, program or policy sponsored or subsidized by a Participating Employer
shall cease unless otherwise continued pursuant to the terms of such plan, program or policy.



2.07 Conditions on Payment of Benefits.




     Payment of benefits under this Plan shall be subject to and conditioned upon the Eligible
Employee’s compliance with each of the following requirements:



     (a) The Eligible Employee must return his or her employer’s property on or before his or her
last day worked;



     (b) The Eligible Employee must continue to work in a satisfactory manner during any notice
period through the Separation Date or, if the Eligible Employee is released from performing
job-related duties earlier by his or her manager, through his or her last day worked;



     (c) The Eligible Employee must cooperate in transitioning all of the Eligible Employee’s work
in consultation with his or her manager or other designated official; and



     (d) The Eligible Employee must refrain from taking any action that would violate the terms and
conditions of the Separation Agreement.



2.08 Offset For Other Severance Benefits.




     To the extent permitted by law, benefits hereunder shall be reduced by any severance pay or
similar payments required under federal, state, local or foreign law (each individually and
collectively a “Local Law”), to which an Eligible Employee is, or in the future becomes, entitled
(other than government paid unemployment benefits). In the event that the Eligible Employee has
already received partial payment hereunder, and is subsequently entitled to any severance or
similar payment under any Local Law, the amount subsequently paid under this Plan shall be reduced
by the amount of such payment under such Local Law. Furthermore, to the extent an Employee
receives severance or other termination payments, or benefits from a Participating Employer
pursuant to an individually negotiated employment or severance agreement, resolution of litigation,
offer letter, or any other similar individual arrangement (“Individual Arrangement”), unless the
Committee provides otherwise, any payments and/or benefits otherwise payable to the Employee under
this Plan shall be reduced by the amount of any such payments or benefits provided to the Employee
under such Individual Arrangement.



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2.09 Maximum Benefits.




     Notwithstanding anything to the contrary herein, in order to assure that the Plan is not a
“pension plan” for purposes of ERISA, in no event shall the benefit available to a Participant
under Article II exceed two times such Participant’s annual compensation from the Participating
Employer for the preceding year (annualized in the case of a partial year of service during such
preceding year), nor shall payment extend beyond 24 months after the Participant’s Separation Date.
For purposes of this Section 2.09, annual compensation shall mean straight time pay plus the
Participant’s target annual bonus as of the Separation Date. When necessary, the Committee shall
reduce the severance benefits to comply with this Section 2.09.



ARTICLE III

CLAIMS PROCEDURE




3.01 Right to File a Claim.




     Any former Eligible Employee who believes that he or she is entitled to a benefit hereunder
which has not been received or which is different than that which has been officially communicated
to the former Eligible Employee may file a claim in writing with the most senior official
responsible for human resource matters at his or her former Participating Employer (the “Human
Resources Manager”). Failure to submit such claim within 180 days of the Eligible Employee’s
Separation Date will result in the denial of the claim, and may result in disqualification for
payment of benefits under the Plan. Employees who do not receive official communication of
eligibility (and a release) in connection with their termination shall be considered to have had
their claim hereunder denied.



3.02 Denial of a Claim.




     The Human Resources Manager at the former Eligible Employee’s Participating Employer shall
make an initial determination of eligibility or shall delegate the responsibility for such initial
determination to any other party. Any claimant whose claim to any benefit hereunder has been
denied in whole or in part shall normally receive a notice from the Human Resources Manager within
90 days of the date the claim is submitted. If, however, the Human Resources Manager, or his or
her delegee, determines that an extension of time is required, the claimant will be notified in
writing of the need for the extension within 90 days after receipt of the claim. The extension
notice will also include the date by which the Human Resources Manager expects to make the benefit
determination. Any notice of the denial of the claim will set forth the specific reasons for such
denial, specific references to the Plan provisions on which the denial was based, what information
or materials would be required in order to reverse the denial and an explanation of the procedure
for review of the denial.



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3.03 Claim Review Procedure.




     A claimant may appeal the denial of his or her initial claim to the Plan Administrator by
written request for review to be made within 60 days after receiving the initial notice of the
denial from the Human Resources Manager of the former Eligible Employee’s Participating Employer.
The request for review shall set forth all grounds on which it is based, together with supporting
facts and evidence which the claimant deems pertinent, and the Plan Administrator shall give the
claimant the opportunity to review relevant Plan documents in preparing the request. The Plan
Administrator may require the claimant to submit such additional facts, documents or other material
as it deems necessary or advisable in making its review. The Plan Administrator will provide the
claimant a written or electronic notice of the decision within 60 days after receipt of the request
for review, except that, if there are special circumstances requiring an extension of time for
processing, the 60-day period may be extended for an additional 60 days. If the Plan Administrator
determines that an extension of time is required, the claimant will be notified in writing of the
extension within 60 days after the Plan Administrator’s receipt of the request for review. The
extension notice will also include the date by which the Plan Administrator expects to complete the
review. The Plan Administrator shall communicate to the claimant in writing its decision, and if
the Plan Administrator confirms the denial, in whole or in part, the communication shall set forth
the reasons for the decision and specific references to the Plan provisions on which the decision
is based. Any suit for benefits must be brought within six months after the date the Plan
Administrator (or his or her designee) has made a final denial (or deemed denial) of the claim.



3.04 Requirement to Follow Claims Procedure.




     Utilization of the claims procedures set forth in this Article III is a condition of payment
of benefits under the Plan. Failure to follow the claims procedure described in Article III will
result in the denial of an Eligible Employee’s claim, and may result in the Eligible Employee’s
disqualification for payment of benefits under the Plan.



ARTICLE IV

ADMINISTRATION




4.01 Named Fiduciary.




     The Committee is named as the Fiduciary for operation of the Plan and shall have the authority
to control and manage the operation and administration of the Plan. The Committee in the exercise
of its authority shall discharge its duties with respect to the Plan in accordance with ERISA and
corresponding regulations, as amended from time to time.



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4.02 The Committee.




     (a) The Committee shall consist of those certain officers and employees of the Company as
appointed by the Company’s president or chief executive officer. All members shall serve as such
without compensation. Upon termination of his or her employment with the Company, or upon
replacement by the Company’s president or chief executive officer, an individual shall cease to be
a member of the Committee. A member may resign at any time by written notice to the Committee.



     (b) The Committee shall have complete control of the administration of the Plan with all
powers necessary to enable it to properly carry out the provisions of the Plan. In addition to all
implied powers and responsibilities necessary to carry out the objectives of the Plan and to comply
with the requirements of ERISA, the Committee shall have the following specific powers and
responsibilities, all of which may be exercised or delegated in its sole discretion:




     (i) To construe the Plan and to determine all questions arising in the administration,
interpretation and operation of the Plan, including questions of fact;




     (ii) To exercise such powers of amendment and termination as are granted to it
pursuant to Article IV of the Plan;




     (iii) To decide all questions of interpretation or of fact relating to the eligibility
to participate in the benefits of the Plan;




     (iv) To determine the benefits of the Plan to which any Eligible Employee or former
Eligible Employee may be entitled;




     (v) To keep records of all acts and determinations of the Committee, and to keep all
such records, books of accounts, data and other documents as may be necessary for the
proper administration of the Plan;




     (vi) To prepare and distribute information concerning the Plan as required by
applicable law, including, but not limited to, all information which is required to be
distributed by ERISA, the regulations thereunder, or by any other applicable law;




     (vii) To file with the Secretary of Labor such reports and additional documents as may
be required by ERISA and regulations issued thereunder, including, but not limited to,
summary plan description, modifications and changes, annual reports, terminal reports and
supplementary reports;




     (viii) To file with the Secretary of the Treasury all reports and information required
to be filed by the Internal Revenue Code, ERISA and regulations issued under each;



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     (ix) To delegate any duty or administrative function to any third party;




     (x) To appoint Affiliate administrators and to delegate such duties to each Affiliate
administrator or person as the Committee deems appropriate;




     (xi) To pay the expenses of administering the Plan or reimburse the Company or other
person performing administrative services with respect to the Plan if the Company or such
other person directly pays such expenses at the request of the Committee; and




     (xii) To do all things necessary to operate and administer the Plan in accordance with
its provisions and in compliance with applicable provisions of federal law.



4.03 Standard of Fiduciary Duty.




     Any Fiduciary, or any person designated by a Fiduciary to carry out Fiduciary responsibilities
with respect to the Plan, shall discharge his duties solely in the interests of the Eligible
Employees and beneficiaries for the exclusive purpose of providing them with benefits and defraying
the reasonable expenses of administering the Plan. Any Fiduciary shall discharge his duties with
the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matter would use in the conduct of an enterprise
of a like character and with like aims. Any Fiduciary shall discharge his duties in accordance
with the documents and instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of ERISA. Notwithstanding any other provisions of the Plan, no
Fiduciary shall be authorized to engage in any transaction that is prohibited by Sections 408 and
2003(a) of ERISA or Code Section 4975 in the performance of its duties hereunder.



4.04 Compensation and Expenses of Committee.




     The members of the Committee shall receive no compensation for its duties hereunder, but the
Committee shall be reimbursed for all reasonable and necessary expenses incurred in the performance
of its duties, including counsel fees and expenses. Such expenses of the Committee, including the
compensation of administrators, actuaries, counsel, agents or others that the Committee may employ,
shall be paid by Company.



4.05 Records.




     The Committee shall keep or cause to be kept books and records with respect to the operations
and administration of this Plan.



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4.06 Consistency of Determination.




     In rendering its determination on any matter within its discretion under any section of this
Plan, the Committee shall not be bound by past interpretations and is not required to be consistent
regarding its determinations.



4.07 Indemnification of Committee.




     To the extent permitted under ERISA, the Plan shall indemnify the Committee and its members
against any cost or liability that it or its members may incur in the course of administering the
Plan and executing the duties assigned pursuant to the Plan. The Company shall indemnify the
Committee and its members against any personal liability or cost not provided for in the preceding
sentence which it or its members may incur as a result of any act or omission in relation to the
Plan or its Eligible Employees. The Company may purchase fiduciary liability insurance to insure
its obligation under this Section.



4.08 No Action with Respect to Own Benefit.




     No member of the Committee shall take part in any discretionary action in connection with his
participation as an Eligible Employee under the Plan. All such action shall be taken by the
remaining Committee members, if any, or otherwise by the Company through the Company’s president or
chief executive officer.



ARTICLE V

AMENDMENT AND TERMINATION




     The Company’s Board of Directors or the Compensation Committee shall be authorized to adopt or
terminate the Plan on behalf of the Company, and to approve and execute any amendment or amendments
to the Plan required by law or which are otherwise deemed advisable. Notwithstanding the above
language or any other limitation in this Plan, the Committee may modify, on a retroactive or
prospective basis, any provision of the Plan, or any Appendix to the Plan, without the consent of
the Board of Directors or the Compensation Committee, unless such amendment would significantly
increase or decrease the liabilities of the Plan. The Committee may make such modifications
without need of a formal amendment or formal resolution by substituting a revised Appendix in place
of a former Appendix.



     The Company has the exclusive authority to amend the Plan and no Affiliate shall have any
right to amend the Plan. Any amendment to the Plan by the Company shall be binding upon every
Participating Employer without further action by such Participating Employer. No Participating
Employer other than the Company shall have the right to terminate the Plan. Upon termination or
discontinuance of the Plan, all payments with respect to benefits shall be made only with respect
to claims incurred on or prior to the date of the Plan’s termination.



     The Committee also may amend the Summary Plan Description at any time by



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preparation and publication of a revised SPD (or SMM). Any amendment will apply to those
currently receiving benefits as well as future benefit recipients.




     Nothing in this Plan, any Summary Plan Description issued in connection with this Plan, or any
other document describing, interpreting or relating to the Plan shall be construed to provide
vested, nonforfeitable, nonterminable, or nonchangeable benefits or rights thereto. No
communication, written or oral may modify, supersede, or void the written terms of the Plan unless
such communication constitutes a valid amendment of the Plan executed by a person or persons
granted authority hereunder to do so.



ARTICLE VI

MISCELLANEOUS




6.01 Right to Assets.




     Neither the establishment of the Plan, creation of any fund or account, nor the payment of
Severance Benefits under the Plan shall be construed as giving any legal or equitable right to any
Eligible Employee, former Eligible Employee or other person against the Company, any Participating
Employer or their officers or employees except as expressly provided herein, and all rights under
any Plan shall be satisfied, if at all, only out of the general assets of the Company.



6.02 No Inducement, Contract or Guarantee of Employment.




     The Plan does not constitute inducement or consideration for the employment of any Eligible
Employee, nor is it a contract between any Participating Employer and Eligible Employee.
Participation in the Plan shall not give any Eligible Employee any right to continued employment
with any Participating Employer, and each Participating Employer retains the right to hire and
discharge any Eligible Employee at any time, with or without cause, as if the Plan had never been
adopted.



6.03 Spendthrift.




     Except as permitted by law and this section, no assignment of any rights or benefits arising
under the Plan shall be permitted or recognized. No rights or benefits are subject to attachment
or other legal or equitable process or subject to the jurisdiction of any bankruptcy court. If any
Eligible Employee is adjudicated bankrupt or attempts to assign any benefits, then in the Company’s
discretion, those benefits may cease. If that happens, the Committee may apply those benefits for
that Eligible Employee or his or her dependents as the Committee sees fit. Neither the Company nor
any Participating Employer shall be liable for or subject to the debts, contracts, liabilities, or
torts of any person entitled to benefits under this Plan.



6.04 Conclusiveness of Records.




     The Plan Administrator shall be permitted to rely on the records of the Company



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or any Participating Employers with respect to age, service, employment history, employment
termination, compensation, absences, illnesses and all other relevant matters, without further
investigation. Such records shall be presumed correct and conclusive for purposes of the Plan
Administrator’s duties in administration of, and the resolution of claims arising under, the Plan.




6.05 Adoption by Affiliate.




     Upon adoption of this Plan by the Company and thereafter, Affiliates designated as
Participating Employers by the Company, either formally or informally, will automatically become
Participating Employers for purposes of this Plan without any further action on their part.



6.06 Payment of Expenses.




     The Company and, to the extent deemed appropriate by the Committee, the Participating
Employers shall pay all the expenses of administration of the Plan and the expenses of the
Committee, and any other expenses incurred at the direction of the Committee.



     6.07 Governing Law.



     The Plan shall be governed, construed, administered and regulated in all respects under the
laws of the State of Delaware, to the extent not preempted by ERISA.



6.08 Right to Require Information and Reliance Thereon.




     As a condition precedent to the receipt of benefits under this Plan, the Committee and
Participating Employers may each require Eligible Employees to provide them and their agents with
such information, in writing, and in such form as they deem necessary. In addition, the Committee
and each Participating Employer may rely on such information supplied by Eligible Employees without
need of further investigation for the purpose of carrying out their duties or any other function
under the Plan. Any payment to an Eligible Employee in accordance with the provisions of the Plan
in good faith reliance upon any written information provided by the Eligible Employee shall be in
full satisfaction of all claims by the Eligible Employee, his heirs, estate or any other interested
party.



6.09 Construction.




     One gender includes the other, and the singular and plural include each other when the meaning
would be appropriate. The Plan’s headings and subheadings have been inserted for convenience of
reference only and must be ignored in any construction of the provisions. If a provision of this
Plan is illegal or invalid, that illegality or invalidity does not affect other provisions. Any
term with an initial capital not expected by capitalization rules is a defined term according to
Article I. This Plan shall be construed



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according to the applicable provisions of ERISA and any regulations promulgated thereunder.




6.10 Special Rules under Section 409A.




     Notwithstanding anything in the Plan to the contrary, to the extent that any amount or benefit
would constitute “deferred compensation” for purposes of Section 409A of the Code would otherwise
be payable or distributable under the Plan by reason of a Eligible Employee’s termination of
employment, such amount or benefit will not be payable or distributable to the Eligible Employee
unless: (i) such termination of employment meets the description or definition of “separation from
service” in Section 409A of the Code and applicable regulations, or (ii) the payment or
distribution of such amount or benefit would be exempt from the application of Section 409A of the
Code by reason of the short-term deferral exemption or otherwise.



ADOPTION OF PLAN




     As evidence of the adoption of the Adams Respiratory Therapeutics, Inc. Severance Pay Plan,
this document is signed by its duly authorized officer, and effective as of July 1, 2007.



	 	 	 	 	 
	 	ADAMS RESPIRATORY THERAPEUTICS, INC.

 	 
	Date:  __________________, 2007 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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APPENDIX A




(for employees other than in a Reduction in Force

NOT FOR USE IN A REDUCTION IN FORCE)




SEPARATION AGREEMENT AND GENERAL RELEASE




______________________ (Date Given to Employee)



This Separation Agreement and General Release (this “Agreement”) is entered into by and
between Adams Respiratory Therapeutics, Inc. (the “Company”) and the undersigned employee
(“Employee”).



Notice to Employee:



Under the Adams Respiratory Therapeutics, Inc. Severance Pay Plan you are eligible to receive
severance pay if you agree to waive all your potential claims against the Company and agree to the
other terms in this Separation Agreement. This means that you cannot sue or pursue any other claim
against the Company if you sign this release. PLEASE READ THIS DOCUMENT CAREFULLY BEFORE YOU SIGN
IT. ALSO, PLEASE FEEL FREE TO CONSULT AN ATTORNEY OR OTHER REPRESENTATIVE BEFORE SIGNING THIS
DOCUMENT. YOU HAVE TWENTY-ONE (21) DAYS TO THINK ABOUT IT AND CONSULT WHOMEVER YOU WISH.



For purposes of this Agreement, the term “Company” means Adams Respiratory Therapeutics, Inc., its
subsidiaries and affiliates, all of its officers, directors, employees, attorneys and agents
(including your supervisor). This means that, if you sign this Agreement, you cannot sue the
Company or any of its employees or agents.





	1.	 	You are entitled to receive severance pay and benefits under the Severance Pay Plan. See the
Summary Plan Description for details.






	2.	 	IF YOU SIGN THIS AGREEMENT, YOU ARE PERMANENTLY WAIVING (GIVING UP) YOUR RIGHT TO SUE THE
COMPANY FOR ANY REASON. YOUR WAIVER WILL INCLUDE ANY RIGHTS YOU HAVE TO SUE THE COMPANY UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT, TITLE VII OF THE CIVIL RIGHTS ACT, THE AMERICANS
WITH DISABILITIES ACT, STATE WRONGFUL TERMINATION LAWS, AND ALL OTHER LAWS AND REGULATIONS
UNDER WHICH YOU MIGHT BE ABLE TO ASSERT ANY CLAIM AGAINST THE COMPANY.






	3.	 	You will be waiving all claims which have arisen or may arise in the future, whether known or
unknown, that are based on acts or events that have occurred up until the date of signing of
this Agreement.




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	4.	 	Because this waiver involves your legal rights, you should consider talking with an attorney
before signing this Agreement. You have twenty-one (21) days from the date listed at the top
of this page to make your decision. If you have not signed this Agreement by the end of the
twenty-first day after the date listed above, you will be ineligible to receive any severance
pay.






	5.	 	In addition, you will have seven (7) days from the date you sign this Agreement to revoke it.
This means that if you change your mind for any reason after signing the Agreement, you can
revoke it if you notify the Company within seven (7) days. You must notify the Company in
writing and the notice must be received by the Company within seven (7) days of the date you
sign this Agreement. You will receive your severance pay under this Agreement on the eighth
(8th) day after you sign the Agreement. Any revocation of this Agreement must be
made in writing and delivered within the seven-day revocation period to: Director of Human
Resources, Adams Respiratory Therapeutics, Inc., 4 Mill Ridge Lane, Mill Ridge Farm, Chester,
NJ 07930.




Part I Release of Claims.



In consideration of the severance pay from the Company set forth above, the receipt and sufficiency
of which are hereby acknowledged, the undersigned Employee hereby releases and forever discharges
the Company and all of its affiliates, agents and representatives, from any and all claims and
causes of action (including but not limited to costs and attorney’s fees), of whatever kind or
nature, under any federal, state or local statute, ordinance or under the common law, including,
but not limited to the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, 29 U.S.C.
§ 621, et seq., the Civil Rights Act of 1964 (“Title VII”), as amended (including
amendments made through the Civil Rights Act of 1991), 42 U.S.C. § 2000e, et seq., 42 U.S.C. §
1981, as amended, the Americans With Disabilities Act (“ADA”), as amended, 42 U.S.C. § 12101,
et seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701, et
seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C.
§ 301, et seq., the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §
2101, et seq., the Family and Medical Leave Act of 1993 (“FMLA”), as amended, 29
U.S.C. § 2601 et seq., the Fair Labor Standards Act (“FLSA”), as amended, 29 U.S.C. § 201
et seq., and the Employee Polygraph Protection Act of 1988, 29 U.S.C. § 2001,
et seq., that Employee has now or may have in the future, whether known or unknown,
which are based on acts or facts arising or occurring prior to the date of this Agreement.



Part II Restrictions on Employee’s Conduct.




          (a) General. Employee and the Company understand and agree that the purpose of the
provisions of this Part II is to protect legitimate business interests of the Company, as more
fully described below, and is not intended to impair or infringe upon Employee’s right to work or
earn a living. Employee hereby acknowledges and agrees (i) that Employee has received good and
valuable consideration for the post-employment restrictions set forth in this Part II in the form
of the compensation and benefits provided for in the Severance Pay Plan, and (ii) that the
post-employment restrictions set forth in this Part II are reasonable and that they do not, and
will not, unduly impair Employee’s ability to earn a living.



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          (b) Definitions. The following capitalized terms used in this Part II shall have the
following meanings:



          “Competitive Position” means any employment or consulting arrangement with a Competitor in
which Employee has duties for such Competitor that involve Competitive Services and that are the
same or substantially similar to those services actually performed by Employee for the Company;



          “Competitive Services” means the research and development, or manufacture, of respiratory
pharmaceuticals.



          “Competitor” means any Person engaged, wholly or in part, in Competitive Services.



          “Confidential Information” means all information regarding the Company, its activities,
business or clients that is the subject of reasonable efforts by the Company to maintain its
confidentiality and that is not generally disclosed by practice or authority to persons not
employed by the Company, including but not limited to trade secrets. “Confidential Information”
shall include, but is not limited to, financial plans and data concerning the Company; management
planning information; business plans; operational methods; market studies; marketing plans or
strategies; product development techniques or plans; customer lists; customer files, data and
financial information, details of customer contracts; current and anticipated customer
requirements; identifying and other information pertaining to business referral sources; past,
current and planned research and development; business acquisition plans; and new personnel
acquisition plans. “Confidential Information” shall not include information that has become
generally available to the public by the act of one who has the right to disclose such information
without violating any right or privilege of the Company. This definition shall not limit any
definition of “confidential information” or “trade secrets” or any equivalent term under state or
federal law.



          “Person” means any individual or any corporation, partnership, joint venture, limited
liability company, association or other entity or enterprise.



          “Principal or Representative” means a principal, owner, partner, shareholder, joint venturer,
investor, member, trustee, director, officer, manager, employee, agent, representative or
consultant.



          “Protected Customers” means any Person to whom the Company has sold its products or services
or solicited to sell its products or services, other than through general advertising targeted at
consumers, during the 12 months prior to the Separation Date.



          “Protected Employees” means employees of the Company who were employed by the Company or its
affiliates at any time within six months prior to the Separation Date, other than those who were
discharged by the Company or such affiliated employer without cause.



          “Restricted Period” means the number of weeks after the Separation Date for which Employee is
entitled to Severance Pay under the Severance Pay Plan.



          “Restricted Territory” means the State in which Employee’s principal place of



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work for the Company was located as of the Separation Date.




          “Restrictive Covenants” means the restrictive covenants contained in Part II of this
Agreement.



          “Separation Date” means the date of Employee’s termination of employment from the Company or
it affiliates.



          “Severance Pay Plan” means the Adams Respiratory Therapeutics, Inc. Severance Pay Plan, as
amended from time to time.



          (c) Restrictive Covenants.



               (i) Restriction on Disclosure and Use of Confidential Information. Employee
understands and agrees that the Confidential Information constitute valuable assets of the Company
and its affiliated entities, and may not be converted to Employee’s own use. Accordingly, Employee
hereby agrees that Employee shall not directly or indirectly, for himself or for others, without
the prior written consent of the Company reveal, divulge, or disclose to any Person not expressly
authorized by the Company any Confidential Information. This covenant is not intended to, and does
not, alter either the Company’s rights or Employee’s obligations under any state or federal
statutory or common law regarding trade secrets and unfair trade practices. However, Employee is
not restricted from disclosing or using Confidential Information that is required to be disclosed
by law, court order or other legal process.



               (ii) Nondisparagment. Employee hereby agrees that he shall not disparage, criticize
or otherwise publish or communicate any statements or opinions that are derogatory to or could
otherwise harm the business or reputation of the Company. However, Employee is not restricted from
making any factual statement that is required to be disclosed by law, subpoena, court order or
other legal process.



               (iii) Nonsolicitation of Protected Employees. Employee agrees that during the
Restricted Period, Employee shall not directly or indirectly on Employee’s own behalf or on behalf
of any other Person or otherwise, solicit or induce any Protected Employee to terminate his or her
employment relationship with the Company or to enter into employment with any other Person.



               (iv) Restriction on Relationships with Protected Customers. Employee hereby agrees
that, during the Restricted Period, Employee shall not, without the prior written consent of the
Company, directly or indirectly, on Employee’s own behalf or on behalf of any other Person or
otherwise, solicit, divert, take away or attempt to solicit, divert or take away a Protected
Customer for the purpose of providing or selling Competitive Services. However, the prohibition of
this covenant shall apply only to Protected Customers with whom Employee had Material Contact on
the Company’s behalf during the 12 months immediately preceding the Separation Date, and it does
not apply to the conduct of general advertising activities. For purposes of this Agreement,
Employee had “Material Contact” with a Protected Customer if (a) Employee had business dealings
with the Protected Customer on the Company’s behalf; (b) Employee was responsible for supervising
or coordinating the dealings between the Company and the Protected Customer; or (c) Employee
obtained Confidential Information about the customer as a result of my association with the
Company.



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               (v) Noncompetition with the Company. Employee hereby agree that, during the
Restricted Period, Employee will not, without prior written consent of the Company, directly or
indirectly seek or obtain a Competitive Position in the Restricted Territory with a Competitor.
Employee acknowledge that the Restricted Territory is reasonable.



          (d) Enforcement of Restrictive Covenants.



               (i) Rights and Remedies Upon Breach. In the event Employee breaches, or threatens to
commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the
right and remedy to enjoin Employee, preliminarily and permanently, from violating or threatening
to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by
any court or tribunal of competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the Company and that money
damages would not provide an adequate remedy to the Company. Such right and remedy shall be
independent of any others and severally enforceable, and shall be in addition to, and not in lieu
of, any other rights and remedies available to the Company at law or in equity. Without limiting
the foregoing sentence, in the event Employee breaches any of the provisions of the Restrictive
Covenants, (i) Employee shall cease to have any rights to payments and benefits under the Severance
Pay Plan, (ii) all payments and benefits thereunder to Employee shall cease, and (iii) Employee
shall repay to the Company any payments or benefits under the Severance Pay Plan that had already
been provided to Employee prior to such breach, including both cash payments and the value of
benefits continuation (calculated as the difference between COBRA benefits cost and the actual
amount charged to Employee for such coverage).



               (ii) Severability of Covenants. Employee acknowledges and agrees that the Restrictive
Covenants are reasonable and valid in time and scope and in all other respects. The covenants set
forth in Part II of this Agreement shall be considered and construed as separate and independent
covenants. Should any part or provision of any covenant be held invalid, void or unenforceable,
such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any
other part or provision of this Agreement. If any portion of the foregoing provisions is found to
be invalid or unenforceable because its duration, the territory, the definition of activities or
the definition of information covered is considered to be invalid or unreasonable in scope, the
invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the
intent of the Company and Employee in agreeing to the provisions of Part II of this Agreement will
not be impaired and the provision in question shall be enforceable to the fullest extent of the
applicable laws.



          (e) Governing Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to principles of conflicts of
laws. Employee hereby irrevocably consents to the exclusive jurisdiction of the state and federal
courts of the State of New Jersey, which shall have jurisdiction to hear and determine any claim,
cause of action or controversy arising from or relating to this Agreement.



(signatures on following page)




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SIGNATURE BY EMPLOYEE



I acknowledge that I have been advised to consult with an attorney prior to signing this Agreement.
I further acknowledge that the consideration for signing this Agreement is a benefit to which I
otherwise would not have been entitled had I not signed this Agreement.



I have read this entire document and I understand and agree to each of its terms. SPECIFICALLY, I
AGREE THAT BY SIGNING THIS DOCUMENT, I AM WAIVING MY RIGHTS TO SUE THE COMPANY AS SET FORTH ABOVE
IN PARAGRAPHS 2 AND 3. I also understand that this is the entire Agreement between the Company and
me regarding severance pay and the termination of my employment and that no other agreements or
promises about those matters, written or oral will be enforceable.




	 	 	 
	 

 

(Signature of Employee)	 	
 

 

(Date Signed)
	 	 	 
	 

 

(Print Employee Name)	 	
 

 

(Witness)





ACCEPTANCE BY THE COMPANY



The Company hereby enters into and accepts this Agreement as set forth above.




	 	 	 	 	 
	 	ADAMS RESPIRATORY THERAPEUTICS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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