Document:

exv10w36

Exhibit 10.36

INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of                     ,
200___ between Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the “Company”), and
                     (“Indemnitee”).

RECITALS

     WHEREAS, the Company desires to attract and retain highly qualified individuals, such as
Indemnitee, to serve the Company; and

     WHEREAS, highly competent persons have become more reluctant to serve corporations as
directors or in other capacities unless they are provided with adequate protection through
insurance or adequate indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation; and

     WHEREAS, the Company and Indemnitee recognize the significant risk of claims and actions
against a director that may arise from such director’s services to and activities on behalf of the
Company; and

     WHEREAS, the Company and Indemnitee recognize that directors, officers, and other persons in
service to corporations or business enterprises are being increasingly subjected to expensive and
time-consuming litigation relating to, among other things, matters that traditionally would have
been brought only against the Company or business enterprise itself; and

     WHEREAS, the Company and Indemnitee further recognize that although the Company may also
maintain liability insurance for the Company’s officers and directors, such insurance often
provides for coverage of limited scope, and that competent and experienced persons are often unable
or unwilling to serve as officers or directors unless they are protected by comprehensive liability
insurance or indemnification; and

     WHEREAS, the Company and Indemnitee recognize that Indemnitee may be entitled to
indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) which
expressly provides that the indemnification provisions set forth therein are not exclusive, and
thereby contemplates that contracts may be entered into between the Company and members of the
board of directors of the Company (the “Board”), officers and other persons with respect to
indemnification; and

     WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons; and

     WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased certainty of such protection
in the future; and

 

 

     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified; and

     WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of the Company and
any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder; and

     WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and
insurance as adequate in the present circumstances, and may not be willing to serve as a director
without adequate protection, and the Company desires Indemnitee to serve in such capacity; and

     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the Company on the condition that he be so indemnified.

AGREEMENT

     NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve or continue to serve as an
officer or director of the Company after the date hereof, the parties hereto agree as follows.

     1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In
furtherance of the foregoing indemnification, and without limiting the generality thereof, the
Company agrees as follows.

          (a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1(a) if, by
reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding
by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with
such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in
a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the
Indemnitee’s conduct was unlawful. Indemnitee shall not enter into any settlement in connection
with a Proceeding without ten (10) days prior notice to the Company.

          (b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by reason of his Corporate
Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding
brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the
Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the best

2

 

interests of the Company; provided, however, if applicable law so provides, no indemnification
against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as
to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent
that the Court of Chancery of the State of Delaware shall determine that such indemnification
may be made.

          (c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended
from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

     2. Contribution.

          (a) Whether or not the indemnification provided in Section 1 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee
in proportion to the relative benefits received by the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, from the transaction from which such action, suit or proceeding arose; provided, however,
that the proportion determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of the Company and all
officers, directors or employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other equitable considerations which
applicable law may require to be considered. The relative fault of the Company and all officers,
directors or employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal profit or advantage, the degree to
which their liability is primary or secondary and the degree to which their conduct is active or
passive.

          (b) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of contribution which may be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.

3

 

     3. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in.
any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.

     4. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the
Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by
the Company of a statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay pursuant to this Section 4
shall be unsecured and interest free. Notwithstanding the foregoing, the obligation of the Company
to advance Expenses pursuant to this Section 4 shall be subject to the condition that, if,
when and to the extent that the Company determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty
(30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by the Company that
Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final
judicial determination is made with respect thereto (and as to which all rights of appeal therefrom
have been exhausted or lapsed). If it is finally judicially determined that Indemnitee is not
entitled to be indemnified, then the amount required to repay Expenses shall bear interest at the
prime rate of interest of Bank of America, N.A. as of the date of such final judicial determination
plus three percent (3.0%) from the date such Expenses were advanced until paid.

     5. Procedures and Presumptions for Determination of Entitlement to Indemnification. It
is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable
as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the
parties agree that the following procedures and presumptions shall apply in the event of any
question as to whether Indemnitee is entitled to indemnification under this Agreement.

          (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification. Any failure of Indemnitee to provide such notice to the Company shall
not, however, relieve the Company of any liability or obligation which it may have to Indemnitee
under this Agreement or otherwise unless and only to the extent such failure actually causes an
adverse impact on the Company.

4

 

          (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 5(a) hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four
methods, which shall be at the election of the Board of the Company: (i) by a majority vote of the
Disinterested Directors (as defined in Section 12 below), even though less than a quorum;
(ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested
Directors, even though less than a quorum; (iii) by Independent Counsel (as defined in Section
12 below) in a written opinion to the Board, a copy of which shall be delivered to the
Indemnitee, if (A) there are no Disinterested Directors or if the Disinterested Directors so
direct, or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so
requests; or (iv) if so directed by the Board, by the stockholders of the Company.

          (c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 5(b) hereof, the Independent Counsel shall be selected as
provided in this Section 5(c). The Independent Counsel shall be selected by the Board, but
only an Independent Counsel to which Indemnitee does not reasonably object. Within ten (10) days
after such written notice of selection shall have been given, the Indemnitee shall deliver to the
Company, as the case may be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so selected does not meet
the requirements of “Independent Counsel” as defined in Section 12 of this Agreement, and
the objection shall set forth with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined that such objection
is without merit. If, within twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 5(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for resolution of any objection
which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom all objections are
so resolved or the person so appointed shall act as Independent Counsel under Section 5(b)
hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 5(b)
hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of
this Section 5(c), regardless of the manner in which such Independent Counsel was selected
or appointed.

          (d) For purposes of this Section 5, “Change in Control” means a change in control of
the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the corporation is then subject to such reporting requirement;
provided that, without limitation, such a Change in Control shall be deemed to have occurred if (i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities without the prior approval of at least

5

 

a majority of the members of the Board in office immediately prior to such acquisition; (ii)
the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in office immediately prior to such
transaction or event constitute less than a majority of the Board thereafter; or (iii) during any
period of two consecutive years, individuals who at the beginning of such period constituted the
Board (including for this purpose any new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the directors then still in
office who were directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board.

          (e) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Company (including by its directors or Independent Counsel) to have made a determination
prior to the commencement of any action pursuant to this Agreement that indemnification is proper
in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors or Independent Counsel) that Indemnitee
has not met such applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

          (f) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise (as defined in Section 12 below),
including financial statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with reasonable care by the
Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement.

          (g) If the person, persons or entity empowered or selected under Section 5 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such 60-day period may be extended
for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or
entity making such determination with respect to entitlement to indemnification in good faith
requires such additional time to obtain or evaluate documentation and/or information relating
thereto; and provided, further, that the foregoing provisions of this Section 5(g) shall
not apply if the determination of entitlement to indemnification is to be made by the stockholders
pursuant to Section 5(b) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination, the Board or the Disinterested
Directors, if

6

 

appropriate, resolve to submit such determination to the stockholders for their consideration
at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such
determination is made thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such determination is made
thereat.

          (h) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board of
Directors or stockholder of the Company shall act reasonably and in good faith in making a
determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any
costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and
the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

          (i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.

     6. Remedies of Indemnitee.

          (a) In the event that (i) a determination is made pursuant to Section 5 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 4 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 5(b) of this
Agreement within ninety (90) days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to this Agreement within twenty (20) days
after receipt by the Company of a written request therefor or (v) payment of indemnification is not
made within twenty (20) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to Section 5 of
this Agreement, Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such
indemnification either in an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction. Indemnitee shall commence such proceeding seeking an adjudication within
180 days following the date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 6(a). The Company shall not oppose Indemnitee’s right to seek any
such adjudication.

7

 

          (b) In the event that a determination shall have been made pursuant to Section 5(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 6 shall be conducted in all respects as a de novo trial
on the merits Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 5(b).

          (c) If a determination shall have been made pursuant to Section 5(b) of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 6, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
misstatement not materially misleading in connection with the application for indemnification, or
(ii) a prohibition of such indemnification under applicable law.

          (d) In the event that Indemnitee, pursuant to this Section 6, seeks a judicial
adjudication of his rights under, or to recover damages for breach of, this Agreement, or to
recover under any directors’ and officers’ liability insurance policies maintained by the Company,
the Company shall pay on his behalf, in advance, any and all expenses (of the types described in
the definition of Expenses in Section 12 of this Agreement) actually and reasonably
incurred by him in such judicial adjudication if Indemnitee ultimately is determined to be entitled
to such indemnification, advancement of expenses or insurance recovery.

          (e) The Company and the Indemnitee shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 6 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any such court that
the Company and the Indemnitee are bound by all the provisions of this Agreement.

          (f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.

     7. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders, a
resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or
judicial decision, permits greater indemnification than would be afforded currently under the
Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right and remedy shall be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.

8

 

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or
of any other Enterprise that such person serves at the request of the Company, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the maximum extent of
the coverage available for any director, officer, employee, agent or fiduciary under such policy or
policies. If at the time of the receipt of a notice of a claim pursuant to the terms hereof, the
Company has director and officer liability insurance in effect, the Company shall give prompt
notice of the commencement of such proceeding to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter take all commercially reasonable
action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of such proceeding in accordance with the terms of such policies.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

          (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.

          (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or
advancement of expenses from such other Enterprise.

     8. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:

          (a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision;

          (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or
similar provisions of state statutory law or common law; or

          (c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i) the Board of the
Company authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii)
the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.

9

 

     9. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is a director of the Company (or is or was
serving at the request of the Company as a director, officer, employee or agent of another
Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding
(or any proceeding commenced under Section 6 hereof) by reason of his Corporate Status,
whether or not he is acting or serving in any such capacity at the time any liability or expense is
incurred for which indemnification can be provided under this Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
assigns, spouses, heirs, executors and personal and legal representatives.

     10. Security. To the extent requested by Indemnitee and approved by the Board of the
Company, the Company may at any time and from time to time provide security to Indemnitee for the
Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to Indemnitee, may not be revoked or released without
the prior written consent of Indemnitee.

     11. Enforcement.

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to
serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving as a director of the Company.

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.

     12. Definitions. The following terms have the following definitions for purposes of
this Agreement.

          (a) “Corporate Status” describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other Enterprise that such person is or was
serving at the express written request of the Company.

          (b) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.

          (c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express
written request of the Company as a director, officer, employee, agent or fiduciary.

          (d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing

10

 

and binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or being or preparing to
be a witness in a Proceeding. Expenses also shall include Expenses incurred in connection with any
appeal resulting from any Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.

          (e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

          (f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a
director of the Company, by reason of any action taken by him or of any inaction on his part while
acting a director of the Company, or by reason of the fact that he is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of another Enterprise; in each
case whether or not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this Agreement; including one
pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee
pursuant to Section 6 of this Agreement to enforce his rights under this Agreement.

     13. Severability. The invalidity of unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.

     14. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute

11

 

a waiver of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

     15. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing
upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless
and only to the extent that such failure or delay actually causes an adverse impact on the Company.

     16. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (1) upon personal delivery to
the party to be notified, (2) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (3)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (4) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be
sent:

          (a) to Indemnitee at the address set forth below Indemnitee signature hereto; or

          (b) to the Company at:

Cornerstone BioPharma, Inc.

2000 Regency Parkway

Cary, NC 27511

Attention: Chief Executive Officer

or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.

     17. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

     18. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     19. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations
among the parties shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee
hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court

12

 

of the State of Delaware (the “Delaware Court”), and not in any other state or federal court
in the United States of America or any court in any other country, (b) consent to submit to the
exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out
of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any
claim that any such action or proceeding brought in the Delaware Court has been brought in an
improper or inconvenient forum.

[The next page is the signature page.]

13

 

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as
of the day and year first above written.

	 	 	 	 	 	 	 
	COMPANY:	 	Cornerstone BioPharma, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	INDEMNITEE:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Printed or Typed Name)	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 	 	Address:exv10w37

Exhibit 10.37

CORNERSTONE BIOPHARMA HOLDINGS, INC.

2005 STOCK INCENTIVE PLAN

(as Amended and Restated Effective October 31, 2008)

1. Purpose

     The purpose of this 2005 Stock Incentive Plan (as Amended and Restated Effective October 31,
2008) (the “Plan”) of Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the “Company”),
is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to
attract, retain and motivate persons who are expected to make important contributions to the
Company and by providing such persons with equity ownership opportunities and performance-based
incentives that are intended to align their interests with those of the Company’s stockholders.
Except where the context otherwise requires, the term “Company” shall include any of the Company’s
present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”)
and any other business venture (including, without limitation, joint venture or limited liability
company) in which the Company has a controlling interest, as determined by the Board of Directors
of the Company (the “Board”).

2. Eligibility

     All of the Company’s employees, officers, directors, and consultants and advisors who are
natural persons and who provide bona fide services to the Company not connected to a capital
raising transaction or the promotion or creation of a market for the Company’s securities are
eligible to receive options, restricted stock, restricted stock units and other stock-based awards
(each, an “Award”) under the Plan. Each person who receives an Award under the Plan is deemed a
“Participant”.

3. Administration and Delegation

     (a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.

     (b) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall

 

 

mean the Board or a
Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or officers.

     (c) Delegation to Officers. To the extent permitted by applicable law, the Board may
delegate to one or more officers of the Company the power to grant Awards to employees of the
Company or any of its present or future subsidiary corporations and to exercise such other powers
under the Plan as the Board may determine, provided that the Board shall fix the terms of the
Awards to be granted by such officers (including the exercise price of such Awards, which may
include a formula by which the exercise price will be determined) and the maximum number of shares
subject to Awards that the officers may grant; provided further, however, that no officer shall be
authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the
Company (as defined by Rule 16a-l under the Exchange Act).

4. Stock Available for Awards. Subject to adjustment under Section 8, Awards may be made
under the Plan for a maximum of 10,000,000 shares of common stock, $0.0001 par value per share, of
the Company (“Common Stock”). Notwithstanding any other terms of the Plan or individual Award
Agreements to the contrary, if any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part or results in any Common Stock not
being issued after October 31, 2008, the unused Common Stock covered by such Award shall be
immediately canceled and no longer available for granting additional Awards under the Plan.
Further, shares of Common Stock tendered to the Company by a Participant to exercise an Award after
October 31, 2008 shall not be added to the number of shares of Common Stock available for the grant
of Awards under the Plan. At no time while there is any Option (as defined below) outstanding and
held by a Participant who was a resident of the State of California on the date of grant of such
Option, shall the total number of shares of Common Stock issuable upon exercise of all outstanding
options and the total number of shares provided for under any stock bonus or similar plan of the
Company exceed the applicable percentage as calculated in accordance with the conditions and
exclusions of Section 260.140.45 of the California Code of Regulations (the “California
Regulations”), based on the shares of the Company which are outstanding at the time the calculation
is made.

5. Stock Options

     (a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option”.

     (b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of Cornerstone Biopharma Holdings, Inc., any of Cornerstone Biopharma
Holdings, Inc. present or future parent or subsidiary corporations as defined in Sections 424(e) or

-2-

 

(f) of the Code, and any other entities the employees of which are eligible to receive Incentive
Stock Options under the Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or
any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock
Option is not an Incentive Stock Option or for any action taken by the Board pursuant to Section
9(f), including without limitation the conversion of an Incentive Stock Option to a Nonstatutory
Stock Option.

     (c) Exercise Price. The Board shall establish the exercise price of each Option and
specify such exercise price in the applicable option agreement.

     (d) Duration of Options. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable option agreement.

     (e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at
the time or times specified by the Board).

     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:

          (1) in cash or by check, payable to the order of the Company;

          (2) except as the Board may otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;

          (3) when the Common Stock is registered under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board (“Fair Market
Value”), provided (i) such method of payment is then permitted under applicable law, (ii) such
Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum
period of time, if any, as may be established by the Board in its
discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements;

          (4) to the extent permitted by applicable law and by the Board, by (i) delivery of a
promissory note of the Participant to the Company on terms determined by the Board;

-3-

 

provided,
however, that the aggregate par value of the shares being purchased must be paid in cash, or (ii)
payment of such other lawful consideration as the Board may determine; or

          (5) by any combination of the above permitted forms of payment.

     (g) Substitute Options. In connection with a merger or consolidation of an entity with
the Company or the acquisition by the Company of property or stock of an entity, the Board may
grant Options in substitution for any options or other stock or stock-based awards granted by such
entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options contained in the other
sections of this Section 5 or in Section 2. Substitute Options shall not count against the overall
share limit set forth in Section 4(a), except as may be required by reason of Section 422 and
related provisions of the Code.

6. Restricted Stock; Restricted Stock Units

     (a) General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such
shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock,
the Board may grant Awards entitling the recipient to receive shares of Common Stock to be
delivered at the time such shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock
and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

     (b) Terms and Conditions. The Board shall determine the terms and conditions of a
Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue
price, if any.

     (c) Stock Certificates. Any stock certificates issued in respect of a Restricted Stock
Award shall be registered in the name of the Participant and, unless otherwise determined by the
Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company (or its designee). At the expiration of the applicable restriction periods, the Company (or
such designee) shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the
event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective
designation by a Participant, “Designated Beneficiary” shall mean the Participant’s estate.

7. Other Stock-Based Awards

     Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (“Other Stock Unit Awards”), including without

-4-

 

limitation stock
appreciation rights and Awards entitling recipients to receive shares of Common Stock to be
delivered in the future. Such Other Stock Unit Awards shall also be available as a form of payment
in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to
which a Participant is otherwise entitled. Other Stock Unit Awards may be paid in shares of Common
Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall
determine the conditions of each Other Stock Unit Award, including any purchase price applicable
thereto.

8. Adjustments for Changes in Common Stock and Certain Other Events

     (a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the number and class of securities and exercise price per share of each outstanding
Option, (iii) the repurchase price per share subject to each outstanding Restricted Stock Award,
and (iv) the terms of each other outstanding Award shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent determined by the Board.

     (b) Liquidation or Dissolution. In the event of a proposed liquidation or dissolution
of the Company, the Board shall upon written notice to the Participants provide that all then
unexercised Options will (i) become exercisable in full as of a specified time at least 10 business
days prior to the effective date of such liquidation or dissolution and (ii) terminate effective
upon such liquidation or dissolution, except to the extent exercised before such effective date.
The Board may specify the effect of a liquidation or dissolution on any Restricted Stock Award or
other Award granted under the Plan at the time of the grant of such Award.

     (c) Reorganization and Change in Control Events.

          (1) Definitions.

	 	a)	 	A “Reorganization Event” shall mean:

	 	(i)	 	any merger or consolidation of
the Company with or into another entity as a result of which all
of the Common Stock of the Company is converted into or
exchanged for the right to receive cash, securities or other
property; or
	 
	 	(ii)	 	any exchange of all of the Common
Stock of the Company for cash, securities or other property
pursuant to a share exchange transaction.

	 	b)	 	A “Change in Control Event” shall mean:

	 	(i)	 	the acquisition by an individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange

-5-

 

	 	 	 	Act) (a “Person”) of beneficial
ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) 50% or more of
either (x) the then-outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the
Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A)
any acquisition directly from the Company or (B) any acquisition
by any corporation pursuant to a Business Combination (as
defined below) which complies with clauses (x) and (y) of
subsection (iii) of this definition; or
	 
	 	(ii)	 	such time as the Continuing
Directors (as defined below) do not constitute a majority of the
Board (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term “Continuing
Director” means at any date a member of the Board (x) who was a
member of the Board on the date of the initial adoption of this
Plan by the Board or (y) who was nominated or elected subsequent
to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election
or whose election to the Board was recommended or endorsed by at
least a majority of the directors who were Continuing Directors
at the time of such nomination or election; provided,
however, that there shall be excluded from this clause
(y) any individual whose initial assumption of office occurred
as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents, by or on
behalf of a person other than the Board; or
	 
	 	(iii)	 	the consummation of a merger,
consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of
all or substantially all of the assets of the Company (a
“Business
Combination”), unless, immediately following such Business
Combination, each of the following two conditions is
satisfied: (x) all or substantially all of the individuals
and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding

-6-

 

	 	 	 	Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and
the combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in
such Business Combination (which shall include, without
limitation, a corporation which as a result of such
transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is
referred to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding the
Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by
the Acquiring Corporation) beneficially owns, directly or
indirectly, 50% or more of the then-outstanding shares of
common stock of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such
corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed
prior to the Business Combination).

	 	(c)	 	“Good Reason” shall mean a significant
diminution in the Participant’s title, authority, or responsibilities
from and after such Reorganization Event or Change in Control Event, as
the case may be, or a reduction in the annual cash compensation payable
to the Participant from and after such Reorganization Event or Change
in Control Event, as the case may be, or the relocation of the place of
business at which the Participant is principally located to a location
that is greater than 50 miles from the current site.
	 
	 	(d)	 	“Cause”, as determined by the Board, shall mean
any (i) willful failure by the Participant, which failure is not cured
within 30 days of written notice to the Participant from the Company,
to perform his or her material responsibilities to the Company or (ii)
willful
misconduct by the Participant which affects the business reputation
of the Company.

-7-

 

          (2) Effect on Options

	 	(a)	 	Reorganization Event. Upon the
occurrence of a Reorganization Event (regardless of whether such event
also constitutes a Change in Control Event), or the execution by the
Company of any agreement with respect to a Reorganization Event
(regardless of whether such event will result in a Change in Control
Event), the Board shall provide that all outstanding Options shall be
assumed, or equivalent options shall be substituted, by the acquiring
or succeeding corporation (or an affiliate thereof); provided
that if such Reorganization Event also constitutes a Change in Control
Event, except to the extent specifically provided to the contrary in
the instrument evidencing any Option or any other agreement between a
Participant and the Company, such assumed or substituted options shall
become immediately exercisable in full if, on or prior to the
twelve-month anniversary of the date of the consummation of the
Reorganization Event, the Participant’s employment with the Company or
the acquiring or succeeding corporation is terminated for Good Reason
by the Participant or is terminated without Cause by the Company or the
acquiring or succeeding corporation. For purposes hereof, an Option
shall be considered to be assumed if, following consummation of the
Reorganization Event, the Option confers the right to purchase, for
each share of Common Stock subject to the Option immediately prior to
the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of
the Reorganization Event by holders of Common Stock for each share of
Common Stock held immediately prior to the consummation of the
Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however,
that if the consideration received as a result of the Reorganization
Event is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist
solely of common stock of the acquiring or succeeding corporation (or
an affiliate thereof) equivalent in fair market value to the per share
consideration received by holders of outstanding shares of Common
Stock as a result of the Reorganization Event.

     Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or
substitute for, such Options, then the Board shall, upon written
notice to the Participants, provide that all then unexercised

-8-

 

Options
will become exercisable in full as of a specified time prior to the
Reorganization Event and will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent
exercised by the Participants before the consummation of such
Reorganization Event; provided, however, in the event of a
Reorganization Event under the terms of which holders of Common Stock
will receive upon consummation thereof a cash payment for each share
of Common Stock surrendered pursuant to such Reorganization Event
(the “Acquisition Price”), then the Board may instead provide that
all outstanding Options shall terminate upon consummation of such
Reorganization Event and that each Participant shall receive, in
exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of
Common Stock subject to such outstanding Options (whether or not then
exercisable), exceeds (B) the aggregate exercise price of such
Options.

	 	(b)	 	Change in Control Event that is not a
Reorganization Event. Upon the occurrence of a Change in Control
Event that does not also constitute a Reorganization Event, except to
the extent specifically provided to the contrary in the instrument
evidencing any Option or any other agreement between a Participant and
the Company, each then-outstanding Option shall continue to become
vested in accordance with the original vesting schedule set forth in
such Option; provided, however, that each such Option shall become
immediately exercisable in full if, on or prior to the twelve-month
anniversary of the date of the consummation of the Change in Control
Event, the Participant’s employment with the Company or the acquiring
or succeeding corporation is terminated for Good Reason by the
Participant or is terminated without Cause by the Company or the
acquiring or succeeding corporation.

          (3) Effect on Restricted Stock Awards

	 	(a)	 	Reorganization Event that is not a Change
in Control Event. Upon the occurrence of a Reorganization Event
that is not a Change in Control Event, the repurchase and other rights
of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall apply to the
cash,
securities or other property which the Common Stock was converted
into or exchanged for pursuant to such Reorganization Event in the
same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Stock Award.
	 
	 	(b)	 	Change in Control Event. Upon the
occurrence of a Change in Control Event (regardless of whether such
event also constitutes a

-9-

 

	 	 	 	Reorganization Event), except to the extent
specifically provided to the contrary in the instrument evidencing any
Restricted Stock Award or any other agreement between a Participant and
the Company, each then-outstanding Restricted Stock Award shall
continue to become free from conditions or restrictions in accordance
with the original schedule set forth in such Restricted Stock Award;
provided however, that each such Restricted Stock Award shall
immediately become free from all conditions or restrictions if, on or
prior to the twelve-month anniversary of the date of the consummation
of the Change in Control Event, the Participant’s employment with the
Company or the acquiring or succeeding corporation is terminated for
Good Reason by the Participant or is terminated without Cause by the
Company or the acquiring or succeeding corporation.

          (4) Effect on Other Awards

	 	(a)	 	Reorganization Event that is not a Change
in Control Event. The Board shall specify the effect of a
Reorganization Event that is not a Change in Control Event on any other
Award granted under the Plan at the time of the grant of such Award.
	 
	 	(b)	 	Change in Control Event. Upon the
occurrence of a Change in Control Event (regardless of whether such
event also constitutes a Reorganization Event), except to the extent
specifically provided to the contrary in the instrument evidencing any
other Award or any other agreement between a Participant and the
Company, each such then-outstanding Award shall continue to become
exercisable, realizable, vested or free from conditions or restrictions
in accordance with the original schedule set forth in such Award;
provided, however, that each such Award shall immediately become fully
exercisable, realizable, vested or free from conditions or restrictions
if, on or prior to the twelve-month anniversary of the date of the
consummation of the Change in Control Event, the Participant’s
employment with the Company or the acquiring or succeeding corporation
is terminated for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or succeeding
corporation.

9. General Provisions Applicable to Awards

     (a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the

-10-

 

Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     (b) Documentation. Each Award shall be evidenced by a written agreement in such form
and with such terms as the Board shall determine (the “Award Agreement”). Each Award may contain
terms and conditions in addition to but not inconsistent with those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made
alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.

     (d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

     (e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. Except as the Board may otherwise provide in an Award, for so
long as the Common Stock is registered under the Exchange Act, Participants may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including shares retained
from the Award creating the tax obligation, valued at their Fair Market Value; provided, however,
except as otherwise provided by the Board, that the total tax withholding where stock is being used
to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy tax withholding requirements cannot be subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.

     (f) Amendment of Award. The Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock

-11-

 

market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

     (h) Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.

     (i) Restrictions on Transfer of Shares. Any shares of Common Stock issued pursuant to
an Award shall be subject to such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may determine. Such
restrictions shall be set forth in the applicable Award Agreement and shall apply in addition to
any restrictions that may apply to holders of shares of Common Stock generally.

10. Miscellaneous

     (a) No Right To Employment or Other Status. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving a Participant the
right to continued employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.

     (c) Effective Date and Term of Plan. The Plan originally became effective on the date
on which it was first adopted by the Board. The effective date of the Plan as Amended and Restated
is October 31, 2008. No Awards shall be granted under the Plan after the completion of 10 years
from the earlier of (i) the date on which the Plan was originally adopted by the Board or
(ii) the date the Plan was approved by the Company’s stockholders, but Awards previously
granted may extend beyond that date.

     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time.

-12-

 

     (e) Authorization of Sub-Plans. The Board may from time to time establish one or more
sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of
various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this
Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems
necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with
the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall
be deemed to be part of the Plan, but each supplement shall apply only to Participants within the
affected jurisdiction and the Company shall not be required to provide copies of any supplement to
Participants in any jurisdiction which is not the subject of such supplement.

     (f) Compliance with Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code.

     (g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of
a jurisdiction other than such state.

-13-

 

CORNERSTONE BIOPHARMA HOLDINGS, INC.

2005 STOCK INCENTIVE PLAN

(as Amended and Restated Effective October 31, 2008)

CALIFORNIA SUPPLEMENT

     Pursuant to Section 10(e) of the Plan, the Board has adopted this supplement for purposes of
satisfying the requirements of Section 25102(o) of the California Law:

     Any Awards granted under the Plan to a Participant who is a resident of the State of
California on the date of grant (a “California Participant”) shall be subject to the following
additional limitations, terms and conditions:

1. Additional Limitations on Options.

     (a) Minimum Vesting Rate. Except in the case of Options granted to California
Participants who are officers, directors, managers, consultants or advisors of the Company or its
affiliates (which Options may become exercisable at whatever rate is determined by the Board),
Options granted to California Participants shall become exercisable at a rate of no less than 20%
per year over five years from the date of grant; provided, that, such Options may
be subject to such reasonable forfeiture conditions as the Board may choose to impose and which are
not inconsistent with Section 260.140.41 of the California Regulations.

     (b) Minimum Exercise Price. The exercise price of Options granted to California
Participants may not be less than 85% of the Fair Market Value of the Common Stock on the date of
grant in the case of a Nonstatutory Stock Option or less than 100% of the Fair Market Value of the
Common Stock on the date of grant in the case of an Incentive Stock Option; provided,
however, that if the California Participant is a person who owns stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations, the exercise price shall be not less than 110% of the Fair Market Value of
the Common Stock on the date of grant.

     (c) Maximum Duration of Options. No Options granted to California Participants will be
granted for a term in excess of 10 years.

     (d) Minimum Exercise Period Following Termination. Unless a California Participant’s
employment is terminated for cause (as defined in any contract of employment between the Company
and such Participant, or if none, in the instrument evidencing the grant of such Participant’s
Option), in the event of termination of employment of such Participant, he or she shall have the
right to exercise an Option, to the extent that he or she was otherwise entitled to exercise such
Option on the date employment terminated, as follows: (i) at least six months from the date of
termination, if termination was caused by such Participant’s death or “permanent and total
disability” (within the meaning of Section 22(e)(3) of the Code) and (ii) at least 30 days from the
date of termination, if termination was caused other than by such
Participant’s death or “permanent and total disability” (within the meaning of Section
22(e)(3) of the Code).

A-1

 

     (e) Limitation on Repurchase Rights. If an Option granted to a California Participant
gives the Company the right to repurchase shares of Common Stock issued pursuant to the Plan upon
termination of employment of such Participant, the terms of such repurchase right must comply with
Section 260.140.4 l(k) of the California Regulations.

2. Additional Limitations for Restricted Stock Awards.

     (a) Minimum Purchase Price. The purchase price for a Restricted Stock Award granted to
a California Participant shall be not less than 85% of the Fair Market Value of the Common Stock at
the time such Participant is granted the right to purchase shares under the Plan or at the time the
purchase is consummated; provided, however, that if such Participant is a person
who owns stock possessing more than 10% of the total combined voting power or value of all classes
of stock of the Company or its parent or subsidiary corporations, the purchase price shall be not
less than 100% of the Fair Market Value of the Common Stock at the time such Participant is granted
the right to purchase shares under the Plan or at the time the purchase is consummated.

     (b) Limitation of Repurchase Rights. If a Restricted Stock Award granted to a
California Participant gives the Company the right to repurchase shares of Common Stock issued
pursuant to the Plan upon termination of employment of such Participant, the terms of such
repurchase right must comply with Section 260.140.42(h) of the California Regulations.

3. Additional Limitations for Other Stock-Based Awards. The terms of all Awards granted to
a California Participant under Section 7 of the Plan shall comply, to the extent applicable, with
Section 260.140.41 or Section 260.140.42 of the California Regulations.

4. Additional Requirement to Provide Information to California Participants. The Company
shall provide to each California Participant and to each California Participant who acquires Common
Stock pursuant to the Plan, not less frequently than annually, copies of annual financial
statements (which need not be audited). The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure their access to
equivalent information.

5. Additional Limitations on Timing of Awards. No Award granted to a California Participant
shall become exercisable, vested or realizable, as applicable to such Award, unless the Plan has
been approved by a majority of the Company’s stockholders within 12 months before or after the date
the Plan was adopted by the Board.

6. Additional Limitations Relating to Definition of Fair Market Value. For purposes of
Section 1(b) and 2(a) of this supplement, “Fair Market Value” shall be determined in a manner not
inconsistent with Section 260.140.50 of the California Regulations.

7. Additional Restriction Regarding Recapitalizations, Stock Splits, Etc. For
purposes of Section 8 of the Plan, in the event of a stock split, reverse stock split,
stock dividend,
recapitalization, combination, reclassification or other distribution of the Company’s
securities, the number of securities allocated to each California Participant must be
adjusted proportionately and without the receipt by the Company of any consideration
from any California Participant.

A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]