Document:

exv10w28

Exhibit 10.28

CORNERSTONE BIOPHARMA, INC.

Executive Retention Agreement

     THIS EXECUTIVE RETENTION AGREEMENT by and between Cornerstone BioPharma, Inc., a Delaware
corporation (the “Company”), and Craig A. Collard (the “Executive”) is made as of February 8, 2006
(the “Effective Date”).

     WHEREAS, the Company recognizes that the possibility of a change in control of the Company
exists and that such possibility, and the uncertainty and questions which it may raise among key
personnel, may result in the departure or distraction of key personnel to the detriment of the
Company and its stockholders, and

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate
steps should be taken to reinforce and encourage the continued employment and dedication of the
Company’s key personnel without distraction from the possibility of a change in control of the
Company and related events and circumstances.

     NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its
employ, the Company agrees that the Executive shall receive the severance benefits set forth in
this Agreement in the event the Executive’s employment with the Company is terminated under the
circumstances described below subsequent to a Change in Control (as defined in Section 1.1).

     1. Key Definitions.

     As used herein, the following terms shall have the following respective meanings:

          1.1 “Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) and (b) below:

               (a) an acquisition of ownership of stock of the Company by any one person, or more than one
person acting as a group (as defined in 26 CFR 409A(g)(5)(v)(B), a “Group”) that, together with
stock previously held by such person or Group, constitutes more than fifty (50%) of the total fair
market value or total voting power of the stock of the Company as defined and set forth in 26 CFR
409A(g)(5)(v)(A); provided however, that for purposes of this subsection (a) the following
acquisitions shall not constitute a Change in Control: (i) any acquisition of ownership of stock of
the Company for the primary purpose of a debt or equity financing of the Company; or (ii) the
acquisition of any stock of the Company by any person that is a stockholder of the Company on the
date of this Agreement; or (iii) any acquisition in which the Company becomes a subsidiary of
another corporation and in which the stockholders of the Company immediately prior to the
transaction will own, immediately after the transaction, shares entitling such stockholders to more
than 50% of all votes to which all stockholders of the parent corporation would be entitled in the
election of directors (without consideration of the rights of any class of stock to elect directors
by a separate class vote).

               (b) an acquisition by any one person or more than one person acting as a Group of assets of
the Company that have a total gross fair market value equal to or more than

 

 

90 percent of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition, as defined and set forth in 26 CFR 409A(g)(5)(vii)(A);
provided however that for purposes of this subsection (b) the following shall not constitute a
Change in Control: any acquisition of any assets of the Company by any person or Group that is a
stockholder of the Company on the date of this Agreement.

          1.1 “Change in Control Date” means the first date during the Term (as defined in
Section 2) on which a Change in Control occurs. Anything in this Agreement to the contrary
notwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with the Company
is terminated prior to the date on which the Change in Control occurs, and (c) it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with or in anticipation of a Change in Control, then for all purposes of this
Agreement the “Change in Control Date” shall mean the date immediately prior to the date of such
termination of employment.

          1.2 “Cause” means:

               (a) Any material breach of the terms of Executive’s employment with the Company or the
material failure of the Executive to diligently and properly perform the Executive’s duties for the
Company, which breach or failure continues ten (10) days or more after the Executive has been given
notice of such breach or failure by the Company;

               (b) The Executive’s misappropriation or unauthorized use of the Company’s tangible or
intangible property in a manner materially detrimental to the Company, or breach of the Proprietary
Information, Inventions, Noncompetition and Nonsolicitation Agreement between the Executive and the
Company in a manner materially detrimental to the Company, which misappropriation, use or breach
continues ten (10) days or more after the Executive has been given notice of such misappropriation,
use or breach, provided that if such misappropriation, use or breach has already resulted in the
loss of material property or right or has already been materially detrimental to the Company in a
manner not susceptible to cure, such ten-day notice and cure period shall not apply;

               (c) Any material failure to comply with the Company’s policies and/or directives of the Board
in a manner materially detrimental to the Company, which failure to comply continues ten (10) days
or more after the Executive has been given notice of such failure to comply;

               (d) The Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of
alcohol in any manner that materially interferes with the performance of the Executive’s duties;

               (e) Any dishonest or illegal action (including, without limitation, embezzlement) which is
materially detrimental to the interest and well-being of the Company, including, without
limitation, harm to its reputation, which action continues ten (10) days or more after the
Executive has been given notice of such action, provided that if such action has already resulted
in the loss of material property or right or has already been materially

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detrimental in a manner not susceptible to cure, such ten-day notice and cure period shall not
apply;

               (f) The Executive’s failure to fully disclose any material conflict of interest the Executive
may have with the Company in a transaction between the Company and any third party which is
materially detrimental to the interest and well-being of the Company;

               (g) Any adverse action or omission by the Executive which would be required to be disclosed
pursuant to public securities laws or which would limit the ability of the Company or any entity
affiliated with the Company to sell securities under any Federal or state law or which would
disqualify the Company or any affiliated entity from any exemption otherwise available to it; or

               (h) The Executive’s violation of the Company’s policies prohibiting harassment, unlawful
discrimination, retaliation or workplace violence.

          1.3 “Covered Termination” shall mean, within the period of 24 months immediately
following a Change of Control, the Executive’s employment (i) is terminated by the Company without
Cause (other than on account of death or Disability), or (ii) terminates his employment with the
Company for Good Reason. The Executive’s employment shall not be deemed to have terminated for
purposes of this Agreement merely because he ceases to be employed by the Company and becomes
employed by a successor entity in connection with the Change of Control, if the new employer
expressly agrees to be bound by this Agreement as a successor to the company. Similarly, no Covered
Termination shall be deemed to have occurred if, upon the occurrence of a Change of Control, the
Executive ceases to be employed by the Company and does not accept an offer of employment made by
the successor entity in connection with the Change of Control on terms and conditions which, if
imposed by the Company, would not give the Executive a basis on which to terminate employment for
Good Reason.

          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of
any of the events or circumstances set forth in clauses (a) through (f) below. Notwithstanding the
occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute
Good Reason if, prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Executive in respect thereof, such event or circumstance
has been fully corrected.

               (a) the assignment to the Executive of duties inconsistent in any material respect with the
Executive’s position (including status, offices, titles and reporting requirements), authority or
responsibilities in effect immediately prior to the earliest to occur of (i) the Change in Control
Date, (ii) the date of the execution by the Company of the initial written agreement or instrument
providing for the Change in Control or (iii) the date of the adoption by the Board of Directors of
a resolution providing for the Change in Control (with the earliest to occur of such dates referred
to herein as the “Measurement Date”), or any other action or omission by the Company which results
in a material diminution in such position, authority or responsibilities;

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               (b) a reduction in the Executive’s annual base salary as in effect on the Measurement Date or
as the same was or may be increased thereafter from time to time;

               (c) the failure by the Company to (i) continue in effect any material compensation or benefit
plan or program (including without limitation any life insurance, medical, health and accident or
disability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in which the
Executive participates or which is applicable to the Executive immediately prior to the Measurement
Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has
been made with respect to such plan or program, (ii) continue the Executive’s participation therein
(or in such substitute or alternative plan) on a basis not materially less favorable, both in terms
of the amount of benefits provided and the level of the Executive’s participation relative to other
participants, than the basis existing immediately prior to the Measurement Date or (iii) award cash
bonuses to the Executive in amounts and in a manner substantially consistent with past practice in
light of the Company’s financial performance;

               (d) a change by the Company in the location at which the Executive performs his principal
duties for the Company to a new location that is more than 50 miles from the location at which the
Executive performed his principal duties for the Company immediately prior to the Measurement Date;
or a requirement by the Company that the Executive travel on Company business to a substantially
greater extent than required immediately prior to the Measurement Date;

               (e) the failure of the Company to obtain the agreement from any successor to the Company to
assume and agree to perform this Agreement, as required by Section 6.1; or

               (f) any failure of the Company to pay or provide to the Executive any portion of the
Executive’s compensation or benefits due under any Benefit Plan within ten (10) days of the date
such compensation or benefits are due, or any material breach by the Company of this Agreement or
any employment agreement with the Executive.

     The Executive’s right to terminate his employment for Good Reason shall not be affected by his
incapacity due to physical or mental illness.

          1.5 “Disability” means the Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal
representative.

     2. Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of
(a) the termination of the Executive’s employment with the Company prior to the Change in Control
Date, (b) the date twenty-four (24) months after the Change in Control Date, if the Executive is
still employed by the Company or any successor as of such later date, or (c) the fulfillment by the
Company of all of its obligations under Section 4 if the Executive’s employment with the

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Company terminates within twenty-four (24) months following the Change in Control Date. “Term”
shall mean the period of time beginning on the Effective Date and ending on the first to occur of
the above events or conditions.

     3. Employment Status; Termination Following Change in Control.

          3.1 Not an Employment Contract. The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the Executive or the Company from
terminating employment at any time. If the Executive’s employment with the Company terminates for
any reason and subsequently a Change in Control shall occur, the Executive shall not be entitled to
any benefits hereunder except as otherwise provided pursuant to Section 1.2.

          3.2 Termination of Employment.

               (a) If the Change in Control Date occurs during the Term, any termination of the Executive’s
employment by the Company or by the Executive within twenty-four (24) months following the Change
in Control Date (other than due to the death of the Executive) shall be communicated by a written
notice to the other party hereto (the “Notice of Termination”), given in accordance with Section 7.
Any Notice of Termination shall: (i) indicate the specific termination provision (if any) of this
Agreement relied upon by the party giving such notice, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) specify the Date of Termination
(as defined below). The effective date of an employment termination (the “Date of Termination”)
shall be the close of business on the date specified in the Notice of Termination (which date may
not be less than 5 days or more than 120 days after the date of delivery of such Notice of
Termination), in the case of a termination other than one due to the Executive’s death, or the date
of the Executive’s death, as the case may be.

               (b) The failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.

               (c) Any Notice of Termination for Cause given by the Company must be given within 90 days of
the occurrence of the event(s) or circumstance(s) which constitute(s) Cause. Any Notice of
Termination for Good Reason given by the Executive must be given within 90 days of the occurrence
of the event(s) or circumstance(s) which constitute(s) Good Reason.

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     4. Benefits to Executive. Upon the occurrence of a Covered Termination, Executive
shall be entitled to the following:

          4.1 Stock Acceleration.

               (a) effective upon the date of a Covered Termination, each outstanding option to purchase
shares of Common Stock of the Company held by the Executive shall become immediately exercisable in
full; and

               (b) effective upon the date of a Covered Termination, each outstanding restricted stock award
shall be deemed to be fully vested and will no longer be subject to a right of repurchase by the
Company.

          4.2 Compensation.

               (a) Termination Without Cause or for Good Reason.

                    (i) the Company shall pay to the Executive in a lump sum in cash on the next regularly
scheduled payroll date after the Date of Termination the aggregate of the following amounts:

                         (1) the sum of (A) the Executive’s base salary through the Date of Termination, (B) the
product of (x) the annual bonus paid or payable for the most recently completed fiscal year and (y)
a fraction, the numerator of which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (C) payment for any accrued but unused
vacation days, in each case to the extent not previously paid (the sum of the amounts described in
clauses (A), (B), and (C) shall be hereinafter referred to as the “Accrued Obligations”); and

                         (2) the amount equal to (A) two multiplied by (B) the sum of (x) the Executive’s highest
annual base salary during the three-year period prior to the Change in Control Date and (y) the
Executive’s highest annual bonus during the three-year period prior to the Change in Control Date.

                    (ii) The Executive shall be entitled to receive all Company benefits to which the Executive
was entitled as of the date of termination, subject to the terms of all applicable benefit plans
and to the extent such benefits can be provided to a non-employee (or to the extent such benefits
cannot be provided to non-employees, then the Company shall pay to Executive on the first business
day of each month during the applicable period the amount that the Company was paying the
applicable third party for such benefits immediately prior to the termination of Executive’s
employment with the Company), at the same average level and on the same terms and conditions which
applied immediately prior to the date of the Executive’s termination, for the shorter of: (i)
twenty four months following the date of such termination or (ii) until the Executive obtains
reasonably comparable coverage from another employer;

                    (iii) to the extent not previously paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive following the Executive’s termination of

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employment under any plan, program, policy, practice, contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the
“Other Benefits”); and

                    (iv) notwithstanding the foregoing, if and to the extent required in order to avoid the
imposition on Executive of any excise tax under Section 409A (“Code Section 409 A”) of the Internal
Revenue Code of 1986, as amended (the “Code”), the payment of any severance or other payments under
this Section 4 shall not commence until, and shall be made on, the first business day after the
date that is six (6) months following the date of Executive’s termination of employment, and in
such event the initial payment shall include a catch-up amount covering amounts that would
otherwise have been paid during the six-month period following Executive’s termination date.

               (b) Resignation without Good Reason; Termination for Death or Disability. If the
Executive voluntarily terminates his employment with the Company, excluding a termination for Good
Reason, or if the Executive’s employment with the Company is terminated by reason of the
Executive’s death or Disability, then the Company shall (i) pay the Executive (or his estate, if
applicable), in a lump sum in cash on the next regularly scheduled payroll date after the Date of
Termination, the Accrued Obligations and (ii) timely pay or provide to the Executive the Other
Benefits.

               (c) Termination for Cause. If the Company terminates the Executive’s employment with
the Company for Cause, then the Company shall (i) pay the Executive, in a lump sum in cash on the
next regularly scheduled payroll date after the Date of Termination, the Executive’s annual base
salary through the Date of Termination, and (ii) timely pay or provide to the Executive the Other
Benefits.

          4.3 Taxes.

               (a) If any amount payable to or other benefit receivable by the Executive in connection with a
Change in Control (whether pursuant to this Agreement or otherwise) is deemed to constitute an
“excess parachute payment” as defined in Section 280G(b)(l) of the Code, and would result in the
imposition on the Executive of an excise tax under the Code, then the amount payable hereunder
shall be reduced by the smallest amount required to avoid the imposition of such excise tax. The
amount of any adjustment under this Section 4.3 shall be computed by a certified public accountant
selected and paid for by the Company (in its sole discretion).

          4.4 Mitigation. The Executive shall not be required to mitigate the amount of any
payment or benefits provided for in this Section 4 by seeking other employment or otherwise.
Further, except as provided in Section 4.2(a)(ii), the amount of any payment or benefits provided
for in this Section 4 shall not be reduced by any compensation earned by the Executive as a result
of employment by another employer.

     5. Disputes.

          5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board of Directors of

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the Company and shall be in writing. Any denial by the Board of Directors of a claim for
benefits under this Agreement shall be delivered to the Executive in writing and shall set forth
the specific reasons for the denial and the specific provisions of this Agreement relied upon. The
Board of Directors shall afford a reasonable opportunity to the Executive for a review of the
decision denying a claim. Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Raleigh, North Carolina, in
accordance with the rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.

     6. Successors.

          6.1 Successor to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and agree to perform this Agreement to the
same extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness
of any succession shall be a breach of this Agreement and shall constitute Good Reason if the
Executive elects to terminate employment, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, “Company” shall mean the Company as defined above and any successor to its
business or assets as aforesaid which assumes and agrees to perform this Agreement, by operation of
law or otherwise.

          6.2 Successor to Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should die while any
amount would still be payable to the Executive or his family hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the executors, personal representatives or administrators of
the Executive’s estate.

     7. Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or communication shall be
sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case addressed to the Company
at 2000 Regency Parkway, Cary, North Carolina 27511, and to the Executive at the Executive’s
address indicated on the signature page of this Agreement (or to such other address as either the
Company or the Executive may have furnished to the other in writing in accordance herewith). Any
such notice, instruction or communication shall be deemed to have been delivered five business days
after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent via a reputable nationwide overnight courier service. Either party
may give any notice, instruction or other communication hereunder using any other means, but no
such notice, instruction or other communication shall be deemed to have been duly delivered unless
and until it actually is received by the party for whom it is intended.

     8. Miscellaneous.

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          8.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’s
employment with the Company shall not be deemed to have terminated solely as a result of the
Executive continuing to be employed by a wholly-owned subsidiary of the Company.

          8.2 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

          8.3 Injunctive Relief. The Company and the Executive agree that any breach of this
Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies which may be
available, the Executive shall have the right to specific performance and injunctive relief.

          8.4 Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the State of North Carolina, without regard to
conflicts of law principles.

          8.5 Waivers. No waiver by the Executive at any time of any breach of, or compliance
with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of
that or any other provision at any subsequent time.

          8.6 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but both of which together shall constitute one and the same
instrument.

          8.7 Tax Withholding. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.

          8.8 Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in respect of the subject
matter contained herein; and any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled.

          8.9 Amendments. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.

          8.10 Executive’s Acknowledgements. The Executive acknowledges that he: (a) has read
this Agreement; (b) has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek such
counsel; (c) understands the terms and consequences of this Agreement; and (d) understands that the
law firm of Hutchison+Mason PLLC is acting as counsel to the Company in connection with the
transactions contemplated by this Agreement, and is not acting as counsel for the Executive.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first set forth above.

	 	 	 	 	 	 	 
	 	 	CORNERSTONE BIOPHARMA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Chenyqua Baldwin	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	Chenyqua Baldwin	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:
	 	VP – Finance	 	 
	 

	 	 	 	 

	 	 
	 	 	/s/ Craig A. Collard	 	 
	 	 	 	 	 
	 	 	Craig A. Collard	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	107 Trellingwood Drive	 	 
	 	 	Morrisville, NC 27560	 	 

10exv10w29

Exhibit 10.29

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”), is effective as of 03/01/2006 (the “Effective
Date”) by and between Cornerstone BioPharma, Inc., a Delaware corporation (the “Company”), and
Chenyqua Baldwin (the “Executive”), an individual residing in North Carolina.

WITNESSETH:

     WHEREAS, the Company wishes to employ the Executive, and the Executive desires to accept
employment with the Company, upon the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein, and of other
good and valuable consideration, including the employment of the Executive by the Company and the
compensation to be received by the Executive from the Company from time to time, and specifically
the compensation to be received by the Executive pursuant to Section 4 hereof, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound,
hereby agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts employment as Vice President — Finance of the Company upon the terms and conditions of
this Agreement.

     2. Duties. The Executive shall faithfully perform all duties of the Company related
to the position or positions held by the Executive, including but not limited to all duties set
forth in this Agreement and/or in the Bylaws of the Company related to the position or positions
held by the Executive and all additional duties that are prescribed from time to time by the Board
of Directors of the Company (the “Board”) or other designated officers of the Company. The
Executive shall devote the Executive’s full time and attention to the performance of the
Executive’s duties and responsibilities on behalf of the Company and in furtherance of its best
interests; provided, however, that the Executive, subject to the Executive’s obligations hereunder,
shall also be permitted to make personal investments, perform reasonable volunteer services and,
with the prior consent of the Company, serve on outside boards of directors for non-profit
corporations. The Executive shall comply with all Company policies, standards, rules and
regulations (the “Company Policies”) and all applicable government laws, rules and regulations that
are now or hereafter in effect. The Executive acknowledges receipt of copies of all written Company
Policies that are in effect as of the date of this Agreement.

     3. Term. Unless earlier terminated as provided herein, the initial term of this
Agreement shall commence on the Effective Date and shall continue until 12/31/2006. Thereafter,
this Agreement shall automatically renew on a year-to-year basis on the same terms and conditions
set forth herein unless: (a) earlier terminated or amended as provided herein or (b) either party
gives written notice of non-renewal at least sixty (60) days prior to the end of the initial term
or any renewal term of this Agreement. The initial term of this Agreement and all renewals thereof
are referred to herein as the “Term.”

 

 

     4. Compensation. During the Term, as compensation for the services rendered by the
Executive under this Agreement, the Executive shall have previously received or be entitled to
receive the following (all payments are subject to applicable withholdings):

          (a) Base Salary. The Executive shall receive a monthly salary of $13,433.33 (equal to
an annual salary of $161,200.00) payable in accordance with the then-current standard payroll
policies of the Company or as otherwise agreed to by the parties. The Executive’s salary may be
increased from time to time by the Board.

          (b) Bonuses. The Executive shall be eligible to participate in all bonus or profit
sharing plans adopted by the Board. The amount awarded to the Executive under any profit sharing
or bonus plan shall be in the discretion of the Board or any committee administering such plan,
based on its assessment of the Executive’s and the Company’s performance during the relevant
period, but it is the expectation of the Company that any such bonus would be in the range of 0% to
35% of the Executive’s annual base salary.

          (c) Options. On 7/1/2005, the Executive was granted an option to purchase up to
40,000 shares of the Common Stock of Cornerstone BioPharma Holdings, Inc., a Delaware corporation
and parent corporation of the Company (“Parent”), at an exercise price of $.25 per share. The
terms and conditions of such option, including vesting, are governed by a[n] [Nonstatutory]
[Incentive] Stock Option Agreement issued by the Company to the Executive under Parent’s Stock
[Option] [Incentive] Plan.

          (d) Restricted Stock. On 05/12/2005, the Executive purchased 750,000 shares of the
Common Stock of Parent for $.0001 per share. The terms and conditions for such purchase were set
forth in a Stock Purchase Agreement entered into between Parent and the Executive.

          (e) Benefits. The Executive shall be entitled to receive those benefits provided from
time to time to other executive employees of the Company, in accordance with the terms and
conditions of the applicable plan documents; provided that, the Executive meets the eligibility
requirements thereof. All such benefits are subject to amendment or termination from time to time
by the Company without the consent of the Executive or any other employee of the Company.

          (f) Vacation. The Executive shall be entitled to four (4) weeks paid vacation per
calendar year (with the vacation for any partial year being prorated) to be taken at such times as
may be approved by his/her supervisor. A maximum of five (5) vacation days earned in one calendar
year may be used in the next subsequent calendar year. Upon the termination of the Executive’s
employment with the Company, cash shall be paid in lieu of accrued but unused vacation.

          (g) Business Expenses. The Company shall pay, or reimburse the Executive for, all
reasonable expenses incurred by the Executive directly related to conduct of the business of the
Company; provided that, the Executive complies with the Company’s policies for the reimbursement or
advancement of business expenses that are now or hereafter in effect.

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     5. Termination. This Agreement and the Executive’s employment by the Company shall
or may be terminated, as the case may be, as follows:

          (a) Termination upon Expiration of the Term. This Agreement and the Executive’s
employment by the Company shall terminate upon the expiration of the Term.

          (b) Termination by the Executive. The Executive may terminate this Agreement and his
employment by the Company thirty (30) days after notice to the Company.

          (c) Termination by the Company. The Company may terminate this Agreement and the
Executive’s employment by the Company upon notice to the Executive (or his personal
representative):

               (i) at any time and for any reason;

               (ii) upon the death of the Executive, in which case this Agreement shall terminate
immediately; provided that, such termination shall not prejudice any benefits payable to the
Executive’s spouse or beneficiaries which are fully vested as of the date of death;

               (iii) if the Executive is permanently disabled (as defined herein), in which case this
Agreement shall terminate immediately; provided that, such termination shall not prejudice any
benefits payable to the Executive, the Executive’s spouse or beneficiaries which are fully vested
as of the date of the termination of this Agreement. For purposes of this Agreement, the Executive
shall be considered permanently disabled when a qualified medical doctor mutually acceptable to the
Company and the Executive or the Executive’s personal representative shall have certified in
writing that: (a) the Executive is unable, because of a medically determinable physical or mental
disability, to perform substantially all of the Executive’s duties, with or without a reasonable
accommodation, for more than one hundred and eighty (180) calendar days measured from the last full
day of work; or (b) by reason of mental or physical disability, it is unlikely that the Executive
will be able, within one hundred and eighty (180) calendar days, to resume substantially all
business duties and responsibilities in which the Executive was previously engaged and otherwise
discharge the Executive’s duties under this Agreement;

               (iv) upon the liquidation, dissolution or discontinuance of business by the Company in any
manner or the filing of any petition by or against the Company under any federal or state
bankruptcy or insolvency laws, which petition shall not be dismissed within sixty (60) days after
filing; provided that, such termination shall not prejudice the Executive’s rights as a stockholder
or a creditor of the Company; or

               (v) “for cause” (as defined herein). “For cause” shall be determined by the Board by a
majority vote without the participation of the Executive in such vote and shall mean:

                    (1) Any material breach of the terms of this Agreement by the Executive, or the failure of
the Executive to diligently and properly perform the Executive’s duties for the Company or the
Executive’s failure to achieve the objectives specified by the Board;

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                    (2) The Executive’s misappropriation or unauthorized use of the Company’s tangible or
intangible property, or breach of the Proprietary Information Agreement (as defined herein);

                    (3) Any material failure to comply with the Company Policies or any other policies and/or
directives of the Board;

                    (4) The Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of
alcohol in any manner that materially interferes with the performance of the Executive’s duties
under this Agreement;

                    (5) Any dishonest or illegal action (including, without limitation, embezzlement) or any other
action whether or not dishonest or illegal by the Executive which is materially detrimental to the
interest and well-being of the Company, including, without limitation, harm to its reputation;

                    (6) The Executive’s failure to fully disclose any material conflict of interest the Executive
may have with the Company in a transaction between the Company and any third party which is
materially detrimental to the interest and well-being of the Company;

                    (7) Any adverse action or omission by the Executive which would be required to be disclosed
pursuant to public securities laws or which would limit the ability of the Company or any entity
affiliated with the Company to sell securities under any Federal or state law or which would
disqualify the Company or any affiliated entity from any exemption otherwise available to it; or

                    (8) The Executive’s violation of the Company’s Policies prohibiting harassment, unlawful
discrimination, retaliation or workplace violence.

          (d) Obligations of the Company Upon Termination.

               (i) Upon the termination of this Agreement: (A) pursuant to the expiration of the Term; (B) by
the Executive pursuant to paragraph 5(b); or (C) by the Company pursuant to paragraph 5(c)(ii),
(iii), (iv), or (v), the Company shall have no further obligations hereunder other than the payment
of all compensation and other benefits payable to the Executive through the date of such
termination.

               (ii) Upon termination of this Agreement: by the Company pursuant to paragraph 5(c)(i) and
provided the Executive executes and does not revoke a Release and Settlement Agreement in the form
acceptable to the Company: (1) the Company shall pay the Executive an amount equal to 3 months base
salary (less all applicable deductions) payable in a lump sum thirty (30) days after the
termination of Executive’s employment with the Company; (2) the Executive shall to be entitled to
receive all Company benefits to which the Executive was entitled as of the date of termination,
subject to the terms of all applicable benefit plans and to the extent such benefits can be
provided to a non-employee (or to the extent such benefits cannot be provided to non-employees,
then the Company shall pay to Executive on the first business day of each month during the
applicable period the amount that the Company was paying the

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applicable third party for such benefits immediately prior to the termination of Executive’s
employment with the Company), at the same average level and on the same terms and conditions which
applied immediately prior to the date of the Executive’s termination, for the shorter of: (i) 3
months following the date of such termination or (ii) until the Executive obtains reasonably
comparable coverage from another employer. Notwithstanding the foregoing, if and to the extent
required in order to avoid the imposition on Executive of any excise tax under Section 409A (“Code
Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”), the payment of any
severance or other payments under this Section 5 shall not commence until, and shall be made on,
the first business day after the date that is six (6) months following the date of Executive’s
termination of employment, and in such event the initial payment shall include a catch-up amount
covering amounts that would otherwise have been paid during the six-month period following
Executive’s termination date.

     6. Proprietary Information Agreement. The terms of the Proprietary Information,
Inventions, Non-Competition and Non-Solicitation Agreement by and between the Company and the
Executive, dated 03/01/2006 (the “Proprietary Information Agreement”), are hereby incorporated by
reference and are a material part of this Agreement.

     7. Representations and Warranties.

          (a) The Executive represents and warrants to the Company that the Executive’s performance of
this Agreement and as an employee of the Company does not and will not breach any noncompetition
agreement or any agreement to keep in confidence proprietary information acquired by the Executive
in confidence or in trust prior to the Executive’s employment by the Company. The Executive
represents and warrants to the Company that the Executive has not entered into, and agrees not to
enter into, any agreement that conflicts with or violates this Agreement.

          (b) The Executive represents and warrants to the Company that the Executive has not brought
and shall not bring with the Executive to the Company, or use in the performance of the Executive’s
responsibilities for the Company, any materials or documents of a former employer which are not
generally available to the public or which did not belong to the Executive prior to the Executive’s
employment with the Company, unless the Executive has obtained written authorization from the
former employer or other owner for their possession and use and provided the Company with a copy
thereof.

     8. Indemnification by the Executive. The Executive shall indemnify and hold harmless
the Company, its directors, officers, stockholders, agents, and employees against all claims,
costs, expenses, liabilities, and lost profits, including amounts paid in settlement, incurred by
any of them as a result of the breach by the Executive of any provision of this Agreement.

     9. Notices. All notices, requests, consents, approvals, and other communications to,
upon, and between the parties shall be in writing and shall be deemed to have been given,
delivered, made, and received when: (a) personally delivered; (b) deposited for next day delivery
by Federal Express, or other similar overnight courier services; (c) transmitted via telefacsimile
or other similar device to the attention of the Company President or Chief Executive Officer with

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receipt acknowledged; or (d) three (3) days after being sent or mailed by certified mail, postage
prepaid and return receipt requested, addressed to the Company at 2000 Regency Parkway, Cary, North
Carolina 27511, and to the Executive at 645 Emily Lane, Chapel Hill, NC 27516.

     10. Effect. This Agreement shall be binding on and inure to the respective benefit of
the Company and its successors and assigns and the Executive and his personal representatives.

     11. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the matters set forth herein and supercedes all prior agreements and
understandings between the parties with respect to the same. To the extent any conflict exists or
arises between this agreement and any other Company policy or procedure, this agreement shall take
precedence and govern.

     12. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision.

     13. Amendment and Waiver. No provision of this Agreement, including the provisions of
this Paragraph, may be amended, modified, deleted, or waived in any manner except by a written
agreement executed by the parties.

     14. No Assignment. Neither this Agreement nor any interest herein may be assigned by
either party without the consent of the other party.

     15. Construction. This Agreement shall be construed and enforced in accordance with
the laws of the State of North Carolina, other than its rules with respect to choice of law.

     16. Consent to Jurisdiction and Venue. Each of the parties agrees that any suit,
action, or proceeding arising out of this Agreement may be instituted against it in the District
Court of Wake County, North Carolina or in the United States District Court for the Eastern
District of North Carolina (assuming that such court has subject matter jurisdiction over such
suit, action or proceeding). Each of the parties hereby waives any objection that it may have to
the venue of any such suit, action, or proceeding, and each of the parties hereby irrevocably
consents to the personal jurisdiction of any such court in any such suit, action, or proceeding.

     17. Counterparts. This Agreement may be executed in more than one counterpart, each of
which shall be deemed an original, and all of which shall be deemed a single agreement.

     18. Headings. The headings herein are for convenience only and shall not affect the
interpretation of this Agreement.

[The remainder of this page is intentionally left blank.]

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

	 	 	 	 	 
	 	Cornerstone BioPharma, Inc.

 	 
	 	By:  	/s/ Craig Collard
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Executive

 	 
	 	/s/ Chenyqua Baldwin
 	 
	 	(Signature) 	 
	 

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