Document:

EX-10.2

Exhibit 10.2

[Cornerstone Letterhead]

November 6, 2012

Dear Alastair:

This letter confirms the basis on which the Compensation Committee of the Board of Directors of
Cornerstone Therapeutics, Inc. (the “Company”) has approved the award of restricted shares of
common stock of the Company (“Restricted Stock”) to you pursuant to the Company’s restricted stock
plan and your Executive Employment Agreement entered into as of November 6, 2012.

You will earn Restricted Stock upon the closing of transactions involving the acquisition or
divestiture by the Company of product assets, regardless of the structure of those transactions.
800 shares will be awarded at the closing of any such transaction for each million dollars of
transaction value, up to $100 million transaction value, and 200 shares will be awarded per million
dollars of additional transaction value, with a maximum award in respect of any transaction not to
exceed Restricted Stock having a market value at the time of award of $1 million.

The Restricted Stock will vest (its restrictions will lapse) in equal parts on the first two
anniversaries of its award date.

By agreeing to this basis for your equity compensation you acknowledge that the decision to proceed
or not to proceed with any transaction will be taken at the absolute discretion of the Company’s
Board of Directors, and this arrangement does not give you any rights against the Company or its
Board of Directors to claim any compensation in respect of transactions that for any reason do not
proceed to closing.

Please acknowledge our receipt and agreement to this letter by signing below.

Yours sincerely,

/s/ Craig Collard       

Craig Collard, CEO

Accepted and Acknowledged:

/s/ Alastair McEwan       

Alastair McEwanEX 10.1 2012 President's Incentive Plan

EXHIBIT 10.1

FHLBank San Francisco
2012 PRESIDENT’S INCENTIVE PLAN

PLAN PURPOSE
To optimize individual and Bank performance in accomplishing Board-approved goals and objectives.

PLAN OBJECTIVES
To motivate the Bank President to exceed individual and Bank goals that support the Bank's mission and strategic plan. To attract and retain an outstanding executive by providing a competitive total compensation program, including an annual incentive award opportunity.

ELIGIBILITY
The 2012 participant is the Bank President.

The Bank President must be employed by the Bank through December 31, 2012 to be eligible for an incentive award under the 2012 plan. A Bank President hired, promoted, or who takes a leave of absence during the plan year is eligible to participate on a pro-rata basis. A Bank President hired or promoted on or after October 1st may be eligible to participate during the current plan year at the discretion of the Board.

INCENTIVE GOALS AND MEASURES

Incentive Goals
For the Bank President there are individual and Bank goals, which are weighted.  The individual goal(s) support the Bank-wide goals (See 2012 Short-Term Incentive Plan Goals and Measures) and objectives.

The three Bank goals for 2012 are:

		
	1.
	2012 Risk Management Goal:  Complete the 2012 Enterprise Risk Management Governance Program Deliverables.

		
	2.
	2012 Franchise Enhancement Goal: Position the Bank and the FHLBank System to remain an integral component of the changing housing and financial services markets.  Continue to meet the Bank's mission objectives within these markets as they are currently structured, but also influence and adapt to structural changes in those markets.

		
	3.
	2012 Community Investment Goal:  Support and promote the Bank's Affordable Housing Program and Community Investment Programs.

Incentive Goal Achievement Measures
The plan rewards levels of goal achievement are as follows:
	
		
	Achievement Level
	Measure Definition

	Far Exceeds

	The most optimistic achievement level that far exceeds expected performance.

	Exceeds

	An optimistic achievement level that exceeds expected performance.

	Meets

	Performance that is expected under the Bank's Plan.  

	Threshold

	Minimum level of performance that must be achieved for awards to be paid.

Actual achievement of Bank goals is subject to adjustment for changes resulting from changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board.  Impacts of OTTI credit charges are excluded from the Meets achievement level and measurement of performance for the Adjusted Return on Capital Spread component of the Franchise Enhancement Goal. Impacts of dividend benchmark variances to plan are also excluded from the measurement of Adjusted Return on Capital Spread performance.

1

2

AWARD DETERMINATION AND OPPORTUNITY
Any award will be based on success in achieving the individual and Bank goals, and on the overall performance. At yearend, accomplishments will be assessed and a percentage of achievement will be determined for each goal and any award determination will be at the discretion of the Board.
	
			
	Percentage of Achievement Scale
	Aggregate Goal Achievement
	Award Range (Percentage of 2012 Base Salary)

	0% - 150%
	150% = Far Exceeds
	50%

	 
	125% = Exceeds
	48%

	 
	100% = Meets
	40%

	 
	75% = Threshold
	20%

For each goal, the percentage of achievement will be multiplied by the applicable weights. Each weighted achievement will then be added to determine the total weighted achievement. The basis for any award opportunity for the participant is total weighted achievement. Total weighted achievement from Threshold achievement level (75-99%) is below the Meets achievement level and, therefore, results in an award less than one granted for achieving the Meets achievement level. Total weighted achievement below the Threshold achievement level normally will not result in an incentive award.  The Board of Directors has full discretion to modify any and all incentive payments. Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank's financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

APPROVAL OF INCENTIVE AWARDS
The incentive award is approved by the Board of Directors prior to payment. The Board of Directors has full discretion to approve any award, including an award for achievement below Threshold. Awards will be considered by the Board of Directors at the January 2013 Board meeting or as soon thereafter as reasonably practicable.

PLAN ADMINISTRATION AND IMPLEMENTATION
The Board of Directors oversees the administration and interpretation of the Plan.

	
			
	President and CEO Goal Weights

	 
	Corporate Goal Weights
	Goal Weight (includes individual goals)

	Individual
	N/A
	10.0%

	Risk Management
	30.0%
	20.0%

	Franchise Enhancement
	50.0%
	45.0%

	Community Investment
	20.0%
	18.0%

	Total
	100.0%
	100.0%

Payments under this plan are subject to approval by the Board of Directors. Any awards will be distributed as soon as administratively possible following the effective date of Board approval. All compensation and incentive plans are subject to review and revision at the Bank's discretion.  Such plans are reviewed regularly to ensure they are competitive and equitable. Executive Officer compensation and benefit programs are subject to Federal Housing Finance Agency review and oversight, and payments made under such programs may be subject to the Agency's approval under applicable laws and regulations in effect from time to time.

3EX 10.2 2012 Executive Incentive Plan

EXHIBIT 10.2

FHLBank San Francisco
2012 EXECUTIVE INCENTIVE PLAN

PLAN PURPOSE
To optimize individual and Bank performance in accomplishing Board-approved goals and objectives.

PLAN OBJECTIVES
To motivate Bank executives to exceed individual and Bank goals that support the Bank's mission and strategic plan.  To attract and retain outstanding executives by providing a competitive total compensation program, including an annual incentive award opportunity.

ELIGIBILITY
Participants are Bank executive officers whose performance has a major impact on the Bank's success.  The 2012 participants are the incumbents in the Bank's senior officer positions, including:

Executive Vice President            
Senior Vice President, Chief Risk Officer and Senior Vice President, Chief Credit and Collateral Risk Management Officer
Senior Vice Presidents (excluding the Senior Vice President, Director of Internal Audit - participates in the Audit Executive Incentive Plan)

Participants must be employed by the Bank through December 31, 2012 to be eligible for an incentive award under the 2012 plan.  Participants hired, promoted, or who have a leave of absence during the plan year are eligible to participate on a pro-rata basis.  Participants hired or promoted on or after October 1st may be eligible to participate during the current plan year at the discretion of the Board.

INCENTIVE GOALS AND MEASURES

Incentive Goals
For each participant there are individual goals and Bank goals, which are weighted for each participant.  The individual goals support the Bank-wide goals (See 2012 Short-Term Incentive Plan Goals and Measures) and objectives.
 
The three Bank goals for 2012 are:

		
	1.
	2012 Risk Management Goal: Complete the 2012 Enterprise Risk Management Governance Program Deliverables.

		
	2.
	2012 Franchise Enhancement Goal: Position the Bank and the FHLBank System to remain an integral component of the changing housing and financial services markets.  Continue to meet the Bank's mission objectives within these markets as they are currently structured, but also influence and adapt to structural changes in those markets.

		
	3.
	2012 Community Investment Goal:  Support and promote the Bank's Affordable Housing Program and Community Investment Programs.

Incentive Goal Achievement Measures
The plan rewards levels of goal achievement are as follows:	
		
	Achievement Level
	Measure Definition

	Far Exceeds

	The most optimistic achievement level that far exceeds expected performance.

	Exceeds

	An optimistic achievement level that exceeds expected performance.

	Meets

	Performance that is expected under the Bank's Plan. 

	Threshold

	Minimum level of performance that must be achieved for awards to be paid.

Actual achievement of Bank goals is subject to adjustment for changes resulting from changes in financial strategies or policies, any significant change in Bank membership, as well as other factors determined by the Board. Impacts of OTTI credit charges are excluded from the Meets achievement level and measurement of performance for the Adjusted Return on Capital Spread component of the Franchise Enhancement Goal. Impacts of dividend benchmark variances to plan are excluded from the measurement of Adjusted Return on Capital Spread performance.

1

AWARD DETERMINATION AND OPPORTUNITY
All plan participant awards will be based on success in achieving individual and Bank goals, and on overall performance.  In the case of the Bank goals, the same achievement levels apply to all participants.  At yearend, accomplishments will be assessed and a percentage of achievement will be determined for each goal and any award determination will be at the discretion of the Board.
	
				
	 
	 
	 
	Award Range (Percentage of 2012 Base Salary)

	Percentage of Goal Achievement Scale

	Achievement Levels
	EVP/SVP

	0% - 150%

	150%
	= Far Exceeds
	50.0%

	 
	125% 
	= Exceeds
	48.0%

	 
	100%
	= Meets
	40.0%

	 
	75%
	= Threshold
	20.0%

For each goal, the percentage of achievement will be multiplied by the applicable goal weights.  Each weighted achievement will then be added to determine the total weighted achievement.  The basis for each participant's award opportunity is total weighted achievement.  Total weighted achievement from Threshold achievement level (75-99%) is below the Meets achievement level and, therefore, results in an award less than one granted for achieving the Meets achievement level.  Total weighted achievement below the Threshold achievement level normally will not result in an incentive award.  The Board of Directors has full discretion to modify any and all incentive payments.  Incentive compensation reductions may be made, but are not limited to the following circumstances: (i) if errors or omissions result in material revisions to the Bank's financial results, information submitted to a regulatory or a reporting agency, or information used to determine incentive compensation payouts; (ii) if information submitted to a regulatory or a reporting agency is untimely; or, (iii) if the Bank does not make appropriate progress in the timely remediation of examination, monitoring, or other supervisory findings and matters requiring attention.

APPROVAL OF INCENTIVE AWARDS
All incentive awards must be approved by the President and the Board of Directors prior to payment.  The Board of Directors has the discretion to approve any award, including an award for achievement below Threshold.  Awards will be considered by the Board of Directors at the January 2013 Board meeting, or as soon thereafter as reasonably practicable.

PLAN ADMINISTRATION AND IMPLEMENTATION
The President is responsible for overseeing the administration and interpretation of the Plan.

	
							
	2012 Executive Officer Goal Weights

	 
	Executive Vice President
	Senior Vice Presidents, 
Chief Risk Officer & 
Chief Credit and Collateral Risk Management Officer
	Senior Vice Presidents

	 
	Corporate Goal Weights
	Goal Weight (includes individual goals)
	Corporate Goal Weights
	Goal Weight 
(includes individual goals)
	Corporate Goal Weights
	Goal Weight (includes individual goals)

	Individual
	N/A
	20.0%
	N/A
	30.0%
	N/A
	30.0%

	Risk Management
	30.0%
	24.0%
	60.0%
	42.0%
	30.0%
	21.0%

	Franchise Enhancement
	50.0%
	40.0%
	26.0%
	18.2%
	50.0%
	35.0%

	Community Investment
	20.0%
	16.0%
	14.0%
	9.8%
	20.0%
	14.0%

	Total
	100.0%
	100.0%
	100.0%
	100.0%
	100.0%
	100.0%

Payments under this plan are subject to approval by the Board of Directors. Any awards will be distributed as soon as administratively possible following the effective date of Board approval.  All compensation and incentive plans are subject to review and revision at the Bank's discretion.  Such plans are reviewed regularly to ensure they are competitive and equitable. Executive Officer compensation and benefit programs are subject to Federal Housing Finance Agency review and oversight, and payments made under such programs may be subject to the Agency's approval under applicable laws and regulations in effect from time to time.

2

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