Document:

Exhibit 10.1

 

SEPARATION
AGREEMENT

 

THIS SEPARATION AGREEMENT (the “Agreement”) is made
effective as of February 23, 2005 (the “Effective Date”), between CURATIVE
HEALTH SERVICES, INC., a Minnesota corporation (the “Company”), and NANCY F.
LANIS (“Executive”), an individual resident of the State of New York.

 

WHEREAS, the Executive has served as Executive Vice
President, General Counsel and Corporate Secretary of the Company;

 

WHEREAS, no Change In Control has occurred, the
Company has decided to consolidate its headquarters and corporate functions in
Nashua, New Hampshire and has advised Executive that it requires her to move to
Nashua, New Hampshire if she is to continue employment with the Company, and
Executive has elected not to relocate to New Hampshire such that her last day
of employment with the Company will be May 31, 2005 (“Date of Termination”),
and the Company and Executive desire to assure a smooth transition of Executive’s
functions;

 

WHEREAS, the parties entered into an Employment
Agreement dated June 25, 2001 (the “Employment Agreement”), which was
amended in part by the Amendment to the Employment Agreement dated July 24,
2002 (“Assignment I”), the Acknowledgment of Assignment Agreement dated June 3,
2003 and the Amendment to and Second Acknowledgment of Assignment of Employment
Agreement dated August 19, 2003 (“Assignment II”);

 

NOW, THEREFORE, in consideration of the promises and
the mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:

 

1.                                       Separation
from Employment.  Executive’s last
day of employment shall be May 31, 2005 and Executive will be entitled to
continue to receive her current base salary through the Date of
Termination.  On the Date of Termination,
the Company shall pay Executive an amount equal to her accrued but unused
vacation as of May 31, 2005 and as of December 31, 2004 (which is equal to
8 days of pay) at Executive’s current base salary. Except as set forth in this
Agreement, all privileges and benefits of employment shall end as of the Date
of Termination. On the Date of Termination, Executive shall resign from any
officer positions which she currently holds. 
The Company’s obligations set forth in Sections 3.3 and 3.4 of Executive’s
Employment Agreement shall continue in full force and effect through May 31,
2005, and the Company shall make such payments to Executive in connection with
such provisions with the same promptness and regularity as has been the Company’s
practice.  In addition, in accordance
with Section 3.1(c), Executive shall continue to be entitled to
participate in the Company’s Executive Bonus Compensation Program through the
Date of Termination.

 

1.1                                 Retention
Bonus.  The Company shall grant to Executive, effective as of the date of this
Agreement, an award of 10,000 shares of the Company’s common stock, par value
$.01 per share, on the terms and subject to the conditions set forth in the
Restricted Stock Award Agreement (attached as Exhibit A) between the
Company and Executive.

 

1.2                                 Payment
Upon Termination.  Following her
execution of this Agreement and a general release in a form acceptable to the
Company (attached as Exhibit B) and a second release

 

 

in a form attached as Exhibit
C which will be executed on the Date of Termination, and provided that
executive does not revoke and/or rescind either release, Executive shall
receive no later than the sixteenth day following the Date of Termination a
lump sum payment in the gross amount of $250,076.00, subject to applicable
payroll withholding, which represents twelve months of Executive’s current base
salary, and, no later than June 30, 2005, a lump sum payment in the gross
amount of $74,572.00, subject to applicable payroll withholding, which
represents the arithmetic average of payments made to Executive pursuant to the
Company’s Executive Bonus Compensation program with respect to the three fiscal
years immediately preceding the fiscal year in which the Date of Termination
occurs.

 

1.3                                 Benefits
Upon Termination.  For a twelve-month
period beginning in June 2005 and continuing through May 2006 (“the
Benefit Period”), the Company shall arrange to provide Executive with welfare
benefits (including life and health insurance benefits) of substantially
similar design and cost to Executive as the welfare benefits and other employee
benefits available to Executive prior to the Date of Termination.  In the event that Executive shall obtain
full-time employment providing welfare benefits during the Benefit Period, such
benefits as otherwise receivable hereunder by Executive shall be
discontinued.  Coverage during the
Benefit Period shall run concurrently with COBRA continuation coverage and
shall be dependent upon Executive’s timely election of COBRA continuation
coverage.  After the end of coverage
during the Benefit Period, Executive shall be eligible for continued coverage
under COBRA at full COBRA rates for the balance of the COBRA continuation
coverage period, assuming that no basis for early termination of COBRA coverage
occurs during the Benefit Period or during the remaining period of COBRA
continuation coverage.  Company shall
report the cost of the welfare benefits, if applicable, during the Benefit
Period as taxable income to Executive. 
Executive will be permitted to retain the laptop computer, docking
station, bag, charger, monitor, keyboard and Blackberry and charging cradle.

 

1.4                                 Stock
Options Upon Termination.  To the
extent not otherwise required under the Company’s Stock Option Plan or any
award agreement with Executive, any unvested stock option awards theretofore
awarded to Executive which would otherwise vest and become exercisable during
the twelve (12) month period commencing on the Date of Termination shall vest
and become exercisable on the Date of Termination.  Except as set forth in this Section 1.4,
any unvested options shall expire as of the Date of Termination, and Executive
shall have the continuing right to exercise vested options in accordance with
the respective Stock Option Plan and award agreements.

 

2.                                       Executive’s
Obligations Following Termination. 
Executive acknowledges and confirms that she has continuing obligations
following the Date of Termination as set forth below.

 

2.1                                 Trade
Secrets and Confidential Information. 
Executive agrees that she shall, during the course of her employment and
thereafter, hold inviolate and keep secret all documents, materials, knowledge
or other confidential business or technical information of any nature
whatsoever disclosed to or developed by her or to which she had access as a
result of her employment (hereinafter referred to as “Confidential Information”).  Such Confidential Information shall include
technical and business information, including, but not limited, to, inventions,
research and development, engineering, products, designs, manufacture, methods,
systems, improvements, trade secrets, formulas, processes, marketing,
merchandising, selling,

 

2

 

licensing, servicing,
customer lists, records or financial information, manuals or Company strategy
concerning its business, strategy or policies. 
Executive agrees that all Confidential Information shall remain the sole
and absolute property of the Company. 
Executive shall not use, disclose, disseminate, publish, reproduce or
otherwise make available such Confidential Information to any person, firm,
corporation or other entity.  Upon
termination of her employment with the Company, Executive will leave with or
deliver to the Company all records and any compositions, articles, devices,
equipment and other items which disclose or embody Confidential Information
including all copies or items which disclose or embody Confidential Information
including all copies or specimens thereof, whether prepared by her or by
others.  The foregoing restrictions on
disclosure of Confidential Information shall apply so long as the information
has not properly come into the public domain through no action of Executive.

 

2.2                                 Transfer
of Inventions.  Executive, for
herself and her heirs and representatives, will promptly communicate and
disclose to the Company, and upon request will, without additional
compensation, execute all papers reasonably necessary to assign to the Company
or the Company’s nominees, free of encumbrance or restrictions, all inventions,
discoveries, improvements, whether patentable or not, conceived or originated
by Executive solely or jointly with others, at the Company’s expense or at the
Company’s facilities, or at the Company’s request, or in the course of her
employment, or based on knowledge or information obtained during the Term.  All such assignments shall include the patent
rights in this and all foreign countries. 
Notwithstanding the foregoing, this Section 2.2 shall not apply to
any invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on
Executive’s own time and (a) that does not relate (1) directly to the business
of the Company or (2) to the Company’s actual or demonstrably anticipated
research or development, or (b) that does not result from any work performed by
Executive for the Company.

 

2.3                                 Covenant
Not to Compete.  Executive agrees to
be bound and abide by the following covenant not to compete:

 

(a)                                  Term
and Scope.  During her
employment  and for a period of two (2)
years beginning on the Date of Termination , Executive will not render to any
Conflicting Organization (as hereinafter defined), services, directly or
indirectly, anywhere in the world in connection with any Conflicting Product,
except that Executive may accept employment with a large Conflicting
Organization whose business is diversified (and which has separate and distinct
divisions) if Executive first certifies to the Board of Directors in writing
that she has provided a copy of Section 5 of this Agreement to such
prospective employer, that such prospective employer is a separate and distinct
division of the Conflicting Organization and that Executive will not render
services directly or indirectly in respect of any Conflicting Product (as hereinafter
defined).  Such two-year time period
shall be tolled during any period that Executive is engaged in activity in
violation of this covenant.

 

(b)                                 Judicial
Action.  Executive and the Company
agree that, if the period of time or the scope of the restrictive covenant not
to compete contained in this Section 2.3 shall be adjudged unreasonable in
any court proceeding, then the period of time and/or scope shall be reduced
accordingly, so that this covenant may be enforced in such scope

 

3

 

and during such period of time as is judged by the court to be
reasonable.  In the event of a breach or
violation of this Section 2.3 by Executive, the parties agree than in
addition to all other remedies, the Company shall be entitled to equitable
relief for specific performance, and Executive hereby agrees and acknowledges
that the Company has no adequate remedy at law of the breach of the covenants
contained herein.

 

(c)                                  Definitions.  For purposes of this Agreement, the following
terms shall have the following meanings:

 

“Conflicting Product” means any product, method or
process, system or service of any person or organization other than the
Company, in existence or under development at the time Executive’s employment
with the Company terminates, that is the same as or similar to or competes with
a product, method or process, system or service of or provided by the Company
or any of its affiliates or about which Executive acquires Confidential
Information.

 

“Conflicting Organization” means any person or
organization which is engaged in or about to become engaged in, research on or
development, production, marketing, licensing, selling or servicing of a
Conflicting Product.

 

2.4                                 Disclosure
to Prospective Employers.  Executive
will disclose to any prospective employer, prior to accepting employment, the
existence of Section 2 of this Agreement. 
The obligation imposed by this Section 2 shall terminate two (2)
years after termination of Executive’s employment with the Company; provided,
however, the running of such two-year period shall be tolled to the extent the
covenant not to compete contained in Section 2.3(a) hereof is tolled.

 

2.5                                 Non-Solicitation.  For one (1) year beginning on the Date of
Termination the Executive shall not directly or indirectly solicit or hire, or
assist any other person in soliciting or hiring, any employee of the Company
(as of the Date of Termination) or any person who, as of the Date of
Termination, was in the process of being recruited by the Company or induce any
such employee to terminate his or her employment with the Company.  Notwithstanding the foregoing, Executive may
solicit for hire any person employed by the Company and based in Hauppauge, New
York who does not relocate to Nashua, New Hampshire.

 

3.                                       General
Release.  In consideration for
Executive entering into this Agreement, Executive and the Company agree to
execute a mutual general release in the form attached as Exhibit B.  Executive and the Company agree to sign a
second mutual general release on the Date of Termination in the form attached
as Exhibit C. In the event that Executive does not sign Exhibits B
and/or C or signs and rescinds Exhibit B and/or Exhibit C, the Separation
Agreement and the Mutual Releases shall be null and void and the Company shall
have no obligations under either Mutual Release or the Separation Agreement.

 

4.                                       Agreement
to Cooperate.  Executive agrees that
she will reasonably cooperate with the Company, and the Company agrees that it
will promptly reimburse Executive (upon receipt of reasonably appropriate
documentation) for any reasonable out-of-pocket expenses (e.g., food, lodging,
telephone costs and reasonable attorneys fees for counsel acceptable to the
Company, to

 

4

 

the extent necessary or
appropriate) with respect to any claims, charges or lawsuits brought, or
threatened to be brought, against the Company and its agents relating to events
which transpired during Executive’s employment at the Company and to cases
which she managed in her capacity as General Counsel of the Company.  Following the end of her employment,
Executive agrees to make herself available upon reasonable notice and at
reasonable times to discuss with the Company and its counsel issues related to
claims, charges or lawsuits against the Company provided that nothing shall
unreasonably interfere with Executive’s seeking or maintaining employment
following the Date of Termination. 
Executive agrees to appear without subpoena for deposition or testimony
at the reasonable request of  the
Company.  In the event that Executive is
requested by the Company to travel out of town in connection with her agreement
to cooperate as provided herein, the Company agrees to reimburse Executive for
her out-of-pocket costs.  Executive
agrees to provide such assistance to the Company for up to eighty (80) hours
after the Date of Termination.  If asked
to provide assistance to the Company in excess of eighty (80) hours, Executive
shall be compensated at a rate of $125/hour.

 

5.                                       Miscellaneous

 

5.1                                 Notices.
Any notice required or permitted to be delivered hereunder shall be in writing
and shall be deemed to be delivered on the earlier of (i) the date received, or
(ii) the date of delivery, refusal or non-delivery indicated on the return
receipt, if deposited in a United States Postal Service depository, postage
prepaid, sent registered or certified mail, return receipt requested, addressed
to the party to receive the same at the address of such party set forth below,
or at such other address as may be designated in a notice delivered or mailed
as herein provided.

 

	
  To Company:

  	
  Curative Health Services, Inc.

  Executive Tower

  61 Spit Brook Road

  Nashua, NH 03060

  Attention: Paul F. McConnell

  President and Chief Executive Officer

  
	
   

  	
   

  
	
  Executive:

  	
  Nancy F. Lanis

  37 Longview Road

  Port Washington, NY 11050

  

 

5.2                                 Headings.
The headings of the articles and sections of this Agreement are inserted for
convenience only and shall not be deemed a part of or affect the construction
or interpretation of any provision hereof.

 

5.3                                 Modifications;
Waiver. No modification of any provision of this Agreement or waiver of any
right or remedy herein provided shall be effective for any purpose unless
specifically set forth in a writing signed by the party to be bound thereby. No
waiver of any right or remedy in respect of any occurrence or event on one
occasion shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.

 

5

 

5.4                                 Entire
Agreement. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes and replaces any and all
other agreements, oral or written, including, but not limited to, the Employment
Agreement,  Assignment I and Assignment
II and/or any other assignments or amendments, heretofore made with respect
thereto.

 

5.5                                 Severability.
Any provision of this Agreement prohibited by or unlawful or unenforceable
under any applicable law of any jurisdiction shall as to such jurisdiction be
ineffective without affecting any other provision hereof. To the full extent,
however, that the provisions of such applicable law may be waived, they are
hereby waived, to the end that this Separation Agreement be deemed to be a
valid and binding agreement enforceable in accordance with its terms.

 

5.6                                 Controlling
Law. This Agreement has been entered into by the parties in the State of
New York and shall be continued and enforced in accordance with the laws of
that State.

 

5.7                                 Assignments.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder to any entity that controls the
Company, that the Company controls or that may be the result of the merger,
consolidation, acquisition or reorganization of the Company and another entity.
Executive agrees that this Agreement is personal to her and her rights and
interest hereunder may not be assigned, nor may her obligations and duties
hereunder be delegated (except as to delegation in the normal course of
operation of the Company), and any attempted assignment or delegation in
violation of this provision shall be void.

 

5.8                                 Attorney
Fees. In the event of litigation between the parties, to enforce their
respective rights under this Agreement, the prevailing party shall be entitled
to receive from the non-prevailing party reimbursement of the prevailing party’s
reasonable attorney’s fees and costs at all levels of trial and appeal.

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Effective Date.

 

	
   

  	
  CURATIVE
  HEALTH SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  Chief Executive Officer and President

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Nancy
  F. Lanis

  
	
   

  	
  Dated:

  	
   

  
				

 

6

 

Exhibit A

 

Restricted Stock Award Agreement

 

Incorporated by reference from Exhibit 10.2

 

 

1

 

 

Exhibit B

 

MUTUAL
GENERAL RELEASE

 

This
Mutual General Release (“General Release”) is made and entered into by Nancy
Lanis (“Executive”) and Curative Health Services, Inc. (the “Company”).

 

WHEREAS, the Company and Executive are parties to
a Separation Agreement with an effective date of February 23, 2005 (“Separation
Agreement”);

 

WHEREAS,
the Executive has served as Executive Vice President, General Counsel and
Corporate Secretary of the Company;

 

WHEREAS,
no Change In Control has occurred, the Company has decided to consolidate its
headquarters and corporate functions in Nashua, New Hampshire and has advised
Executive that it requires her to move to Nashua, New Hampshire if she is to
continue employment with the Company, and Executive has elected not to relocate
to New Hampshire such that her last day of employment with the Company will be
May 31, 2005 (“Date of Termination”), and the Company and Executive desire to
assure a smooth transition of Executive’s functions;

 

WHEREAS,
the parties entered into an Employment Agreement dated June 25, 2001 (the “Employment
Agreement”), which was amended in part by the Amendment to the Employment
Agreement dated July 24, 2002 (“Assignment I”), the Acknowledgment of
Assignment Agreement dated June 3, 2003 and the Amendment to and Second
Acknowledgment of Assignment of Employment Agreement dated August 19, 2003
(“Assignment II”);

 

WHEREAS, under the terms of the Separation
Agreement, which Executive agrees are fair and reasonable, Executive and the
Company have agreed to enter into this General Release;

 

NOW, THEREFORE, in consideration of the
provisions and the mutual covenants herein contained, the parties agree as
follows:

 

1.                                      Release
by Executive.  For the
consideration expressed in the Separation Agreement and except as otherwise set
forth herein, Executive does hereby fully and completely release, discharge,
covenant not to sue and waive any and all claims, complaints, causes of action,
demands, suits, and damages, of any kind or character, which she has or may have
against the Releasees, as hereinafter defined, arising out of any acts,
omissions, conduct, decisions, behavior, or events occurring up through the
date of her signature on this General Release. 
For purposes of this General Release, the “Releasees” means collectively
the Company, its predecessors, successors, assigns, parents, affiliates,
subsidiaries, related companies, officers, directors, shareholders, agents,
servants, counsel, executives, insurers, and each and all thereof.

 

Executive understands and accepts that her release of claims includes
any and all possible statutory claims, including but not limited to claims
based upon:  Title VII of the Federal
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act;
the Older Worker Benefit Protection Act; the Americans with Disabilities Act;
the Equal Pay Act; the Fair Labor

 

1

 

Standards Act; the
Executive Retirement Income Security Act; the Minnesota Human Rights Act; the
Minneapolis Code of Ordinances; the N.Y. Executive Law, or any other federal, state or local statute,
ordinance or law.  Executive also
understands that she is giving up any and all other claims, agreements,
obligations, losses, damages, injuries, demands and causes of action, known or
unknown, suspected or unsuspected, including but not limited to those grounded
in contract (including but not limited to any claims under the Employment
Agreement or any assignment thereto) or tort theories, including but not
limited to:  wrongful discharge; breach
of contract; tortious interference with contractual relations; promissory
estoppel; breach of the implied covenant of good faith and fair dealing; breach
of express or implied promise; breach of manuals or other policies; assault;
battery; fraud; sexual harassment; false imprisonment; invasion of privacy;
intentional or negligent misrepresentation; defamation, including libel,
slander, discharge defamation and self-publication defamation; discharge in
violation of public policy; whistleblower; intentional or negligent infliction
of emotional distress; claims for unpaid compensation (including, but not
limited to any claim for severance or bonus relating to 2005 performance); any
claims under a Change in Control provision; or any other theory, whether legal
or equitable.

 

Executive further understands that she is releasing, and does hereby
release, any claims for damages, by charge or otherwise, whether brought by her
or on her behalf by any other party, governmental or otherwise, and agrees not
to institute any claims for damages via administrative or legal proceedings
against any of the Releasees.  Executive
also waives and releases any and all rights to money damages or other legal
relief awarded by any governmental agency related to any charge or other claim
against any of the Releasees.

 

This General Release does not apply to any claims arising from the
Company’s prospective obligations under the Separation Agreement, under any
Stock Option Award Agreements, any Restricted Stock Agreement or any vested
obligations under any employee benefit plans or programs in which Executive
participates under Section 3.2, if applicable, subject to all terms and
conditions of such plans or programs, following the date on which Executive
signs this General Release.

 

Neither this Mutual General Release nor the Separation Agreement shall
modify, expand or reduce any obligation of the Company, if such obligation
exists, to indemnify Executive from any claims arising out of the performance
of her services as an employee, officer or counsel of the Company (including
any of its affiliates, subsidiaries and related entities), as provided by
applicable law and in accordance with the Company’s by-laws.  Nothing herein is intended to expand, reduce
or limit the Company’s obligations to provide the benefit of insurance coverage
maintained by the Company (including D&O coverage), if any, for Executive
in connection with claims based on actions or omissions of Executive during the
period of Executive’s employment with the Company except that to the extent the
Company has D&O coverage, the D&O coverage will afford the Executive
the same coverage as that afforded other former executive officers as of the
Date of Termination (including any tail coverage policies, if applicable).

 

2.                                      Representation
by Executive.  Executive
represents and warrants that, to the best of her knowledge, she has not engaged
in any activities during her employment which would constitute wrongful conduct
including, but not limited to, fraud, misrepresentation,

 

2

 

violation
of any federal, state or local law, or any conduct contrary to company
policy.  In executing this General
Release, the Company has relied on the representations by Executive in this Section 2
which representations are a material term of this General Release.

 

3.                                      Release
by Company.  Except for those
prospective obligations created by or arising out of the Separation Agreement
or, as set forth herein, any claims by third-parties, whenever and wherever
such claims may arise and regardless of whether such claims were known or
unknown, suspected or unsuspected, revealed or hidden, or developed or
undeveloped through the date on which the Company signs this General Release,
the Company (which for purposes of this Section 3 shall include the
Company and its affiliates, subsidiaries, and related entities) releases and
discharges, and covenants not to sue, Executive from and with respect to any
and all claims, agreements, obligations, losses, damages, injuries, demands and
causes of action, known or unknown, suspected or unsuspected, arising out of or
in any way connected with Executive’s employment or services as an officer with
or counsel to the Company or any other occurrences, actions, omissions or
claims whatsoever, known or unknown, suspected or unsuspected, which the
Company now owns or holds or has at any time heretofore owned or held as
against Executive up through the date on which it signs this General Release.

 

4.                                      Rescission.  Executive has been informed of her right to
rescind this General Release by written notice to the Company within fifteen
(15) calendar days after the execution of this General Release.  Executive has been informed and understands
that any such rescission must be in writing and delivered to the Company by
hand, or sent by mail within the 15-day time period.  If delivered by mail, the rescission must
be:  (1) postmarked within the applicable
period and (2) sent by certified mail, return receipt requested, to Paul
McConnell, Chief Executive, Curative Health Services, Inc., Executive Tower, 61
Spit Brook Road, Nashua, NH 03060.  If
Executive rescinds, this Mutual General Release shall be null and void and the
Company shall have no obligations under the Separation Agreement.

 

5.                                      Acceptance
Period; Advice of Counsel.  The
terms of this General Release will be open for acceptance by Executive for a
period of 21 days, during which time Executive may consider whether or not to
accept this General Release.  Executive
agrees that changes to this General Release, whether material or immaterial,
will not restart this acceptance period. 
Executive is hereby advised to seek the advice of an attorney regarding
this General Release.

 

6.                                      Binding
Agreement.  This General Release
shall be binding upon, and inure to the benefit of, Executive and the Company
and their respective successors and permitted assigns.

 

7.                                      Representation.  Executive hereby acknowledges and states
that she has read this General Release. 
Executive further represents that this General Release is written in
language which is understandable to her, that she fully appreciates the meaning
of its terms, and that she enters into this General Release freely and
voluntarily.

 

8.                                      Governing Law.  The Executive and the Company agree that New
York law shall govern the construction and interpretation of this General
Release which has been negotiated by the parties.

 

3

 

IN WITNESS WHEREOF, the Parties, after due
consideration, have authorized, executed, and delivered this General Release.

 

	
   

  	
  CURATIVE HEALTH
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its: Chief
  Executive Officer and President

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Nancy Lanis

  
	
   

  	
  Dated:

  	
   

  
				

 

4

 

 

Exhibit C

 

MUTUAL
GENERAL RELEASE

 

This
Mutual General Release (“General Release”) is made and entered into by Nancy
Lanis (“Executive”) and Curative Health Services, Inc. (the “Company”).

 

WHEREAS, the Company and Executive are parties to
a Separation Agreement with an effective date of February 23, 2005 (“Separation
Agreement”);

 

WHEREAS,
the Executive has served as Executive Vice President, General Counsel and
Corporate Secretary of the Company;

 

WHEREAS,
no Change In Control has occurred, the Company has decided to consolidate its
headquarters and corporate functions in Nashua, New Hampshire and has advised
Executive that it requires her to move to Nashua, New Hampshire if she is to
continue employment with the Company, and Executive has elected not to relocate
to New Hampshire such that her last day of employment with the Company will be
May 31, 2005 (“Date of Termination”), and the Company and Executive desire to
assure a smooth transition of Executive’s functions;

 

WHEREAS,
the parties entered into an Employment Agreement dated June 25, 2001 (the “Employment
Agreement”), which was amended in part by the Amendment to the Employment
Agreement dated July 24, 2002 (“Assignment I”), the Acknowledgment of
Assignment Agreement dated June 3, 2003 and the Amendment to and Second
Acknowledgment of Assignment of Employment Agreement dated August 19, 2003
(“Assignment II”);

 

WHEREAS, under the terms of the Separation
Agreement, which Executive agrees are fair and reasonable, Executive and the
Company have agreed to enter into this General Release;

 

NOW, THEREFORE, in consideration of the
provisions and the mutual covenants herein contained, the parties agree as
follows:

 

1.                                      Release
by Executive.  For the
consideration expressed in the Separation Agreement and except as otherwise set
forth herein, Executive does hereby fully and completely release, discharge,
covenant not to sue and waive any and all claims, complaints, causes of action,
demands, suits, and damages, of any kind or character, which she has or may have
against the Releasees, as hereinafter defined, arising out of any acts,
omissions, conduct, decisions, behavior, or events occurring up through the
date of her signature on this General Release. 
For purposes of this General Release, the “Releasees” means collectively
the Company, its predecessors, successors, assigns, parents, affiliates,
subsidiaries, related companies, officers, directors, shareholders, agents,
servants, counsel, executives, insurers, and each and all thereof.

 

Executive understands and accepts that her release of claims includes
any and all possible statutory claims, including but not limited to claims
based upon:  Title VII of the Federal
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act;
the Older Worker Benefit Protection Act; the Americans with Disabilities Act;
the Equal Pay Act; the Fair Labor

 

1

 

Standards Act; the
Executive Retirement Income Security Act; the Minnesota Human Rights Act; the
Minneapolis Code of Ordinances; the N.Y. Executive Law, or any other federal, state or local statute,
ordinance or law.  Executive also
understands that she is giving up any and all other claims, agreements,
obligations, losses, damages, injuries, demands and causes of action, known or
unknown, suspected or unsuspected, including but not limited to those grounded
in contract (including but not limited to any claims under the Employment
Agreement or any assignment thereto) or tort theories, including but not
limited to:  wrongful discharge; breach
of contract; tortious interference with contractual relations; promissory
estoppel; breach of the implied covenant of good faith and fair dealing; breach
of express or implied promise; breach of manuals or other policies; assault;
battery; fraud; sexual harassment; false imprisonment; invasion of privacy;
intentional or negligent misrepresentation; defamation, including libel,
slander, discharge defamation and self-publication defamation; discharge in
violation of public policy; whistleblower; intentional or negligent infliction
of emotional distress; claims for unpaid compensation (including, but not
limited to any claim for severance or any and all bonuses); any claims under a
Change in Control provision; or any other theory, whether legal or equitable.

 

Executive further understands that she is releasing, and does hereby
release, any claims for damages, by charge or otherwise, whether brought by her
or on her behalf by any other party, governmental or otherwise, and agrees not
to institute any claims for damages via administrative or legal proceedings
against any of the Releasees.  Executive
also waives and releases any and all rights to money damages or other legal
relief awarded by any governmental agency related to any charge or other claim
against any of the Releasees.

 

This General Release does not apply to any claims arising from the
Company’s prospective obligations under the Separation Agreement, under any
Stock Option Award Agreements, any Restricted Stock Agreement or any vested
obligations under any employee benefit plans or programs in which Executive
participates under Section 3.2, if applicable, subject to all terms and
conditions of such plans or programs, following the date on which Executive
signs this General Release.

 

Neither this Mutual General Release nor the Separation Agreement shall
modify, expand or reduce any obligation of the Company, if such obligation
exists, to indemnify Executive from any claims arising out of the performance
of her services as an employee, officer or counsel of the Company (including
any of its affiliates, subsidiaries and related entities), as provided by
applicable law and in accordance with the Company’s by-laws.  Nothing herein is intended to expand, reduce
or limit the Company’s obligations to provide the benefit of insurance coverage
maintained by the Company (including D&O coverage), if any, for Executive
in connection with claims based on actions or omissions of Executive during the
period of Executive’s employment with the Company except that to the extent the
Company has D&O coverage, the D&O coverage will afford the Executive
the same coverage as that afforded other former executive officers as of the
Date of Termination (including any tail coverage policies, if applicable).

 

2.                                      Representation
by Executive.  Executive
represents and warrants that, to the best of her knowledge, she has not engaged
in any activities during her employment which would constitute wrongful conduct
including, but not limited to, fraud, misrepresentation, violation of any
federal, state or local law, or any conduct contrary to company policy.  In

 

2

 

executing this General
Release, the Company has relied on the representations by Executive in this Section 2
which representations are a material term of this General Release.

 

3.                                      Release
by Company.  Except for those
prospective obligations created by or arising out of the Separation Agreement
or, as set forth herein, any claims by third-parties, whenever and wherever
such claims may arise and regardless of whether such claims were known or
unknown, suspected or unsuspected, revealed or hidden, or developed or
undeveloped through the date on which the Company signs this General Release,
the Company (which for purposes of this Section 3 shall include the
Company and its affiliates, subsidiaries, and related entities) releases and
discharges, and covenants not to sue, Executive from and with respect to any
and all claims, agreements, obligations, losses, damages, injuries, demands and
causes of action, known or unknown, suspected or unsuspected, arising out of or
in any way connected with Executive’s employment or services as an officer with
or counsel to the Company or any other occurrences, actions, omissions or claims
whatsoever, known or unknown, suspected or unsuspected, which the Company now
owns or holds or has at any time heretofore owned or held as against Executive
up through the date on which it signs this General Release.

 

4.                                      Rescission.  Executive has been informed of her right to
rescind this General Release by written notice to the Company within fifteen
(15) calendar days after the execution of this General Release.  Executive has been informed and understands
that any such rescission must be in writing and delivered to the Company by
hand, or sent by mail within the 15-day time period.  If delivered by mail, the rescission must
be:  (1) postmarked within the applicable
period and (2) sent by certified mail, return receipt requested, to Paul
McConnell, Chief Executive, Curative Health Services, Inc., Executive Tower, 61
Spit Brook Road, Nashua, NH 03060.  If
Executive rescinds, this Mutual General Release shall be null and void and the
Company shall have no obligations under the Separation Agreement.

 

5.                                      Acceptance
Period; Advice of Counsel.  The
terms of this General Release will be open for acceptance by Executive for a
period of 21 days, during which time Executive may consider whether or not to
accept this General Release.  Executive
agrees that changes to this General Release, whether material or immaterial,
will not restart this acceptance period. 
Executive is hereby advised to seek the advice of an attorney regarding
this General Release.

 

6.                                      Binding
Agreement.  This General Release
shall be binding upon, and inure to the benefit of, Executive and the Company
and their respective successors and permitted assigns.

 

7.                                      Representation.  Executive hereby acknowledges and states
that she has read this General Release. 
Executive further represents that this General Release is written in
language which is understandable to her, that she fully appreciates the meaning
of its terms, and that she enters into this General Release freely and
voluntarily.

 

8.                                      Governing Law.  The Executive and the Company agree that New
York law shall govern the construction and interpretation of this General
Release which has been negotiated by the parties.

 

3

 

IN WITNESS WHEREOF, the Parties, after due
consideration, have authorized, executed, and delivered this General Release.

 

	
   

  	
  CURATIVE HEALTH
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:  Chief Executive Officer and President

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Nancy Lanis

  
	
   

  	
  Dated:

  	
   

  
				

 

4Exhibit 10.2

 

Exhibit A

 

RESTRICTED
STOCK AWARD AGREEMENT

 

THIS AGREEMENT, dated as of February 23, 2005, is
between CURATIVE HEALTH SERVICES, INC., a Minnesota corporation (together with
any of its subsidiaries, the (“Company”), and NANCY F. LANIS, an individual
resident of the State of New York (“Executive”).

 

RECITALS

 

A.                                   The
Company wishes to grant to Executive, effective as of the date of this
Agreement, an award of restricted shares of the Company’s common stock, par
value $.01 per share (the “Common Stock”), on the terms and subject to the
conditions set forth in this Agreement and the Company’s 2001 Broad-Based Stock
Incentive Plan.

 

B.                                     Executive
desires to accept such grant.

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, the parties hereto hereby agree as follows:

 

1.                                       Definitions.  As used in this Agreement, the following
terms have the meanings set forth below:

 

“Award” has the meaning ascribed to such term in Section 2
hereof.

 

“Board” means the Board of Directors of the Company.

 

“Cause” shall mean any of the following:

 

(a)                                  the
Executive’s willful act of fraud, embezzlement, dishonesty or other misconduct
that materially damages the Company, its subsidiaries and affiliates;

 

(b)                                 any
intentional act or omission by Executive, other than that made in good faith,
that is detrimental in any material respect to the interests of the Company,
its subsidiaries and affiliates;

 

(c)                                  the
commission by Executive of a felony; or

 

(d)                                 the
material breach by Executive of her agreements or obligations under the
Separation Agreement.

 

No termination for Cause pursuant to the preceding
clause (d) shall occur unless the Company has provided Executive with written
notice of the existence of such Cause, and Executive is given at least fifteen
(15) days to cure, except that no such notice shall be required if the act or
omission constituting Cause is not susceptible of cure.  Executive represents and warrants that to the
best of her knowledge she has not engaged in any activities during her
employment which

 

 

would constitute wrongful conduct including, but not
limited to, fraud, misrepresentation, violation of any federal, state or local
law, or any conduct contrary to company policy nor has she engaged in any
conduct which would constitute “Cause” under this Agreement.  The Company is not aware of any events which
would constitute “Cause” up through the date of this Agreement.

 

“Change of Control” shall mean any of the following:

 

(a)                                  a
sale of all or substantially all of the assets of the Company;

 

(b)                                 the
acquisition of more than fifty percent (50%) of the Common Stock of the Company
(with all classes or series thereof treated as a single class) by any person or
group of persons, except a Permitted Shareholder (as hereinafter defined),
acting in concert. A “Permitted Shareholder” means a holder, as of the date of
this Agreement, of Common Stock;

 

(c)                                  a
reorganization of the Company wherein the holders of Common Stock of the
Company receive stock in another company (other than a subsidiary of the
Company), a merger of the Company with another company wherein there is an
fifty percent (50%) or greater change in the ownership of the Common Stock of
the Company as a result of such merger, or any other transaction in which the
Company (other than as the parent corporation) is consolidated for federal
income tax purposes or is eligible to be consolidated for federal income tax
purposes with another corporation;

 

(d)                                 in
the event that the Common Stock is traded on an established securities market,
a public announcement that any person has acquired or has the right to acquire
beneficial ownership of more than fifty percent (50%) of the then-outstanding
Common Stock and for this purpose the terms “person” and “beneficial ownership”
shall have the meanings provided in Section 13(d) of the Securities and
Exchange Act of 1934 or related rules promulgated by the Securities and
Exchange Commission, or the commencement of or public announcement of an
intention to make a tender offer or exchange offer for more than fifty percent
(50%) of the then outstanding Common Stock;

 

(e)                                  a
majority of the Board of Directors is not comprised of Continuing Directors. A “Continuing
Director” means a director recommended by the Board of Directors of the Company
for election as a director of the Company by the stockholders; or

 

(f)                                    the
Board of Directors of the Company, in its sole and absolute discretion,
determines that there has been a sufficient change in the share ownership of
the Company to constitute a change of effective ownership or control of the
Company.

 

Executive agrees that no Change In Control has occurred as of the date
of this Agreement.

 

2

 

“Code” means the Internal Revenue Code of 1986, as
amended.

 

“Common Stock” has the meaning specified in Recital A
hereof.

 

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.

 

“Plan” means the Company’s 2001 Broad-Based Stock
Incentive Plan, as amended from time to time.

 

“Shares” means, collectively, the shares of Common
Stock subject to the Award, whether or not such shares are Vested Shares.

 

“Separation Agreement” means the Separation Agreement,
made effective as of February 23, 2005,
between the Company and Executive.

 

“Vested Shares” means the Shares with respect to which
the Award has vested at any particular time.

 

2.                                       Award.

 

(a)                                  The Company, effective as of the
date of this Agreement, hereby grants to Executive a restricted stock award of
10,000 shares of Common Stock (the “Award”), subject to the terms and
conditions set forth herein and in the Plan.

 

(b)                                 The parties agree that for tax
purposes hereunder the value of the Shares shall be equal to the closing price
of the Common Stock (as reported on the Nasdaq National Market) on May 31,
2005.

 

3.                                       Vesting.

 

(a)                                  Subject to the terms and
conditions of this Agreement, all of the Shares shall vest on May 31, 2005.

 

(b)                                 Notwithstanding the vesting
provisions contained in Section 3(a) above, but subject to the other terms
and conditions set forth herein, if, prior to the vesting of the Shares in
accordance with Section 3(a) above, a Change in Control of the Company
occurs, or Executive’s employment with the Company is terminated by the Company
without Cause, then all of the Shares shall immediately vest on the date of
such Change In Control or termination of employment, as the case may be.

 

(c)                                  Except as provided in Section 3(b),
if Executive ceases to be an employee for any reason prior to the vesting of
the Shares, such Shares remaining unvested as of the date of termination shall
be immediately and irrevocably forfeited and the Executive will retain no
rights with respect to the forfeited Shares.

 

3

 

4.                                       Restriction
on Transfer of Shares.  The Shares
cannot be sold, assigned, transferred, gifted, pledged, hypothecated, or in any
manner encumbered or disposed of at any time prior to vesting pursuant to Section 3
above.

 

5.                                       Issuance
of Shares and Custody of Certificates. 
The Company shall cause a stock certificate or certificates evidencing
the Shares to be issued in the name of the Executive, which certificate or
certificates shall be held by the Secretary of the Company or the stock
transfer agent or brokerage service selected by the Secretary of the Company to
provide such services for the Plan.  The
Shares shall be restricted from transfer and the certificate or certificates
may bear an appropriate legend referring to the restrictions applicable to the
Shares.  Executive hereby agrees to the
retention by the Company of the Shares and to execute and deliver to the
Company a blank stock power with respect to the Shares as a condition to the
receipt of this Award.  After the Shares
vest pursuant to Section 3 hereof, and following payment of any applicable
withholding taxes pursuant to section 7 of this Agreement, the Company
shall, upon request of the Executive, cause to be issued a certificate or
certificates, registered in the name of Executive or in the name of Executive’s
legal representatives, beneficiaries or heirs, as the case may be, evidencing
such Vested Shares and shall cause such certificate or certificates to be
delivered to Executive or Executive’s legal representatives, beneficiaries or
heirs, as the case may be, free of the legend referenced above.

 

6.                                       Rights
as Shareholder.  Executive shall be entitled
at all times on and after the date of issuance of the Shares to exercise the
rights of a shareholder of Common Stock with respect to the Shares, including
the right to vote the Shares and the right to receive dividends on the Shares.

 

7.                                       Distributions
and Adjustments.  In accordance with Section 4(c)
of the Plan, the Award shall be subject to adjustment in the event that any
distribution, recapitalization, reorganization, merger or other event covered
by Section 4(c) of the Plan shall occur.

 

8.                                       Taxes.  In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction which may be
available to it in connection with this restricted stock award, and in order to
comply with all applicable federal or state tax laws or regulations, the
Company may take such action as it deems appropriate to insure that, if
necessary, all applicable federal or state income and social security taxes are
withheld or collected from Executive. 
Within 30 days after the date hereof, Executive may, at Executive’s
option, make and file with the Company and the Internal Revenue Service an
election relating to the Shares pursuant to Section 83(b) of the Code.

 

9.                                       Executive’s
Employment.  Nothing in this
Agreement shall confer upon Executive any right to continue in the employ of
the Company or any of its subsidiaries or interfere with the right of the
Company or its subsidiaries, as the case may be, to terminate Executive’s
employment or to increase or decrease Executive’s compensation at any time.

 

10.                                 Notices.  All notices, claims, certificates, requests,
demands, and other communications hereunder shall be in writing and shall be
deemed to have been duly given and delivered if personally delivered or if sent
by nationally recognized overnight courier, by

 

4

 

facsimile or by
registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:

 

(a)                                  If to the Company, to it at:

 

Curative Health
Services, Inc.

Executive Tower

61 Spit Brook Road

Nashua, NH 03060

Attention:  Paul F. McConnell, President and Chief
Executive Officer,

 

(b)                                 If to Executive, to her at:

 

Nancy F. Lanis

37 Longview Road

Port Washington,
NY 11050,

 

or

 

(c)                                  to such other address as the
party to whom notice is to be given may have furnished to the other party in
writing in accordance herewith.

 

Any such notice or communication shall be deemed to
have been received (i) in the case of personal delivery, on the date of such
delivery (or if such date is not a business day, on the next business day),
(ii) in the case of nationally-recognized overnight courier, on the next
business day after the date sent, (iii) in the case of facsimile transmission,
when received (or if not sent on a business day, on the next business day after
the date sent), and (iv) in the case of mailing, on the third business day
following the date on which the piece of mail containing such communication is
posted.

 

11.                                 Waiver
of Breach. The waiver by either party of a breach of any provision of this
Agreement must be in writing and shall not operate or be construed as a waiver
of any other or subsequent breach.

 

12.                                 Undertaking.  Both parties hereby agree to take whatever
additional actions and execute whatever additional documents either party may
in their reasonable judgment deem necessary or advisable in order to carry out
or effect one or more of the obligations or restrictions imposed on the other
party under the provisions of this Agreement.

 

13.                                 Plan
Provisions Control.  In the event that
any provision of the Agreement conflicts with or is inconsistent in any respect
with the terms of the Plan, the terms of the Plan shall control.

 

14.                                 Securities
Matters.  The Company shall not be
required to deliver Shares until the requirements of any federal or state
securities or other laws, rules or regulations (including the rules of any
securities exchange) as may be determined by the Company to be applicable are
satisfied.

 

5

 

15.                                 Remedies.  Both parties shall be entitled to enforce
their rights under this Agreement specifically, to recover damages and costs by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties agree and acknowledge that
money damages would not be an adequate remedy for certain breaches of the
provisions of this Agreement and that the either party may, in its sole
discretion, and without affecting any other rights it may have at law, apply to
any court of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or
prevent any violation of the provisions of this Agreement.

 

16.                                 Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York (without giving effect to principles of conflicts of laws).

 

17.                                 Counterparts.  This Agreement may be executed in one or more
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts together shall constitute but one agreement.

 

18.                                 Entire
Agreement.  This Agreement (and the
other writings incorporated by reference herein, including the Separation
Agreement and the General Release) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous written or oral negotiations, commitments, representations, and
agreements with respect thereto.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

 

 

	
   

  	
  CURATIVE HEALTH
  SERVICES, INC,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief Executive
  Officer and President

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Nancy F. Lanis

  
	
   

  	
  Dated:

  	
   

  	
   

  
						

 

6

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