Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
February 11, 2014 (the “Effective Date”), by and between Egalet Corporation, a
Delaware corporation (the “Company”) and Robert Radie (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ the Executive, and the Executive desires
to be employed by the Company, each upon the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and intending to be legally bound hereby, the Company and the Executive
agree as follows.

 

1.                                      Employment.  The Company hereby agrees
to employ the Executive, and the Executive hereby accepts employment by the
Company, for the period and upon the terms and conditions contained in this
Agreement.

 

2.                                      Term.  The Executive’s term of
employment with the Company under this Agreement shall begin on the Effective
Date and shall continue on an at-will basis until that employment ceases in
accordance with Section 6 for any reason (the “Term”).

 

3.                                      Office and Duties.

 

(a)                                 During the Term, the Executive shall serve
as the President and Chief Executive Officer of the Company, as well as in any
other position to which the Executive is appointed by the Company’s Board of
Directors (the “Board”).  The Executive shall report to the Board and and shall
perform such duties and have such responsibilities as the Board may determine
from time to time and which are consistent with Executive’s then current
position with the Company.

 

(b)                                 During the Term, the Company shall cause the
Executive to be elected or appointed to the Board and the Executive agrees to
serve in such capacity without additional compensation; provided however, that
during any period that the Company’s stock is publically traded, the Company’s
obligation under this Section will be limited to nominating the Executive to the
Board.

 

(c)                                  During the Term, the Executive shall devote
all of his working time, energy, skill and best efforts to the performance of
his duties hereunder in a manner that will faithfully and diligently further the
business and interests of the Company.

 

(d)                                 During the Term, the Executive shall not be
engaged in any business activity which, in the reasonable judgment of the Board,
conflicts with the Executive’s duties hereunder, whether or not such activity is
pursued for pecuniary advantage.  Should the Executive wish to provide any
services to any other person or entity other than the Company or

 

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to serve on the board of directors of any other entity or organization, the
Executive shall submit a written request to the Board for consideration and
approval by the Board in its sole discretion.

 

4.                                      Compensation.

 

(a)                                 For all of the services rendered by the
Executive hereunder during the Term, the Executive shall receive an annual base
salary of $410,000 (the “Base Salary”), payable in accordance with the Company’s
regular payroll practices in effect from time to time.  The Base Salary will be
reviewed on or about December 1, 2014 and annually thereafter by the Board to
determine if any increase is appropriate, and if Executive’s Base Salary is
increased, then the term “Base Salary” as used in this Agreement shall mean the
amount of the Executive’s Base Salary then in effect at the applicable time.

 

(b)                                 During the Term, the Executive shall be
eligible to receive an annual bonus (pro-rated for the first fiscal year of the
Term) with a target amount equal to 40% of the Base Salary (the “Annual Bonus”),
in accordance with the terms and conditions of the Annual Incentive Bonus Plan
attached hereto as Exhibit A, as amended from time to time.  Subject to the
Executive’s continued employment through the payment date (except as otherwise
provided in this Agreement), the Annual Bonus, if any, shall be paid to the
Executive on the date the Company pays bonuses to its executives generally for
the year to which such Annual Bonus relates.

 

(c)                                  During the Term, the Executive shall be
entitled to participate in the Company’s employee benefit plans, including
without limitation, any health, dental, vision and 401(k) plans maintained by
the Company, on the same terms and conditions as may from time to time be
applicable to the Company’s other executive officers, as such employee benefit
plans may be in place from time to time.

 

(d)                                 The Executive shall be entitled to a minimum
of twenty (20) days of vacation per year (prorated for any partial year worked),
in accordance with Company’s policy as in effect from time to time.  The
Executive shall also be entitled to sick days and paid holidays in accordance
with the Company’s policy as in effect from time to time.

 

(e)                                  During the Term, the Executive shall be
reimbursed by the Company for all necessary and reasonable expenses,
professional dues, continuing education fees including without limitation any
fees and expenses related to the maintenance of professional licenses, and
membership dues incurred by him in connection with the performance of his duties
hereunder.  The Executive shall keep an itemized account of such expenses,
together with vouchers and/or receipts verifying the same.  Any such expense
reimbursement will be made in accordance with the Company’s policies governing
reimbursement of expenses as are in effect from time to time.

 

(f)                                   All payments and benefits made pursuant to
this Agreement shall be subject to such withholding as the Company reasonably
believes is required by any applicable federal, state, local or foreign law.

 

5.                                      Representations of Executive.  The
Executive represents to the Company that (i) there are no restrictions,
agreements or understandings whatsoever to which the

 

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Executive is a party that would prevent, or make unlawful, his execution of this
Agreement and his employment hereunder; (ii) his execution of this Agreement and
his employment hereunder shall not constitute a breach of any contract,
agreement or understanding, oral or written, to which he is a party, or by which
he is bound, and (iii) he is of full capacity and free and able to execute this
Agreement and to enter into employment with the Company.

 

6.                                      Termination.  The Term shall continue
until the termination of the Executive’s employment with the Company as provided
below.

 

(a)                                 Death or Disability.  If the Executive dies
or becomes Disabled, the Term and the Executive’s employment with the Company
shall immediately terminate.  Upon such a termination of employment, the Company
shall

 

(i) pay to the Executive (or his estate, beneficiary or legal representative, as
the case may be), within thirty (30) days following such termination of
employment, all accrued but unpaid Base Salary and all accrued but unused
vacation;

(ii) reimburse the Executive (or his estate, beneficiary or legal
representative, as the case may be) for all reimbursable expenses that have not
been reimbursed as of such termination of employment, with such reimbursement to
occur in accordance with the procedures set forth in Section 4(e); and

 

(iii) pay the Executive any earned but unpaid annual bonus for the year
immediately preceding the year of termination at the time the Company pays
bonuses with respect to such year to its executives generally.

 

For purposes of this Agreement, “Disabled” means that in the opinion of a
qualified physician, mutually acceptable to the Company and the Executive, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, the Executive (x) is unable to engage in
any substantial gainful activity or (y) has been receiving income replacement
benefits for a period of not less than three (3) months under an accident and
health plan covering employees of the Company.  The termination of employment
described herein shall not affect the Executive’s right to continued eligibility
to disability benefits under the Company’s long-term disability coverage or
plan.

 

(b)                                 For Cause.  During the Term, the Company may
terminate the Executive’s employment for Cause upon written notice.  Upon such a
termination of employment, the Executive shall be entitled to only those
benefits described in clauses (i) and (ii) of Section 6(a).  For purposes of
this Agreement, “Cause” means

 

(i)                               a material breach of this Agreement by the
Executive that is not susceptible to remedy or cure, or if susceptible to remedy
or cure, is not remedied or cured to the satisfaction of the Board within ten
(10) business days following written notice from the Board to the Executive
specifying the manner in which the Executive has breached this Agreement and, if
applicable, the specific remedy or cure sought;

 

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(ii)                            the commission by the Executive of a felony or a
crime involving moral turpitude (whether or not related to the Executive’s
employment), or any other act or omission involving dishonesty or fraud with
respect to the Company or any of its affiliates or causing material harm to the
standing or reputation of the Company, or the Executive’s drug abuse or repeated
intoxication; or

 

(iii)                         the Executive’s failure to perform his duties
hereunder other than by reason of death or Disability, after written notice from
the Board specifying the manner in which the Executive has failed to perform his
duties and, if such failure is susceptible to cure, the failure of the Executive
to cure such non-performance to the satisfaction of the Board within ten
(10) business days following such written notice, including, if applicable, the
specific remedy or cure sought.

 

(c)                                  Without Cause.  During the Term, the
Company may terminate the Executive’s employment with the Company at any time
without Cause upon thirty (30) days’ prior written notice; provided, however,
that during such notice period, the Board, in its sole discretion, may relieve
the Executive of all of his duties, responsibilities and authority with respect
to the Company and may restrict Executive’s access to Company property;
provided, further, that the Board’s exercise of such discretion shall not
constitute Good Reason (as defined below).  Upon such a termination of
employment, the Company shall

 

(i)                                     provide the Executive with those
benefits described in clauses (i) and (ii) of Section 6(a);

 

(ii)                                  pay the Executive any earned but unpaid
annual bonus for the year immediately preceding the year of termination at the
time the Company pays bonuses with respect to such year to its executives
generally;

 

(iii)                               continue providing the Executive with Base
Salary for a period of 12 months following the date of such termination of
employment (the “Severance Period”), with such Base Salary to be paid in
accordance with the Company’s regular payroll practice as if no such termination
of employment had occurred; provided, however, that the Executive’s right to
receive the payments set forth in this clause (ii) of Section 6(c) shall be
conditioned on the Executive’s continued compliance with Sections 8 and 9 hereof
and such payments shall not begin until the Executive signs and does not
subsequently revoke a release of claims within sixty (60) days following such
termination of employment, in substantially the form attached hereto as
Exhibit B; provided, further, that if such sixty (60) day period spans two
calendar years, any payment set forth in this Section 6(c)(ii) that, but for
this proviso, would have been paid prior to the Company’s first payroll date in
such second calendar year, shall not be paid until such payroll date (but only
to the extent required to comply with Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”));

 

(iv)                              during the portion of the Severance Period
during which the Executive and the Executive’s eligible dependents are eligible
for COBRA coverage, reimburse the Executive and the Executive’s eligible
dependents for their COBRA premiums less any amounts that the Executive would
have been required to contribute for coverage under the Company’s health plans
had the Executive remained employed by the Company, with such reimbursement to
occur in accordance with the procedures set forth in Section 4(e); provided,

 

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however, that if, at any time during the Severance Period, the Executive and the
Executive’s eligible dependents cease to be eligible for COBRA coverage (except
as a result of Executive’s becoming eligible for coverage under the medical
plans of a subsequent employer), the Company shall reimburse the Executive all
reasonable premium costs incurred by the Executive to provide private health
insurance coverage for the Executive and the Executive’s eligible dependents
that is substantially equivalent to the health insurance by which the Executive
and the Executive’s eligible dependents were covered on the date of the
Executive’s termination less any amounts that the Executive would have been
required to contribute for such coverage had the Executive remained employed by
the Company, until the earlier of (x) the termination of the Severance Period
and (y) the date on which the Executive becomes eligible for coverage under the
medical plans of a subsequent employer; and

 

(v)                                 provide any stock-based compensation due to
the Executive pursuant to any written agreement between the Executive and the
Company, on the terms and conditions set forth therein.

 

(d)                                 Termination by Executive for Good Reason. 
During the Term, the Executive may resign his employment for Good Reason.  Upon
such a termination, the Executive shall be entitled to those benefits described
in Section 6(c) as though the Executive had been terminated by the Company
without Cause.  For purposes of this Agreement, “Good Reason” means the
occurrence of any of the following circumstances:

 

(i)                                     a material diminution of the Executive’s
authorities, duties, responsibilities or status (including offices, titles or
reporting relationships) as an employee of the Company from those then in effect
or the assignment to the Executive of duties or responsibilities inconsistent
with his then current position;

 

(ii)                                  the Company’s relocation of the
Executive’s principal job location or office that increases the Executive’s
one-way commute by more than fifty (50) miles; or

 

(iii)                               a reduction in the Executive’s Base Salary
or benefits (other than a reduction in benefits that applies to the Executive
and all other similarly positioned employees);

 

provided, that the events set forth in items (i), (ii) and (iii) of this
Section 6(d) occur without the Executive’s express written consent; and provided
further, that that no such occurrence of any of the events set forth in items
(i), (ii) and (iii) of this Section 6(d) shall constitute Good Reason unless the
Executive notifies the Company in writing of his intent to resign for Good
Reason within 30 days following the occurrence of such circumstance and the
Company fails to cure such circumstances within 30 days following receipt of
such notice.

 

(e)                                  Termination by Executive without Good
Reason.  During the Term, the Executive may resign his employment without Good
Reason upon ninety (90) days prior written notice.  Upon such a termination of
employment, the Executive shall be entitled to only those benefits described in
clauses (i) and (ii) of Section 6(a).

 

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(f)                                   Termination by the Company without Cause
or by the Executive for Good Reason within 24 Months after a Change in Control. 
Notwithstanding anything herein to the contrary, if, during the Term, the
Executive’s employment is terminated by the Company without Cause or by the
Executive for Good Reason, in each case, within 24 months after a Change in
Control, the Executive shall be entitled to those benefits described in
Section 6(c); provided that for purposes of applying clauses (ii) and (iii) of
Section 6(c), “Severance Period” shall be a period of 24 months following the
date of such termination of employment.

 

For purposes of this Agreement, “Change in Control” means, after the Effective
Date (and not including the initial public offering of the Company, which shall
not be treated as a Change in Control for purposes of this Agreement), any of
the following events: (A) a “person” (as such term in used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13D-3 under the 1934 Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the combined voting
power of the Company’s then outstanding securities; (B) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in clauses (A), (C) or (D) hereof) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously approved, cease for any reason to constitute a majority thereof;
(C) the Company merges or consolidates with any other corporation, other than in
a merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (D) the complete liquidation
of the Company or the sale or other disposition of all or substantially all of
the Company’s assets; provided that no event shall constitute a Change in
Control hereunder unless such event is also a “change in control event” as
defined in Section 409A of the Code.

 

(g)                                  Any severance or termination pay granted in
this Section 6 will be the sole and exclusive remedy, compensation or benefit
due to the Executive or his estate upon any termination of the Executive’s
employment (without limiting the Executive’s rights under any disability, life
insurance or deferred compensation arrangement in which the Executive
participates at the time of such termination of employment).

 

7.                                      Certain Company Remedies.  The Executive
acknowledges that his promised services and covenants, including without
limitation the covenants in Sections 8 and 9 hereof, are of a special and unique
character, which give them peculiar value, the loss of which cannot be
reasonably or adequately compensated for in an action at law, and that, in the
event there is a breach hereof by the Executive, the Company will suffer
irreparable harm, the amount of which will be impossible to ascertain. 
Accordingly, the Company shall be entitled, if it so

 

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elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, to obtain damages for any breach of
this Agreement, or to enjoin the Executive from committing any act in breach of
this Agreement.  The remedies granted to the Company in this Agreement are
cumulative and are in addition to remedies otherwise available to the Company at
law or in equity.  If the Executive violates any of the restrictions contained
in this Agreement, the restrictive period shall not run in favor of the
Executive from the time of commencement of any such violation until such time as
such violation shall be cured by the Executive to the satisfaction of the
Company.

 

8.                                      Restrictive Covenants.

 

(a)                                 Confidentiality.  During the Term and at all
times thereafter, the Executive shall, and shall cause his or her affiliates and
representatives to keep confidential and not disclose to any other person or
entity or use for his own benefit or the benefit of any other person or entity
any confidential proprietary information, technology, know-how, trade secrets
(including all results of research and development), product formulas,
industrial designs, franchises, inventions or other intellectual property
regarding the Company or its business and operations (“Confidential
Information”) in his possession or control.  The obligations of the Executive
under this Section 8(a) shall not apply to Confidential Information which (i) is
or becomes generally available to the public without breach of the commitment
provided for in this Section; (ii) is required to be disclosed by law, order or
governmental authority; (iii) information that is independently developed by the
Executive after termination of all employment with the Company or its
affiliates, without the use of or reliance on any Confidential Information and
(iv) information which becomes known to the Executive after termination of all
employment with the Company or its affiliates, on a non-confidential basis from
a third-party source if such source was not subject to any confidentiality
obligation; provided, however, that, in case of clause (ii), the Executive shall
notify the Company as early as reasonably practicable prior to disclosure to
allow the Company or its affiliates to take appropriate measures to preserve the
confidentiality of such Confidential Information.  During the Term and at all
times thereafter, the Executive shall, and shall cause his affiliates and his
representatives to, keep confidential and not disclose to any other person or
entity any of the terms of this Agreement, except as required by applicable law,
in connection with the enforcement by the Executive of his rights hereunder.

 

(b)                                 Non-Competition; Non-Solicitation.

 

(i)                               During the period beginning on the Effective
Date and ending 12 months following the date on which the Executive’s employment
with the Company is terminated for any reason (the “Non-Compete Period”), the
Executive covenants and agrees not to, and shall cause his affiliates not to,
directly or indirectly anywhere in the world, conduct, manage, operate, engage
in or have an ownership interest in any business or enterprise that
(A) manufactures, sells, distributes or develops abuse deterrent orally
delivered pharmaceuticals, (B) uses any trademarks, tradenames or slogans
similar to those of the Company or its affiliates; or (C) is engaged in any
other activities that are otherwise competitive with the business of the Company
or its affiliates as conducted or proposed to be conducted as of the termination
date (collectively, the “Business”).  Notwithstanding anything herein to the
contrary, if the Executive’s employment with the Company is terminated by the
Company without Cause or by the Executive for Good Reason, in each case, within
24 months following a Change in Control,

 

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the Non-Compete Period shall be a period of 24 months.  Notwithstanding the
foregoing, nothing herein shall preclude the Executive from performing any
duties as a stockholder, director, employee, consultant or agent of Company or
its affiliates or owning, directly or indirectly, in the aggregate less than 5%
of any business competitive with the Company or its affiliates that is subject
to the reporting obligations of the 1934 Act.

 

(ii)                            During the Non-Compete Period, the Executive
shall not, and shall cause his affiliates to not, directly or indirectly,
call-on, solicit or induce any customer or other business relationship of the
Company or its affiliates for the provision of products or services related to
the business of the Company or in any other manner that would otherwise
interfere with the business relationship between the Company and its affiliates 
and their respective customers and other business relationships.

 

(iii)                         During the Non-Compete Period, the Executive shall
not, and shall cause his affiliates to not, directly or indirectly, call-on,
solicit or induce, any employee of the Company or its affiliates to leave the
employ of, or terminate its relationship with, the Company or its affiliates for
any reason whatsoever, nor shall the Executive offer or provide employment
(whether such employment is for the Executive or any other business or
enterprise), either on a full-time, part-time or consulting basis, to any person
who then currently is, or within six (6) months immediately prior thereto was,
an employee or independent contractor of the Company; provided, however, the
foregoing shall not prohibit a general solicitation to the public through
general advertising or similar methods of solicitation not specifically directed
at employees of the Company.

 

(iv)                        The Executive acknowledges and agrees that the
provisions of this Section 8 are reasonable and necessary to protect the
legitimate business interests of the Company and its affiliates.  The Executive
shall not contest that the Company’s and the Company’s affiliates’ remedies at
law for any breach or threat of breach by the Executive or any of his or her
affiliates of the provisions of this Section 8 will be inadequate, and that the
Company and its affiliates shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Section 8 and to enforce specifically
such terms and provisions, in addition to any other remedy to which the Company
or its affiliates may be entitled at law or equity.  The restrictive covenants
contained in this Section 8 are covenants independent of any other provision of
this Agreement or any other agreement between the parties hereunder and the
existence of any claim which the Executive may allege against the Company under
any other provision of this Agreement or any other agreement will not prevent
the enforcement of these covenants.

 

(v)                           The Executive expressly acknowledges that the
covenants contained in this Section 8(b) are a material part of the
consideration bargained for by the Company and, without the agreement of the
Executive to be bound by such covenants, the Company would not have agreed to
enter into this Agreement.

 

(vi)                        If any of the provisions contained in this
Section 8(b) shall for any reason be held to be excessively broad as to
duration, scope, activity or subject, then such provision shall be construed by
limiting and reducing it, so as to be valid and enforceable to the

 

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maximum extent compatible with the applicable law or the determination by a
court of competent jurisdiction.

 

9.                                      Intellectual Property; Company Property.

 

(a)                                 Inventions Retained and Licensed.  The
Executive has attached hereto, as Exhibit C, a list describing any inventions,
original works of authorship, developments, improvements, and trade secrets
which were made by the Executive prior to the Effective Date (collectively
referred to as “Prior Inventions”) which belong to the Executive, which relate
to the Company’s products or research and developments and which are not
assigned to the Company hereunder; or, if no such Prior Inventions are listed,
the Executive represents that there are no such Prior Inventions.  The Executive
agrees that he will not incorporate, or permit to be incorporated, any Prior
Invention owned by the Executive or in which the Executive has an interest into
a Company product, process or machine without the Company’s prior written
consent.  Notwithstanding the foregoing sentence, if, in the course of his
employment with the Company, the Executive incorporates into a Company product,
process or machine a Prior Invention owned by the Executive or in which the
Executive has an interest, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make,
have made, modify, use and sell such Prior Invention as part of or in connection
with such product, process or machine.

 

(b)                                 Assignment of Inventions.  The Executive
agrees that he will promptly make full written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and does hereby
assign to the Company, or its designee, all right, title, and interest in and to
any and all inventions, original works of authorship, developments, concepts,
improvements, designs, discoveries, ideas, trademarks or trade secrets, whether
or not patentable or capable of registration under copyright or similar laws,
which the Executive may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during
the time the Executive is in the employ of the Company (collectively referred to
as “Inventions”) except as provided in Section 9(e).  The Executive further
acknowledges that all original works of authorship which are made by him (solely
or jointly with others) within the scope of and during the period of his
employment with the Company and which are protectable by copyright are “works
made for hire” as that term is defined in the United States Copyright Act.  The
Executive understands and agrees that the decision whether or not to
commercialize or market any Invention developed by him solely or jointly with
others is within the Company’s sole discretion and for the Company’s sole
benefit and that no royalty will be due to the Executive as a result of the
Company’s efforts to commercialize or market any such Invention.

 

(c)                                  Maintenance of Records.  The Executive
agrees to keep and maintain adequate and current written records of all
Inventions made by him (solely or jointly with others) during the Term.  The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company.  The records will be available to and
remain the sole property of the Company at all times.

 

(d)                                 Patent and Copyright Registrations.  The
Executive agrees to assist the Company, or its designee, at the Company’s
expense, in every proper way to secure the

 

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Company’s rights in the Inventions and any copyrights, patents, mask work rights
or other intellectual property rights relating thereto in any and all countries,
including, but not limited to, the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto.  The Executive further agrees that his obligation to execute
or cause to be executed, when it is in his power to do so, any such instrument
or papers shall continue after the termination of the Term.  If the Company is
unable because of the Executive’s mental or physical incapacity or for any other
reason to secure the Executive’s signature to apply for or to pursue any
application for any United States or foreign patents or copyright registrations
covering Inventions or original works of authorship assigned to the Company as
above, then the Executive hereby irrevocably designates and appoints the Company
and its duly authorized officers and agents as the Executive’s agent and
attorney in fact, to act for and on the Executive’s behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by the
Executive.

 

(e)                                  Exception to Assignments.  The Executive
understands that the provisions of this Agreement requiring assignment of
Inventions to the Company shall not apply to any Invention that the Executive
has developed entirely on his own time without using the Company’s equipment,
supplies, facilities, trade secret information or Confidential Information
except for those Inventions that either (i) relate at the time of conception or
reduction to practice of the Invention to the Company’s business, or actual or
demonstrably anticipated research or development of the Company or (ii) result
from any work that the Executive performed for the Company.  The Executive will
advise the Company promptly in writing of any Inventions that the Executive
believes meet the foregoing criteria and not otherwise disclosed on Exhibit C.

 

(f)                                   Upon the termination of his employment for
any reason, the Executive shall deliver to the Company all memoranda, books,
papers, letters, and other data, and all copies of the same, which were made by
the Executive or otherwise came into his possession or under his control at any
time prior to the termination of this Agreement, and which in any way relate to
the business of the Company as conducted or as planned to be conducted on the
date of the termination.

 

10.                               Survival of Representations.  The provisions
of Sections 7, 8 and 9 shall survive the termination, for any reason, of the
Executive’s employment with the Company or of this Agreement.

 

11.                               Key Person Insurance.  If the Company wishes
to purchase a life insurance policy on the Executive or other insurance policy
relating to the loss of the Executive’s services, the Executive agrees to submit
to a customary insurance medical examination, if necessary, and otherwise
cooperate with the Company in any reasonable manner with respect to obtaining
any such insurance policy.

 

10

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12.          Miscellaneous.

 

(a)           Neither the failure, nor any delay, on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same, or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

 

(b)           This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation,
provisions concerning limitations of actions), shall be governed by and
construed in accordance with the laws of the State of Delaware (notwithstanding
any conflict-of-laws doctrines of such state or other jurisdiction to the
contrary), and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.

 

(c)           This Agreement is intended to comply with Code Section 409A, and
the parties hereto agree to interpret, apply and administer this Agreement in
the least restrictive manner necessary to comply therewith and without resulting
in any increase in the amounts owed hereunder by the Company.  If the
Executive’s termination of employment hereunder does not constitute a
“separation from service” within the meaning of Code Section 409A, then any
amounts payable hereunder on account of a termination of the Executive’s
employment and which are subject to Code Section 409A shall not be paid until
the Executive has experienced a “separation from service” within the meaning of
Code Section 409A.  If, and only if, the Executive is a “specified employee” (as
defined in Code Section 409A) and a payment or benefit provided for in this
Agreement would be subject to additional tax under Code Section 409A if such
payment or benefit is paid within six (6) months after the Executive’s
separation from service, then such payment or benefit shall not be paid (or
commence) during the six-month period immediately following the Executive’s
separation from service except as provided in the immediately following
sentence. In such an event, any payment or benefits that otherwise would have
been made or provided during such six-month period and that would have incurred
such additional tax under Code Section 409A shall instead be paid to the
Executive in a lump-sum cash payment on the first day following the termination
of such six-month period or, if earlier, within ten (10) days following the date
of the Executive’s death.  No reimbursement or in-kind benefit shall be subject
to liquidation or exchange for another benefit and the amount available for
reimbursement, or in-kind benefits provided, during any calendar year shall not
affect the amount available for reimbursement, or in-kind benefits to be
provided, in a subsequent calendar year.  Any reimbursement to which the
Executive is entitled hereunder shall be made no later than the last day of the
calendar year following the calendar year in which such expenses were incurred. 
Each payment hereunder shall be treated as a separate payment in a series of
separate payments pursuant to Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

(d)           All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and shall be deemed to
have been duly given, made and received only when delivered (personally, by
courier service such as Federal

 

11

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Express, or by other messenger), when sent by facsimile transmission (with
electronic confirmation of receipt) or three (3) days after deposit in the
United States mails, registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

 

If to the Executive: the Executive’s home address on record with the Company.

 

If to the Company:

 

Egalet Corporation

101 Lindenwood Drive

Malvern, PA  19355
Attention:

 

Any party may alter the addresses to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.

 

(e)         The rights and obligations of both parties under this Agreement
shall inure to the benefit of and shall be binding upon their heirs, successors
and assigns, but shall not be assigned without the written consent of both
parties; provided, however, that the Company may make such an assignment in
connection with a sale of substantially all of the assets or other change of
control of the Company.

 

(f)          This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument.  This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.

 

(g)         The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other provision or
provisions may be invalid or unenforceable in whole or in part.

 

(h)         This Agreement contains the entire understanding among the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, between the parties hereto except as herein
contained (including without limitation any prior employment agreements between
the parties hereto).  The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof.  This Agreement may not be modified or amended other than by an
agreement in writing.

 

(i)          The section headings in this Agreement are for convenience only,
form no part of this Agreement and shall not affect its interpretation.

 

(j)          Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
indicates is appropriate.

 

12

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

 

 

 

EGALET CORPORATION

 

 

 

 

 

By:

/s/ Stan Musial

 

 

Name:

Stan Musial

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Robert Radie

 

 

Robert Radie

 

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EXHIBIT A

 

ANNUAL INCENTIVE BONUS PLAN

 

Previously filed as Exhibit 10.2 to the Company’s Registration Statement on Form
S-1 filed November 14, 2013 (File No. 333-191759)

 

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EXHIBIT B

 

RELEASE OF CLAIMS

 

This RELEASE OF CLAIMS (this “Release”) is given on this        day of
              , 20     by Robert S. Radie (the “Executive”).

 

WHEREAS, the Executive’s employment with Egalet Corporation, a Delaware
corporation, (the “Company”), has terminated; and

 

WHEREAS, pursuant to Section 6(c) of the Employment Agreement by and between the
Company and the Executive dated as of November 11, 2013 (the “Employment
Agreement”), the Company has agreed to pay the Executive certain amounts and to
provide certain benefits, subject to his execution and non-revocation of this
Release.  All terms used but not defined herein shall have the meanings ascribed
to such terms in the Employment Agreement.

 

NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound hereby, the Executive agrees
as follows:

 

1.             Consideration.  The Executive acknowledges that: (i) the payments
set forth in Section 6(c) of the Employment Agreement constitute full settlement
of all his rights under the Employment Agreement, (ii) he has no entitlement
under any other severance or similar arrangement maintained by the Company or
any of its Affiliates, and (iii) except as otherwise provided specifically in
this Release, the Company does not and will not have any other liability or
obligation to the Executive by reason of the cessation of his employment.  The
Executive further acknowledges that, in the absence of his execution of this
Release, the payments and benefits specified in Section 6(c)(iii) of the
Employment Agreement would not otherwise be due to him.

 

2.            Executive’s Release.  The Executive on his own behalf and together
with his heirs, assigns, executors, agents and representatives hereby generally
releases and discharges the Company and its predecessors, successors (by merger
or otherwise), parents, subsidiaries, affiliates and assigns, together with each
and every of their present, past and future officers, managers, directors,
shareholders, members, general partners, limited partners, employees and agents
and the heirs and executors of same, and all other persons or entities who/that
might be claimed to be jointly or severally liable with any of the persons or
entities named previously (herein collectively referred to as the “Releasees”)
from any and all suits, causes of action, complaints, obligations, demands,
common law or statutory claims of any kind, whether in law or in equity, direct
or indirect, known or unknown (hereinafter “Claims”), which the Executive ever
had, now has or may have against the Releasees, or any one of them arising at
any time up to and including the date of the this Release.  This Release
specifically includes, but is not limited to:

 

b.             any and all Claims arising out of or relating to the Executive’s
employment with the Company or the termination thereof;

 

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c.             any and all Claims for wages and benefits including, without
limitation, salary, stock options, stock, royalties, license fees, health and
welfare benefits, severance pay, vacation pay, and bonuses;

 

d.             any and all Claims for wrongful discharge, breach of contract,
whether express or implied, and Claims for breach of implied covenants of good
faith and fair dealing;

 

e.             any and all Claims for alleged employment discrimination on the
basis of race, color, religion, sex, age, national origin, veteran status,
disability, handicap or any other protected characteristic, or retaliation in
violation of any federal, state or local statute, ordinance, judicial precedent
or executive order, including but not limited to claims for discrimination or
retaliation under the following statutes: Title VII of the Civil Rights Act of
1964, 42 U.S.C. §2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. §1981;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as
amended, 29 U.S.C. §621 et seq.; the Older Workers Benefit Protection Act 29
U.S.C. §§ 623, 626 and 630; the Rehabilitation Act of 1972, as amended, 29
U.S.C. §701 et seq.; the Americans with Disabilities Act, 42 U.S.C. §12101 et
seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. §2601, et seq.; the
Fair Labor Standards Act, as amended, 29 U.S.C. §201, et seq.; the Fair Credit
Reporting Act, as amended, 15 U.S.C. §1681, et seq.;  and the Employee
Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1000, et seq.
(“ERISA”) or any comparable state statute or local ordinance;

 

f.             any and all Claims under any federal or state statute relating to
employee benefits or pensions;

 

g.             any and all Claims in tort, including but not limited to, any
Claims for assault, battery, misrepresentation, defamation, interference with
contract or prospective economic advantage, intentional or negligent infliction
of emotional distress, duress, loss of consortium, invasion of privacy and
negligence; and

 

h.             any and all Claims for attorneys’ fees and costs.

 

The Executive expressly represents that he has not filed a lawsuit or initiated
any other administrative proceeding against any Releasee.  The Executive further
promises not to initiate a lawsuit or to bring any other Claim against any
Releasee asserting a Claim that is released by this Release.  If he does so, and
the action is found to be barred in whole or in part by this Release, the
Executive agrees to pay the attorneys’ fees and costs, or the proportions
thereof, incurred by the applicable Releasee in defending against those Claims
that are found to be barred by this Release.  This Release will not prevent the
Executive from filing a charge with the Equal Employment Opportunity Commission
(or similar state agency) or participating in any investigation conducted by the
Equal Employment Opportunity Commission (or similar state agency); provided,
however, that any claims by the Executive for personal relief in connection with
such a charge or investigation (such as reinstatement or monetary damages) would
be barred.  Furthermore, nothing in this Release precludes the Executive from
challenging the validity of this Release under the requirements of the Age
Discrimination in Employment Act, and the Executive shall not be responsible for
reimbursing the attorneys’ fees and costs of the Releasees in connection with
such a challenge to the validity of the Release.  The Executive acknowledges,
however, that the Release applies to all Claims that he has under the Age
Discrimination in Employment Act, and that, unless the Release is held to be
invalid, all of the

 

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Executive’s Claims under the Age Discrimination in Employment Act shall be
extinguished by execution of this Release.

 

3.            Acknowledgment.  The Executive understands that the release of
Claims contained in this Release extends to all of the aforementioned Claims and
potential Claims which arose on or before the date that the Executive signs this
Release, whether now known or unknown, suspected or unsuspected, and that this
constitutes an essential term of this Release.  The Executive further
understands and acknowledges the significance and consequences of this Release
and of each specific release and waiver, and expressly consents that this
Release shall be given full force and effect to each and all of its express
terms and provisions, including those relating to unknown and uncompensated
Claims, if any, as well as those relating to any other Claims specified herein. 
The Executive hereby waives any right or Claim that the Executive may have to
employment, reinstatement or re-employment with the Company.

 

4.            Remedies.  All remedies at law or in equity shall be available to
the Releasees for the enforcement of this Release.  This Release may be pleaded
as a full bar to the enforcement of any Claim released by this Release that the
Executive may assert against the Releasees.

 

5.            No Admission of Liability.  This Release is not to be construed as
an admission of any violation of any federal, state or local statute, ordinance
or regulation or of any duty owed by the Company to the Executive.  The
Executive acknowledges that the Company specifically denies any such violations.

 

6.            Severability.  If any term or provision of this Release shall be
held to be invalid or unenforceable for any reason, then such term or provision
shall be ineffective to the extent of such invalidity or unenforceability
without invalidating the remaining terms or provisions hereof, and such term or
provision shall be deemed modified to the extent necessary to make it
enforceable.

 

7.            Advice of Counsel; Revocation Period.  The Executive is hereby
advised to seek the advice of counsel prior to signing this Release.  The
Executive hereby acknowledges that the Executive is acting of his own free will,
that he has been afforded a reasonable time to read and review the terms of this
Release, and that he is voluntarily executing this Release with full knowledge
of its provisions and effects.  The Executive further acknowledges that he has
been given at least
                                                                days within
which to consider this Release and that he has SEVEN (7) days following his
execution of this Release to revoke his acceptance, with this Release not
becoming effective until the 7-day revocation period has expired.  If the
Executive elects to revoke his acceptance of this Release, this Release shall
not become effective and Executive must provide written notice of such
revocation by certified mail (postmarked no later than seven days after the date
the Executive accepted this Release) to:

 

Egalet Corporation

101 Lindenwood Drive

Malvern, PA  19355
Attention:

 

8.            Representations and Warranties.  The Executive represents and
warrants that he has not assigned any claim that he purports to release
hereunder and that he has the full power

 

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and authority to enter into this Release and bind each of the persons and
entities that the Executive purports to bind.  The Executive further represents
and warrants that he is bound by, and agrees to be bound by, his post-employment
obligations set forth in the Restrictive Covenant Agreement.

 

9.            Governing Law.  This Agreement shall be governed by the laws of
the State of Delaware without regard to the conflict of law principles of any
jurisdiction. Any legal proceeding arising out of or relating to this Release
will be instituted in a state or federal court in the State of Delaware, and the
Executive hereby consents to the personal and exclusive jurisdiction of such
court(s) and hereby waives any objection(s) that he may have to personal
jurisdiction, the laying of venue of any such proceeding and any claim or
defense of inconvenient forum.

 

IN WITNESS WHEREOF, the Executive has executed this Release on the date first
above written.

 

 

 

 

 

Robert S. Radie

 

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EXHIBIT C

 

Proprietary/Confidentiality Schedules

 

None.

 

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