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May 10, 2020

Via Email

Jeffrey A. Bailey
P.O. Box 180
Melvin Village, NH 03850

Re: Offer of Employment

Dear Jeffrey:
BioDelivery Sciences International, Inc. (the “Company”) is pleased to extend
you an offer of employment as the Interim Chief Executive Officer (“CEO”),
reporting to the Board of Directors of the Company (the “Board”), effective May
11, 2020 (the “Effective Date”) and continuing for up to six (6) months from the
Effective Date, unless your employment is sooner terminated by you or the Board
(the “Term”); provided that you and the Board may mutually agree to extend the
Term and your employment on the terms and conditions contained herein or on such
new terms and conditions that may be negotiated at such time. The initial terms
and conditions of your employment, should you accept this offer, are set forth
below.
1.Position. As the Interim CEO, you shall have such powers and duties as may
from time to time be prescribed by the Board, which shall include, without
limitation, working to identify possible CEO candidates and facilitate the hire
of a new CEO (the “New CEO”). In addition, you shall continue to serve as member
of the Board during the Term, provided, however, that you shall, upon request of
the Board, recuse yourself from any discussions of your employment. During the
Term, you shall devote your full working time and efforts to the business and
affairs of the Company. Notwithstanding the foregoing, you may continue to
engage in the outside activities listed on Exhibit A, and any additional board
seats which have been approved by the Board, as long as such activities do not
interfere with the performance of your duties to the Company. In addition, you
may engage in religious, charitable or other community activities as long as
such services and activities are disclosed to the Board and do not interfere
with the performance of your duties to the Company.
2.Salary. During the Term, the Company will pay you a base salary at the rate of
$600,000 per year, payable in accordance with the Company’s standard payroll
schedule and subject to applicable deductions and withholdings (the “Base
Salary”). As is standard, while being compensated for the Interim CEO role, any
cash compensation for your role as a member of the Board will be suspended until
the end of the Term, at which point your employment with the Company will end
and the cash board compensation will resume, subject to the terms of Section 9
below.
3.Bonus. You will be eligible for a one-time bonus in the amount of $180,000,
less applicable deductions and withholdings (the “Bonus”). To earn any portion
of the Bonus, (i) the New CEO must commence employment and (ii) you must
continue to have a service relationship with the Company on
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the date of payment. To the extent earned, 50% of the Bonus will be paid at the
time that annual executive bonuses are paid, and 50% of the Bonus will be paid,
subject to the Board’s determination of the New CEO’s satisfactory performance
during such CEO’s first six months; such review to be completed by the Board
after such six month period.
4.Equity. Subject to approval by the Board, you will receive an option to
purchase 160,000 shares of the Company’s common stock (“Performance-Based
Options”) and a grant of 40,000 restricted stock units (“Time-Based RSUs”). The
exercise price per share for Performance-Based Options will be equal to the
volume-weighted average price of the Company’s common stock for the 30-day
period preceding the Effective Date. The Performance-Based Options and the
Time-Based RSUs will be subject to the following vesting schedule:
(i) (A) up to 50% of the Performance-Based Options will vest following the
Board’s year-end review of your performance as CEO in 2020, and (B) up to 50% of
the Time-Based RSUs will vest on the first anniversary of the Effective Date;
and
(ii) (A) up to 50% of the Performance-Based Options will vest subject to the
Board’s determination of the New CEO’s satisfactory performance during such
CEO’s first six months, such review to be completed by the Board after such six
month period, and (B) up to 50% of the Time-Based RSUs will vest on the second
anniversary of the Effective Date.
provided that, in both (i) and (ii), the Board shall determine the actual
percentage of vesting, if any, that shall occur; provided further, that you must
continue to have a service relationship with the Company on each such vesting
date. The Performance-Based Options and the Time-Based RSUs shall be subject to
the terms and conditions applicable to equity awards granted under the Company’s
2019 Stock Option and Incentive Plan, as amended from time to time (the “Plan”),
as described therein and in the equity award agreements to be executed by you
and the Company to evidence the grant of the Performance-Based Options and the
Time-Based RSUs. For the avoidance of doubt, nothing herein affects your
existing equity awards with the Company, which shall remain in full force and
effect, subject to the terms of the Plan and the applicable equity awards
(collectively, the “Equity Documents”).
5.Benefits. During the Term, you will be eligible, subject to the terms of the
applicable plans and programs, to participate in the employee benefits and
insurance programs generally made available to the Company’s executive officers.
Details of such benefits programs, including mandatory employee contributions,
if any, and waiting periods, if applicable, will be made available to you when
such benefit(s) become available. Notwithstanding the foregoing, you will not be
eligible to accrue any vacation days during the Term. The Company reserves the
right to modify, amend or cancel any of its benefits plans or programs at any
time.
6.Business Expenses. You shall be entitled to receive prompt reimbursement for
all reasonable expenses that you incur during the Term in performing services
hereunder, in accordance with the policies and procedures then in effect and
established by the Company for its executive officers.
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7.Location. You will be permitted to work remotely from your home office in New
Hampshire, provided that, once regular business travel (which has been
temporarily suspended due to the COVID-19 pandemic) resumes, you are expected to
be at the Company’s Raleigh, NC office as is reasonably necessary to perform the
duties of Interim CEO and you may be required to travel elsewhere for business
from time to time, consistent with the Company’s business needs. Prior to
regular business travel resuming, you agree to make reasonable efforts to be at
the Company’s Raleigh, NC office if the Company deems such travel to be
essential.
8.At-will Employment. At all times your employment is “at will,” meaning you or
the Company may terminate it at any time for any or no reason. Although your job
duties, title, reporting structure, compensation and benefits, as well as the
Company’s benefit plans and personnel policies and procedures, may change from
time to time, the “at will” nature of your employment may only be changed in an
express written agreement signed by you and a duly authorized member of the
Board (excluding yourself). Your last day of employment is referred to herein as
the “Date of Termination.” In the event of the ending of your employment for any
reason, the Company shall pay you (i) your Base Salary through the Date of
Termination, and (ii) the amount of any documented expenses properly incurred by
you on behalf of the Company prior to any such termination and not yet
reimbursed (the “Accrued Obligations”). Other than the Accrued Obligations, you
will not be entitled to any compensation from the Company in connection with the
ending of your employment.
9.Continued Board Service. During and after the Term, you will continue to serve
as a member of the Board, subject to the Company and its stockholders’ removal
rights and your resignation rights, and you are required to continue to fulfill
your duties as a member of the Board, including, without limitation, attending
scheduled Board meetings in person or by telephone, as applicable. As a member
of the Board, you will continue to be covered by the Company’s directors and
officers insurance policy consistent with the terms of coverage provided to
other members of the Board. As stated above, during the Term, your cash
compensation from the Company will be limited to the Base Salary and other
compensation terms set forth in this letter agreement, and you will not be
eligible for any annual cash retainer in connection with your Board service,
provided, however, that you will remain eligible during the Term to receive an
annual equity award pursuant to the Director Remuneration Policy (the
“Compensation Policy”) and any previously granted equity awards will continue to
vest in accordance with the Equity Documents. After the Term, provided that you
continue to serve as a member of the Board, your service to the Company will be
compensated in accordance with the Compensation Policy then in effect.
10.Confidential Information and Restricted Activities. You also will be required
to sign, as a condition of your employment, an Employee Confidentiality,
Assignment and Nonsolicitation Agreement, a copy of which is enclosed with this
letter agreement (the “Restrictive Covenants Agreement”). The obligations under
the Restrictive Covenants Agreement are supplemental to, and not in lieu of,
your existing confidentiality obligations with respect to your role as a member
of the Board. This offer is conditioned on your representation that you are not
subject to any confidentiality, noncompetition, nonsolicitation, invention
assignment or other agreement that restricts your employment activities or that
may affect your ability to devote full time and attention to your work at the
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Company. If you have entered into any agreement that may restrict your
activities on behalf of the Company, please provide me with a copy of the
agreement as soon as possible. You further represent that you have not used and
will not use or disclose any trade secret or other proprietary right of any
previous employer or any other party.
11.Taxes. All forms of compensation referred to in this letter agreement are
subject to reduction to reflect applicable withholding and payroll taxes and
other deductions required by law. You hereby acknowledge that the Company does
not have a duty to design its compensation policies in a manner that minimizes
your tax liabilities, and you will not make any claim against the Company or the
Board related to tax liabilities arising from your compensation.
12.Interpretation and Enforcement. This letter agreement, together with the
Restrictive Covenants Agreement, constitutes the complete agreement between you
and the Company, contains all of the terms of your employment with the Company
and supersedes any prior agreements, representations or understandings (whether
written, oral or implied) between you and the Company; provided, however, and
notwithstanding the foregoing, the Equity Documents and any indemnification
agreement between you and the Company shall remain in full force and effect. The
terms of this letter agreement and the resolution of any disputes as to the
meaning, effect, performance or validity of this letter agreement or arising out
of, related to, or in any way connected with this letter agreement, your
employment with the Company or any other relationship between you and the
Company (the “Disputes”) will be governed by Massachusetts law, excluding laws
relating to conflicts or choice of law. You and the Company submit to the
exclusive personal jurisdiction of the federal and state courts located in the
Commonwealth of Massachusetts in connection with any Dispute or any claim
related to any Dispute.
13.Assignment. Neither you nor the Company may make any assignment of this
letter agreement or any interest in it, by operation of law or otherwise,
without the prior written consent of the other; provided, however, that the
Company may assign its rights and obligations under this letter agreement
without your consent to any affiliate or to any person or entity with whom the
Company shall hereafter effect a reorganization, consolidate with, or merge into
or to whom it transfers all or substantially all of its properties or assets.
This letter agreement shall inure to the benefit of and be binding upon you and
the Company, and each of your and its respective successors, executors,
administrators, heirs and permitted assigns.
14.Other Terms. By signing this letter agreement, you represent to the Company
that you have no contractual commitments or other legal obligations that would
or may prohibit you from performing your duties for the Company. As with any
employee, you must submit satisfactory proof of your identity and your legal
authorization to work in the United States.
[Signature page follows.]
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We are excited about your willingness to serve as the Interim CEO and look
forward to continuing to work with you. You may indicate your agreement with
these terms by signing and dating this letter agreement, together with the
signed Restrictive Covenants Agreement, and returning them both to me. If you
have any questions please do not hesitate to contact me.
Very truly yours,
BIODELIVERY SCIENCES INTERNATIONAL, Inc.
         
By: Peter Greenleaf
Title: Chairman of the Board
Enclosure: Restrictive Covenants Agreement
I have read and accept this offer:
           
By: Jeffrey A. Bailey
Dated:  

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Exhibit A
•Aileron Therapeutics, Inc – Board of Directors
•Madison Vaccines, Inc – Board of Directors
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