bdsi1031coelhoamendment






ACTIVE/105325905.2          November 3, 2020    Terry Coelho  8904 Woodhall Lake Drive  Waxhaw, NC 28173    Re: First Amendment to Offer Letter    Dear Terry:     As we have discussed, this First Amendment to Offer Letter (the “Amendment”)  confirms the agreement between you and BioDelivery Sciences International, Inc. (“BDSI” or  the “Company”) to amend that certain letter agreement regarding employment between you and  BDSI dated January 10, 2019 (the “Offer Letter”).  This Amendment shall be effective on  November __, 2020 (the “Amendment Effective Date”).  Capitalized terms not otherwise defined  herein shall have the respective meanings ascribed to such terms in the Offer Letter.      For good and valuable consideration, the receipt of which is hereby acknowledged, you  and BDSI hereby agree as follows:    1. The terms “Agreement” and “Offer Letter” as used in the Offer Letter shall have  the same meaning, and both refer to the Offer Letter.    2. The term “Company” in the Offer Letter shall mean BioDelivery Sciences  International, Inc.      3. The paragraph starting with “If BDSI terminates your employment other than for  ‘Cause’” and the three paragraphs that immediately follow it are amended and restated in their  entirety as follows:    “If BDSI terminates your employment other than for “Cause” (as defined below)  or if your employment is terminated as a result of your death or permanent  disability or by you for “Good Reason” (as defined below), and you comply with  the terms stated below, provided you (and/or your beneficiaries) enter into a  release agreement in a form provided by the Company at the time of such  termination (a “Release”) and the Release becomes effective within 60 days after  the date of termination (or such shorter period as set forth in the Release), BDSI  will pay you a one-time cash severance payment equal to 100% of your annual  base salary plus the pro-rata share of your annual bonus target for the year in  which the date of termination occurs (the “Severance Payment”), and, if the date  of termination occurs after the completion of a calendar year but prior to the  payment of annual bonuses for such year, BDSI will pay you the bonus amount  that you otherwise would have earned if you remained employed on the date of  payment, as determined in the sole discretion of BDSI (the “Prior Year Bonus”).  The Severance Payment will be paid within 60 days of the date of termination,  provided, however, that if the 60-day period begins in one calendar year and ends  





 






ACTIVE/105325905.2          in a second calendar year, such payment to the extent it qualifies as “non-qualified  deferred compensation” within the meaning of Section 409A of the Code, shall be  paid in the second calendar year by the last day of such 60-day period.  If  applicable, the Prior Year Bonus shall be paid to you at the time that the  Company’s other executives receive their annual bonuses, which shall be no later  than March 15 of the calendar year in which the date of termination occurs.    As used herein, the term “Cause” means (i) a material breach or material default  (including, without limitation, any material dereliction of duty) by you of any  agreement between you and BDSI or your continuing failure to follow any valid  and legal direction of BDSI’s Chief Executive Officer or BDSI’s Board of  Directors; (ii) your gross negligence, willful misfeasance or breach of fiduciary  duty; (iii) your commission of an act of fraud, embezzlement or any felony or  crime of dishonesty in connection with your duties with BDSI; or (iv) your  conviction of a felony or any other crime that would materially and adversely  affect: (a) BDSI’s business reputation, or (b) the performance of your duties for  BDSI. In the event of a termination of your employment for Cause, BDSI will pay  your salary and expenses reimbursable incurred through the date of termination,  and thereafter BDSI shall have no further responsibility for termination or other  payments to you.    For purposes of this Agreement, “Good Reason” shall mean the occurrence of any  of the following in each case during the Term without your consent:(i) a reduction  in your Base Salary; (ii) a reduction in your annual target bonus opportunity; (iii)  a relocation of your principal place of employment by more than thirty-five (35)  miles; (iv) any material breach by the Company of any material provision of this  Agreement or of any other agreement between the Company and you, including  any representation, warranties or covenants set forth herein; (v) the Company’s  failure to obtain an agreement from any successor to the Company following a  Change of Control to assume and agree to perform this Agreement in the same  manner and to the same extent that the Company would be required to perform if  no succession had taken place, except where such assumption occurs by operation  of law; (vi) a material, adverse change in your authority, duties, or responsibilities  (other than temporarily while you are physically or mentally incapacitated or as  required by applicable law).    You shall not terminate your employment for Good Reason unless you have first  provided written notice to the Company of the existence of the circumstances  providing grounds for termination for Good Reason within sixty (60) days of the  date you learn of the initial existence of such grounds and the Company has had at  least thirty (30) days from the date on which such notice is provided to cure such  circumstances and has failed to cure such circumstances. If you do not terminate  your employment for Good Reason within ninety (90) days after the date you  learn of the first occurrence of the applicable grounds, then you will be deemed to  have waived your right to terminate for Good Reason with respect to such  grounds.  





 






ACTIVE/105325905.2            In addition, if your employment with BDSI is terminated by BDSI or its successor  without Cause or by you for Good Reason, in either case within twelve (12)  months following the occurrence of a “Change of Control” (as defined below) (a  “CIC Severance Triggering Event”), then, in lieu of the Severance Payment: (i)  you will be entitled to a (A) one-time cash separation payment equal to either (I)  150% of your then current annual base salary if the termination is by the  Company without Cause or (II) 100% of your then current annual base salary if  the termination is by you for Good Reason, plus (B) a one-time cash payment of  100% of your annual bonus target (the “CIC Severance Payment”); (ii) if the date  of termination occurs after the completion of a calendar year but prior to the  payment of annual bonuses for such year, you will be entitled to the Prior Year  Bonus; (iii) you shall maintain any rights that you may have been specifically  granted pursuant to any of BDSI’s or its successor’s retirement plans,  supplementary retirement plans, profit sharing and savings plans, healthcare,  401(k) and any other employee benefit plans sponsored by BDSI or its successor;  and (iv) all unvested time-based options, RSUs or other equity securities to  acquire shares of BDSI common stock granted to you under BDSI’s 2011 and  2019 Equity Incentive Plans or any similar plan (as applicable, the “Plan”) shall  immediately become fully vested and shall be exercisable to the extent provided  for in the Plan (collectively the “Change in Control Benefits”). Following BDSI  or its successor’s compliance with clauses (i), (ii), (iii) and (iv) above, BDSI or its  successor shall have no further obligations to you following termination. In  addition, as a condition to the Change in Control Benefits you must enter into a  Release and the Release must become effective within 60 days after the date of  termination (or such shorter period as set forth in the Release). The CIC  Severance Payment will be paid within 60 days of the date of termination,  provided, however, that if the 60-day period begins in one calendar year and ends  in a second calendar year, such payment to the extent it qualifies as “non-qualified  deferred compensation” within the meaning of Section 409A of the Code, shall be  paid in the second calendar year by the last day of such 60-day period. If  applicable, the Prior Year Bonus shall be paid to you at the time that the  Company’s or its successor’s other executives receive their annual bonuses,  which shall be no later than March 15 of the calendar year in which the date of  termination occurs. All such payments shall comply with Section 409A of the  Internal Revenue Code of 1986, as amended, and all regulations promulgated  thereunder.”    4. The following new paragraph shall be inserted directly above “Please note that  this offer is contingent upon”:    “Anything in this Agreement to the contrary notwithstanding, in the event that the  amount of any compensation, payment or distribution by the Company to you or  for your benefit, whether paid or payable or distributed or distributable pursuant  to the terms of this Agreement or otherwise, calculated in a manner consistent  with Section 280G of the Code, and the applicable regulations thereunder (the  





 






ACTIVE/105325905.2          “Aggregate Payments”), would be subject to the excise tax imposed by Section  4999 of the Code, then the Aggregate Payments shall be reduced (but not below  zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the  amount at which you become subject to the excise tax imposed by Section 4999  of the Code; provided that such reduction shall only occur if it would result in you  receiving a higher After Tax Amount (as defined below) than you would receive  if the Aggregate Payments were not subject to such reduction.  In such event, the  Aggregate Payments shall be reduced in the following order, in each case, in  reverse chronological order beginning with the Aggregate Payments that are to be  paid the furthest in time from consummation of the transaction that is subject to  Section 280G of the Code:  (1) cash payments not subject to Section 409A of the  Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based  payments and acceleration; and (4) non-cash forms of benefits; provided that in  the case of all the foregoing Aggregate Payments all amounts or payments that are  not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be  reduced before any amounts that are subject to calculation under Treas. Reg.  §1.280G-1, Q&A-24(b) or (c).  For purposes of this paragraph, the “After Tax  Amount” means the amount of the Aggregate Payments less all federal, state, and  local income, excise and employment taxes imposed on you as a result of your  receipt of the Aggregate Payments.  For purposes of determining the After Tax  Amount, you shall be deemed to pay federal income taxes at the highest marginal  rate of federal income taxation applicable to individuals for the calendar year in  which the determination is to be made, and state and local income taxes at the  highest marginal rates of individual taxation in each applicable state and locality,  net of the maximum reduction in federal income taxes which could be obtained  from deduction of such state and local taxes. The determination as to whether a  reduction in the Aggregate Payments shall be made pursuant to this paragraph  shall be made by a nationally recognized accounting firm selected by the  Company (the “Accounting Firm”), which shall provide detailed supporting  calculations both to the Company and you within 15 business days of the date of  termination, if applicable, or at such earlier time as is reasonably requested by the  Company or you.  Any determination by the Accounting Firm shall be binding  upon the Company and you.”    5. All other provisions of the Offer Letter shall remain in full force and effect  according to their respective terms, and nothing contained herein shall be deemed a waiver of  any right or abrogation of any obligation otherwise existing under the Offer Letter except to the  extent specifically provided for herein.  For the avoidance of doubt, the Confidentiality,  Intellectual Property and Non-Competition Agreement between you and BDSI remains in full  force and effect.    6. This Amendment shall be governed by and construed in accordance with the laws  of the State of North Carolina, without regard to conflict of law principles.    





 






ACTIVE/105325905.2          7. This Amendment may be signed in two counterparts, each of which may be  delivered by facsimile or other electronic transmission and each of which shall be deemed an  original and both of which shall together constitute one agreement.    [Signature page follows] 





 






ACTIVE/105325905.2          We look forward to continuing to work with you at BDSI.  To accept the terms of this  Amendment, please sign and return it to me at your earliest convenience.        Regards,    _____________________________  Name:  Title:      First Amendment to Offer Letter accepted and agreed as of the date set forth below:      _____________________________  Terry Coelho      _____________________________  Date  December 4, 2020