Exhibit 10.18

 

ADAMAS PHARMACEUTICALS, INC. 
 TRANSACTION BONUS PLAN

 

	
Purpose
    	
 
    	
The   purpose of the Adamas Pharmaceuticals, Inc. Transaction Bonus Plan (the   “Plan”) is to induce key   contributors to remain with Adamas Pharmaceuticals, Inc. (the “Company”), and to enhance the   Company’s value, by providing incentive bonuses in the event that the Company   receives certain license payments.
    
	
 
    	
 
    	
 
    
	
Triggering   Event (the “Covered Transaction”)
    	
 
    	
Benefits   under the Plan are payable in connection with certain payments made to the   Company pursuant to that certain License Agreement (the “Agreement”)   by and between Forest Laboratories Holdings Limited and the Company dated as   of November 14, 2012 (the “Covered Transaction”).   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Non-cash   consideration will be valued in good faith by the Company’s Board of   Directors.
    
	
 
    	
 
    	
 
    
	
Size   of Pool (the “Pool”)
    	
 
    	
The   Pool is an amount equal to 1% of the Specified Transaction Consideration, up   to a maximum aggregate amount of $1,600,000. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Specified Transaction Consideration”   means the Initial License Payment (as defined in the Agreement) and the   Milestone Payments (as defined in the Agreement) payable in connection with   the Covered Transaction, but excluding any royalties and other payments under   Section 6.4 of the Agreement.
    
	
 
    	
 
    	
 
    
	
Selection   of Participants
    	
 
    	
The   Company’s Board of Directors may select the participants in the Plan at any   time (the “Participants”), based upon   the recommendation of the Company’s Chief Executive Officer.
    
	
 
    	
 
    	
 
    
	
Allocation   of Pool
    	
 
    	
The   Company’s Board of Directors will allocate some or all of the Pool among the   Participants at any time. The amount allocated to each Participant (such   Participant’s “Bonus Amount”) shall   represent the maximum aggregate amount to which each he/she may become   entitled hereunder and shall be expressed as either a fixed dollar or   percentage of the total Pool amount.
    


 











 

	
Prerequisites   for Payment
    	
 
    	
A   Participant earns the right to be paid his/her Bonus Amount by continuing to   be employed by the Company through any date pursuant to which payments are   made in connection with the Covered Transaction. Such payments will be paid   to the Participants within the 60th day following the date such payment was   scheduled to be paid in connection with the Covered Transaction. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the discretion of the Board of Directors, no benefits will be paid to a   Participant unless the Participant executes a general release of all claims   (in a form prescribed by the Company) he or she may have against the Company   or persons affiliated with the Company through the date of the release. The   release must be executed and returned to the Company on or before the date   specified by the Company in the prescribed form, which will in no event be   later than 45 days after a payment is payable in connection with a Covered   Transaction (the “Release Deadline”). If a   Participant has not executed a general release of claims by the Release   Deadline as requested by the Company or revokes such release, the Participant   will not be entitled to the applicable payments or benefits under the Plan. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
To   the extent that a Participant’s benefit is forfeited because the Participant   failed to satisfy one or more of the prerequisites to payment specified in   this section, the Company shall have no further obligation to the Participant   (or anyone who may claim through the Participant) with respect to such   forfeited amount and the aggregate Pool will be allocated pro rata to the   remaining Participants.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
Bonuses   will be paid in cash.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
All   payments under the Plan will be reduced as necessary to pay withholding and   payroll taxes and other deductions required by law. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the discretion of the Board of Directors, payments under the Plan may also be   reduced by the amount necessary to pay the employer portion of applicable   taxes (e.g., FICA and Medicare), in which   case the aggregate Pool will be reduced by the amount of such employer taxes.
    


 

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Section 409A
    	
 
    	
It   is intended that each installment of the payments provided under this Plan is   a separate “payment” for purposes of Treasury Regulation   Section 1.409A-2(b)(2)(i). 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
It   is intended that payments under the Plan satisfy, to the greatest extent   possible, the exemption from the application of Section 409A of the   Internal Revenue Code (the “Code”)   (and any state law of similar effect) provided under Treasury Regulation   Section 1.409A-1(b)(4) (as a “short-term deferral”). 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   the foregoing, in no event will the Company or any successor be responsible   for or have any obligation to reimburse a Participant for any taxes that may   be imposed on a Participant under Section 409A of the Code.
    
	
 
    	
 
    	
 
    
	
Source   of Payments
    	
 
    	
The   Company or its successor will make all payments under the Plan from its   general assets. The Company’s obligations under the Plan are unfunded and   unsecured, and Participants have no rights other than those of general   creditors.
    
	
 
    	
 
    	
 
    
	
No   Assignment of Benefits
    	
 
    	
Benefits   under the Plan are not assignable or transferable by Participants before they   are paid. Benefits will be paid only to the Participants who are entitled to   receive them under the Plan.
    


 

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Parachute   Tax Penalties and Stockholder Approval
    	
 
    	
·                  The excise tax on excess   parachute payments, determined under Sections 280G and 4999 of the   Code, generally applies if all of a Participant’s parachute payments together   equal or exceed 300% of his/her average annual compensation from the Company   reported on Form W-2 Box 1. It generally does not apply, however, if the   bonus is (a) subject to approval by more than 75% of the Company’s   stockholders (excluding from both the numerator and denominator, individuals   receiving parachute payments subject to stockholder approval), and   (b) is so approved at the time of a Covered Transaction. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  All benefits payable under   the Plan are subject to approval by more than 75% of the Company’s   disinterested stockholders, if the Company’s Board of Directors reasonably   determines that such approval is or may be required to avoid application of   the excise tax on, and the loss of a Company deduction resulting from, excess   parachute payments. If the Board of Directors reasonably determines that   approval is or may be required and a benefit is not approved by more than 75%   of the stockholders, then that benefit shall not be paid. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  A Participant’s bonus will   be reduced to the extent that, as a result of the excise tax on excess   parachute payments, the Participant’s after-tax proceeds would be greater   after the reduction than before the reduction.
    
	
 
    	
 
    	
 
    
	
Employment   at Will
    	
 
    	
Employment   with the Company is for no specific period of time. Participation in the Plan   does not confer any right to continued employment, and a Participant’s   employment with the Company is “at will.” Therefore, either the Participant   or the Company may terminate the Participant’s employment at any time and for   any reason, with or without cause.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
The   Plan will be interpreted and administered by the Company’s Board of Directors   or a duly authorized committee of the Board of Directors. Any reference to   the Board of Directors in this Plan will be construed as a reference to the   committee of the Board of Directors (if any) to whom the Board of Directors has   assigned a particular function. The determinations of the Board of Directors   with regard to the Plan will be final, binding, and conclusive on all   Participants.
    


 

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Amendment   and Termination
    	
 
    	
Prior   to the closing of a Covered Transaction, the Plan may be amended or   terminated by the Company’s Board of Directors, including any amendments   deemed advisable by the Board of Directors in order to avoid adverse tax   consequences for one or more Participants imposed by   Section 409A(a)(1) of the Code (or similar taxes imposed by state   law). Thereafter, the Plan may not be amended or terminated without the   consent of each adversely affected Participant.
    


 

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