Document:

Exhibit 10.2-SecondAmendmenttoAlkermesLicenseAgreement

12 March 2013
Confidential 
 

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.2

SECOND AMENDMENT TO LICENSE AGREEMENT

This Second Amendment to the License Agreement (as defined below) (the "Second Amendment") is made and entered into as of 12th day of March, 2013 (“Second Amendment Effective Date”).  

BETWEEN:

(1)    Alkermes Pharma Ireland Limited, a company incorporated under the laws of Ireland, and having its registered office at Connaught House, 1 Burlington Road, Dublin 4, Ireland (“Alkermes”); AND 

(2)    Zogenix, Inc., a Delaware corporation, having its principal place of business at 12400 High Bluff Drive, Ste. 650, San Diego, California, USA 92130 (“Zogenix”).

RECITALS:

WHEREAS Elan Pharma International Limited (“EPIL”) and Zogenix entered into a license agreement on November 27, 2007, which was amended pursuant to the First Amendment to License Agreement dated September 28, 2009 (“License Agreement”), wherein EPIL granted Zogenix a license under Elan Intellectual Property to import, use, offer for sale and sell the Product (as defined in the License Agreement) in the Field (as defined in the License Agreement) in the Territory (as defined in the License Agreement), and, in certain limited circumstances, to make or have made Product in the Field in the Territory, in each case on the terms and conditions set forth on the License Agreement (capitalized terms used in this Second Amendment but not defined herein shall have the meaning set forth in the License Agreement);  

WHEREAS on August 2, 2011, EPIL assigned all of its rights and obligations to the License Agreement to EDT Pharma Holdings Limited, which has subsequently changed its name to Alkermes Pharma Ireland Limited; and

WHEREAS Zogenix and Alkermes desire to amend the License Agreement as set forth herein, subject to the terms and conditions set forth herein;  

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Alkermes and Zogenix hereby agree as follows:

		
	1.
	Amendments.  As of the Second Amendment Effective Date, Alkermes and Zogenix hereby amend:

12 March 2013
Confidential 
 

		
	1.1.
	 The definition of “Elan Patents” as set forth below:

“ ‘Elan Patents’ means any and all Patents and any and all rights owned, licensed or controlled by Elan under 
(a)     U.S. Patent No. 6,902,742,
(b)     U.S. Published Patent Application Number 2006/024015,
(c)     U.S. Patent No. 6,228,398,
(d)     any U.S. Patents that claim priority to the Patents described in clauses (a), (b) or (c) hereof and relate exclusively to the formulation, use, sale or offer for sale of the Product or the manufacturing processes used in making the Product, and
(e)     any U.S. Patents, other than Zogenix Patents, claiming subject matter that
(i) are directly related to the formulation, use, sale or offer for sale of the Product, or the manufacturing processes used in making the Product, and
(ii) were developed solely by or on behalf of Elan or Zogenix and/or jointly by Zogenix and Elan as a result of that Party (or its Affiliate) fulfilling obligations under this Agreement or Related Agreements.”

		
	1.2.
	The definition of “Net Sales” as set forth below:

“ ‘Net Sales’ means, subject to the provisions of Clause 10.4, the aggregate gross In Market sales amounts billed for the Product in accordance with Zogenix's standard accounting principles that are in accordance with US GAAP, less the following deductions determined in accordance with Zogenix's standard accounting principles that are in accordance with US GAAP:  
[***]

		
	1.3.
	Section 10.3 as set forth below:

“Royalty on Sales.  In further consideration of the grant of the Elan License, Zogenix shall pay to Elan (i) a royalty of [***] and (ii) a royalty of [***].”

		
	2.
	No Other Amendments.  All other terms and conditions of the License Agreement remain unchanged and continue to be in full force and effect.

		
	3.
	Counterparts; Signatures.  This Second Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute this Second Amendment.  Signatures provided by facsimile transmission or in AdobeTM Portable Document Format (PDF) sent by electronic mail shall be deemed to be original signatures.

12 March 2013
Confidential 
 

		
	4.
	Governing Law; Jurisdiction.  This Second Amendment shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws rules, and shall be subject to the exclusive jurisdiction of the State and Federal Courts located in New York, New York.

[Remainder of Page Intentionally Left Blank]

12 March 2013
Confidential 
 

IN WITNESS WHEREOF Alkermes and Zogenix have caused this Second Amendment to be executed by their duly authorized representatives to be effective as of the Second Amendment Effective Date.

ALKERMES PHARMA IRELAND LIMITED

By:_/s/ Shane Cook_______________________

Title:_Director  __________________________

ZOGENIX, INC.

By:_/s/ Roger L. Hawley___________________

Title:_CEO______________________________Exhibit 10.3 - Independent Director Compensation Policy

Exhibit 10.3

ZOGENIX, INC.

INDEPENDENT DIRECTOR COMPENSATION POLICY

(AS AMENDED AND RESTATED EFFECTIVE MARCH 15, 2013)

Non-employee members of the board of directors (the “Board”) of Zogenix, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Independent Director Compensation Policy.  The cash compensation and option grants described in this Independent Director Compensation Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, an “Independent Director”) who may be eligible to receive such cash compensation or options, unless such Independent Director declines the receipt of such cash compensation or options by written notice to the Company.  This Independent Director Compensation Policy shall remain in effect until it is revised or rescinded by further action of the Board.  The terms and conditions of this Independent Director Compensation Policy shall supersede any prior cash or equity compensation arrangements between the Company and its directors.  
1.    Cash Compensation.  Each Independent Director shall be eligible to receive an annual retainer of $37,000 for service on the Board.  In addition, an Independent Director serving as:
(a)    chairman of the board shall be eligible to receive an additional annual retainer of $60,000 for such service, however the total cash compensation paid to the chairman of the board in all capacities cannot exceed $100,000;
(b)    chairman of the Audit Committee shall be eligible to receive an additional annual retainer of $20,000 for such service;
(c)     members (other than the chairman) of the Audit Committee shall be eligible to receive an additional annual retainer of $7,000 for such service;
(d)     chairman of the Compensation Committee shall be eligible to receive an additional annual retainer of $10,000 for such service; 
(e)     members (other than the chairman) of the Compensation Committee shall be eligible to receive an additional annual retainer of $5,000 for such service;
(f)     chairman of the Nominating and Corporate Governance Committee shall be eligible to receive an additional annual retainer of $7,500 for such service; and
(g)     members (other than the chairman) of the Nominating and Corporate Governance Committee shall be eligible to receive an additional annual retainer of $4,000 for such service.
The annual retainers shall be paid by the Company in quarterly installments or more frequently as deemed advisable by the officers of the Company for administrative or other reasons.
2.    Equity Compensation.  The Independent Directors shall be granted the following option awards.  The options described below shall be granted under and shall be subject to the terms and provisions 

of the Company’s 2010 Equity Incentive Award Plan (the “2010 Plan”) and shall be granted subject to the execution and delivery of option agreements, including attached exhibits, in substantially the same forms previously approved by the Board, setting forth the vesting schedule applicable to such options and such other terms as may be required by the 2010 Plan. 
(a)    Initial Options.  A person who is initially elected or appointed to the Board, and who is an Independent Director at the time of such initial election or appointment, shall be eligible to receive a non-qualified stock option to purchase 70,000 shares of common stock (subject to adjustment as provided in the 2010 Plan) on the date of such initial election or appointment (each, an “Initial Option”).  
(b)    Subsequent Options.  A person who is an Independent Director automatically shall be eligible to receive a non-qualified stock option to purchase 45,000 shares of common stock (subject to adjustment as provided in the 2010 Plan) on the date of each annual meeting of the Company’s stockholders.  The option grants described in this clause 2(b) shall be referred to as “Subsequent Options.”  An Independent Director elected for the first time to the Board at an annual meeting of stockholders shall only receive an Initial Option in connection with such election, and shall not receive a Subsequent Option on the date of such meeting as well.
        
(c)    Termination of Employment of Employee Directors.  Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Option grant pursuant to clause 2(a) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from employment with the Company and any parent or subsidiary of the Company, Subsequent Options as described in clause 2(b) above.  
(d)    Terms of Options Granted to Independent Directors
(i)      Exercise Price.  The per share exercise price of each option granted to an Independent Director shall equal 100% of the Fair Market Value (as defined in the 2010 Plan) of a share of common stock on the date the option is granted. 
(ii)    Vesting.  Initial Options granted to Independent Directors shall become exercisable in thirty-six equal monthly installments of 1/36 of the shares subject to such option on the first day of each calendar month following the date of the Initial Option grant, such that each Initial Option shall be 100% vested on the first day of the 36th month following the date of grant, subject to the director’s continuing service on the Board through such dates.  Subsequent Options granted to Independent Directors shall become vested in twelve equal monthly installments of 1/12 of the shares subject to such option on the first day of each calendar month following the date of the Subsequent Option grant, subject to a director’s continuing service on the Board through such dates. The term of each option granted to an Independent Director shall be ten years from the date the option is granted.  No portion of an option which is unexercisable at the time of an Independent Director’s termination of membership on the Board shall thereafter become exercisable.

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