Document:

exv10w22

Exhibit
10.22

AVANIR PHARMACEUTICALS

[2005] [2003] Equity Incentive Plan

Restricted Stock Unit Director Grant Agreement

     This Restricted Stock Unit Director Grant Agreement (the “Agreement”) is dated as of
__________, 200__ and is entered into between Avanir Pharmaceuticals, a California corporation (the
“Company”), and ______________ (the “Director”). Capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Plan (defined below).

AGREEMENT

     In consideration of the mutual promises set forth below, the parties hereto agree as
follows:

     1. Award of Restricted Stock Units. Subject to the terms and conditions of this
Agreement and the Company’s [2003] [2005] Equity Incentive Plan (the “Plan”) (the terms of which
are incorporated herein by reference) and effective as of the date set forth above, the Company
hereby grants to the Director _________ Restricted Stock Units.

     2. Vesting. The Restricted Stock Units shall vest with respect to one-third of the
Shares underlying the Restricted Stock Units on the 13-month anniversary of the Base Vesting Date
(defined below) and then with respect to one thirty-fifth of the Shares underlying the Restricted
Stock Units monthly thereafter. In the event of a Fundamental Transaction or Change in Control,
the vesting of the Restricted Stock Units shall fully accelerate. For purposes of this Section 2,
the “Base Vesting Date” shall be ____________, 200__, which was the date of the Company’s 200__
Annual Meeting of Shareholders.

     3. Effect of Termination. Following the Termination of a Director’s service, the
unvested portions of the Restricted Stock Units, if any, as of the date of Termination shall be
forfeited.

     4. Distribution. Stock certificates evidencing a one-for-one conversion (adjusted
as provided in the Plan) of vested Restricted Stock Units into Shares (the “Certificate”) shall be
issued and registered in the Director’s name as of the later of a particular Vesting Date or the
date elected in Exhibit A (such date being the end of the “Restricted Period”). Subject to
Section 7 of this Agreement, Certificates will be delivered to the Director as soon as practicable
after the end of the Restricted Period. In the case of death, Certificates shall be delivered to
the Director’s beneficiary or estate as soon as practicable. Notwithstanding anything herein to the
contrary, the Restricted Period shall not lapse until the Director’s Termination of Service.

     5. Deferral Election. The Director may elect to defer delivery of the Certificates
that would otherwise be due by virtue of the lapse or waiver of the vesting requirements as set
forth in Section 2 and the satisfaction of the distribution requirements set forth in Section 4.
The election must be made (a) within thirty days from the date of grant and (b) on the form
attached as Exhibit A.

 

 

     6. Dividends. Participants holding Restricted Stock Units shall not be entitled to
receive cash payments equal to any cash dividends and other distributions paid with respect to a
corresponding number of Shares until the underlying Shares have been delivered in accordance
with this Agreement.

     7. Tax Withholding Obligations. In circumstances in which tax withholding is
applicable, to meet any such obligations of the Company and Director that might arise with respect
to any withholding taxes, FICA contributions, or the like under any federal, state, or local
statute, ordinance, rule, or regulation in or connection with the award, deferral, or settlement of
the Restricted Stock Units, the Director shall remit to the Company an amount of cash sufficient to
meet the withholding requirements and/or the Company shall withhold the required amounts from the
Director’s pay. Notwithstanding the foregoing, the Committee may, in its sole discretion, allow the
Director to satisfy such withholding obligations upon settlement of the Restricted Stock Units by
withholding a number of Shares having a Fair Market Value equal to the Company’s statutory
withholding obligations. The Company shall not deliver any of the Certificates until and unless the
Director has made the payment(s) required herein or proper provision for required withholding has
been made. The Director hereby consents to any action reasonably taken by the Company to meet the
withholding obligations.

     8. Restriction on Transferability. Until distribution, the Restricted Stock Units
may not be sold, transferred, pledged, assigned, or otherwise alienated at any time. Any attempt to
do so contrary to the provisions hereof shall be null and void. Notwithstanding the above,
transfers can be made pursuant to intra-family transfer instruments or to an inter vivos trust.

     9. Rights as Shareholder. The Director shall not have voting or any other rights as
a shareholder of the Company with respect to the Restricted Stock Units. Upon settlement of the
Restricted Stock Units into Shares, the Director will obtain full voting and other rights as a
shareholder of the Company.

     10. Administration. The Committee shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation, and application of
the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken
and all interpretations and determinations made by the Committee shall be final and binding upon
the Director, the Company, and all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good faith with respect
to the Plan or this Agreement.

     11. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units
granted pursuant to this Agreement shall not be included as compensation, earnings, salaries, or
other similar terms used when calculating the Director’s benefits under any director or other
benefit plan sponsored by the Company or any Affiliate except as such plan otherwise expressly
provides. The Company expressly reserves its rights to amend, modify, or terminate any of the
Company’s or any Affiliate’s employee benefit plans.

     12. No Employment, Consulting or Board Service Rights. The award of the Restricted
Stock Units pursuant to this Agreement shall not give the Director any right to remain in the

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service of the Company or any Affiliate. Also, the award is completely within the discretion of the
Company. It is not made as a part of any ongoing element of compensation or something that the
Director should expect to receive annually or on any other periodic basis. It does not constitute
part of the Director’s compensation and unless specifically agreed to otherwise with
the Company is not relevant for purposes of determining any post-employment payment or
severance.

     13. Amendment. This Agreement may be amended only by a writing executed by the
Company and the Director which specifically states that it is amending this Agreement.
Notwithstanding the foregoing, this Agreement may be amended solely by the Committee by a writing
which specifically states that it is amending this Agreement, so long as a copy of such amendment
is delivered to the Director, and provided that no such amendment adversely affects the rights of
the Director (but limiting the foregoing, the Committee reserves the right to change, by written
notice to the Director, the provisions of the Restricted Stock Units or this Agreement in any way
it may deem necessary or advisable to carry out the purpose of the grant as a result of any change
in applicable laws or regulations or any future law, regulation, ruling, or judicial decision,
provided that any such change shall be applicable only to Restricted Stock Units which are then
subject to restrictions as provided herein).

     14. Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Secretary of the Company. Any notice to be given to the Director
shall be addressed to the Director at the address listed in the Company’s records. By a notice
given pursuant to this Section, either party may designate a different address for notices. Any
notice shall have been deemed given when actually delivered.

     15. Severability. If all or any part of this Agreement or the Plan is declared by
any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity
shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or
invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or
invalid shall, if possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining lawful and valid.

     16. Construction. The Restricted Stock Units are being issued pursuant to the Plan
and are subject to the terms of the Plan, the terms of which are incorporated herein by reference.
A copy of the Plan has been given to the Director, and additional copies of the Plan are available
upon request during normal business hours at the principal executive offices of the Company. To the
extent that any provision of this Agreement violates or is inconsistent with an express provision
of the Plan, the Plan provision shall govern and any inconsistent provision in this Agreement shall
be of no force or effect.

     17. Miscellaneous.

          (a) The Board may terminate, amend, or modify the Plan; provided, however, that no such
termination, amendment, or modification of the Plan may in any way adversely affect the
Participant’s rights under this Agreement, without the Participant’s written approval.

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          (b) This Agreement shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as may be required.

          (c) All obligations of the Company under the Plan and this Agreement, with respect to the
Restricted Stock Units, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business and/or assets of the
Company.

          (d) By signing this Agreement, the Director acknowledges that his or her personal
employment information regarding participation in the Plan and information necessary to determine
and pay, if applicable, benefits under the Plan must be shared with other entities, including
companies related to the Company and persons responsible for certain acts in the administration of
the Plan. By signing this Agreement the Director consents to such transmission of personal data as
the Company believes is appropriate to administer the Plan.

          (e) To the extent not preempted by federal law, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

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

	 	 	 	 	 	 
			
	[Director’s Name]

	 	Avanir Pharmaceuticals	 	 
	 
	 		 	 	 
	 

	 	By: 	 	 	 
	 

	 		 

Keith Katkin

President and Chief Executive Officer
	 	 

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EXHIBIT A

AVANIR PHARMACEUTICALS

RSU DEFERRAL ELECTION

     The following constitutes an election by the undersigned director of Avanir Pharmaceuticals to
defer payment of vested benefits pursuant to the Restricted Stock Unit Director Grant Agreement
(“Agreement”) under the Avanir [2003] [2005] Equity Incentive Plan (“Plan”). The undersigned
acknowledges that because the terms of the Agreement provide that Restricted Stock Units will not
be delivered to him or her until his or her service as a director ends, this election pertains only
to a deferral beyond that time.

	1.	 	Election: The undersigned hereby elects to receive the distribution (in Company
Shares) of Avanir Class A common stock underlying vested Restricted Stock Units as follows
(please select one of the three distribution choices below):

	 
	o	 	In one lump sum upon termination of my service as a director that constitutes a
“Separation from Service” (as defined in the final regulation promulgated under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Regulation”)
(“Termination of Service”); or
	 
	o	 	 In one lump sum on ____________ (but not before my Termination of Service); or
	 
	o	 	 In _________ equal annual installments, starting on ____________ (but not before
my Termination of Service).

In the event of death, Disability (as defined in the Regulation) or a Change in Control (as defined
in the Regulation), distribution of vested Restricted Stock Units shall be made immediately in one
lump sum.

	2.	 	Change of Election: I hereby acknowledge that I may not change the date of the
distribution as elected above unless I do so at least twelve months prior to the date the
first distribution is due under the election above and at least twelve months prior to the
date my new election is scheduled to take effect. I also acknowledge that if I change my
distribution date elected above, the first date I may receive any distribution with respect
to Shares covered by this election is not earlier than five years after the date payment
would otherwise have been made pursuant to the election above. Such change must be timely
filed in writing with the Company’s stock option administrator. The Company shall have sole
discretion to revise the terms of this election or any change, or the procedures with
respect to making this election or any change, to the extent the Company deems it helpful
or appropriate to comply with applicable law.

	 	 	 	 	 

	 
	 

Director Signature

	 	 

Date
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name
	 	 	 	 

5exv10w24

Exhibit 10.24

FORM OF

CHANGE OF CONTROL AGREEMENT

     This Change of Control Agreement (the “Agreement”), dated as of _________ __, 200_
(the “Effective Date”), is made by and between Avanir Pharmaceuticals, a California
corporation having its principal offices at 101 Enterprise, Suite 300, Aliso Viejo, California (the
“Company”) and __________ (“Employee”).

RECITALS

     A. It is expected that other entities or individuals may, from time to time, consider the
possibility of acquiring the Company in a transaction that will result in a Change of Control
(defined below), with or without the approval of the Company’s Board of Directors. The Board of
Directors recognizes that such consideration may cause Employee to consider alternative employment
opportunities. Accordingly, the Board of Directors has determined that it is in the best interests
of the Company and its shareholders to assure that the Company will have the continued dedication
and objectivity of Employee, notwithstanding the possibility, threat or occurrence of a Change of
Control.

     B. The Company’s Board of Directors believes it is in the best interests of the Company and
its shareholders to enter into this Agreement to provide incentives to Employee to continue in the
service of the Company in the event of a Change of Control.

     C. The Board of Directors further believes that it is necessary to provide Employee with
certain benefits upon termination of Employee’s employment in connection with a Change of Control,
which benefits are intended to provide Employee with financial security and provide sufficient
income and encouragement to Employee to remain employed by the Company, notwithstanding the
possibility of a Change of Control.

     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained
herein, and in consideration of the continuing employment of Employee by the Company, the parties
hereto agree as follows:

	1.	 	Definitions.

     1.1 “Awards” means Employee’s outstanding stock options, restricted stock awards,
restricted stock units, stock appreciation rights and other equity-based awards granted under the
Company Equity Plans, in each case that remain outstanding immediately following a Change of
Control.

     1.2 “Base Salary” means Employee’s gross monthly salary on the date of calculation,
excluding bonus and other incentive compensation.

     1.3 “Cause” shall, if applicable, have the meaning set forth in the definitive written
employment agreement between Employee and the Company (the “Employment Agreement”); provided,
however, that if there is no Employment Agreement, or if the Employment Agreement does not define
what shall constitute a termination for “cause” (or a substantially similar term), then “Cause” for
purposes of this Agreement shall mean: (i) Employee’s material breach of this

 

 

Agreement or any confidentiality agreement between the Company and Employee; (ii) Employee’s
failure or refusal to comply with the Company’s Employee Manual, the Company’s Code of Business
Conduct and Ethics, or other policies or procedures established by the Company (iii) Employee’s
appropriation (or attempted appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in connection with any transaction
entered into on behalf of the Company; (iv) Employee’s misappropriation (or attempted
misappropriation) of any of the Company’s funds or material property; (v) Employee’s conviction of,
or the entering of a guilty plea or plea of no contest with respect to a felony, the equivalent
thereof, or any other crime with respect to which imprisonment is a possible punishment; (vi)
Employee’s willful misconduct or incompetence; (vii) Employee’s physical or mental disability or
other inability to perform the essential functions of his position, with or without reasonable
accommodation; or (viii) Employee’s death.

     1.4 “CCC” means the California Code of Civil Procedure.

     1.5 A “Change of Control” shall have occurred if, and only if:

          (a) any individual, partnership, firm, corporation, association, trust, unincorporated
organization or other entity or person, or any syndicate or group deemed to be a person under
Section 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”) is or becomes
the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities entitled to vote in the election of directors of the Company; or

          (b) if those individuals who constituted the Board at the Effective Date cease to constitute a
majority of the Board as a result of, or in connection with, a proxy solicitation made by a third
party pursuant to Regulation 14A under the Securities Exchange Act of 1934; or

          (c) there occurs a reorganization, merger, consolidation or other corporate transaction
involving the Company (“Transaction”), in each case, with respect to which the stockholders
of the Company immediately prior to such Transaction do not, immediately after the Transaction, own
more than 50% of the combined voting power of the Company’s then outstanding securities entitled to
vote in the election of directors of the Company or of the securities of any other corporation
resulting from such Transaction; or

          (d) all or substantially all of the assets of the Company are sold, liquidated or distributed,
other than in connection with a bankruptcy, insolvency or other similar proceeding, or an
assignment for the benefit of creditors.

     1.6 A “Change of Control Termination” shall have occurred if Employee’s employment by
the Company, or any of its subsidiaries or affiliates, is terminated without Cause or Employee
resigns in a Resignation for Good Reason, in either case within 12 months following the effective
date of a Change of Control.

     1.7 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.

     1.8 “Code” means the Internal Revenue Code of 1986, as amended.

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     1.9 “Company Equity Plans” means the Company’s 1994 Stock Option Plan, 1998 Stock
Option Plan, 2000 Stock Option Plan, 2003 Equity Incentive Plan and 2005 Equity Incentive Plan,
each as may be amended from time to time, and any stock option agreements, award notices, stock
purchase agreements or other agreements or instruments executed and delivered pursuant thereto.

     1.10 “Release” means a general release, in the form attached hereto as Exhibit
A, by Employee of all claims against the Company and its affiliates as of the date of the
Change of Control Termination.

     1.11 “Resignation for Good Reason” means a resignation based on any of the following
events, each of which shall constitute “Good Reason,” subject to the notice and cure provisions set
forth below:

          (a) a material diminution in Employee’s authority, duties, or responsibilities;

          (b) a material diminution in Employee’s Base Salary;

          (c) a material change in geographic location at which the Employee must perform the services;
or

          (d) any other action or inaction that constitutes a material breach of the terms of an
applicable employment agreement.

     To constitute a Resignation for Good Reason: (i) Employee must provide written notice to the
Company within 90 days of the initial existence of the event constituting Good Reason, (ii)
Employee may not terminate his or her employment unless the Company fails to remedy the event
constituting Good Reason within 30 days after such notice has been deemed given pursuant to this
Agreement, and (iii) Employee must terminate employment with the Company no later than 30 days
after the end of the 30-day period in which the Company fails to remedy the event constituting Good
Reason.

     1.12 “Severance Payment” means severance pay in an amount equal to [24/12] months of
Base Salary, plus an amount equal to the greater of (A) the aggregate bonus payment(s) received by
Employee in the Company’s preceding fiscal year or (B) the target bonus amount, such payments to be
paid in accordance with the terms in Section 2.1(b) below. Notwithstanding the foregoing, if the
tenure of Employee’s employment with the Company at the time of termination is less than one year,
then the bonus amount calculated under this Section 1.11 shall be pro rated for the partial year of
service.

     1.13 “Severance Period” means the 12-month period following a Change of Control
Termination.

2. Change of Control Termination.

     2.1 Payment upon Change of Control Termination. Subject to Sections 2.2 and 2.3, in
the event of a Change of Control Termination:

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          (a) The Company shall promptly pay Employee all accrued but unpaid Base Salary and all accrued
but unused vacation time, each through the date of termination; and

          (b) The Company shall pay Employee the Severance Payment after the date of termination, which
Severance Payment shall be payable in one lump-sum payment on the first payroll date that is 30
days after the date of such termination. Anything in this Agreement to the contrary
notwithstanding, if at the time of Employee’s separation from service, Employee is determined by
the Company to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Code, and if any payment that Employee becomes entitled to under this Agreement would be considered
deferred compensation subject to interest and additional tax imposed pursuant to Section 409A(a) of
the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earlier of (1) six months and one day after
Employee’s separation from service, or (2) Employee’s death. The parties intend that this Agreement
will be administered in accordance with Section 409A of the Code. The parties agree that this
Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully
comply with Section 409A of the Code and all related rules and regulations in order to preserve the
payments and benefits provided hereunder without additional cost to either party; and

          (c) Employee may elect to continue insurance coverage as afforded to Employee according to
COBRA at no cost to the Employee during the Severance Period. Nothing in this Agreement will extend
Employee’s COBRA period beyond the period allowed under COBRA, nor is Company assuming any
responsibility for Employee’s election to continue coverage; and

          (d) The vesting of all Awards shall accelerate in full and all rights of repurchase of Award
shares shall immediately lapse.

     2.2 Employee Release. In consideration for the benefits set forth above in Sections
2.1(b), 2.1(c) and 2.1(d), following a Change of Control Termination, Employee shall execute and
deliver the Release no later than 10 days after termination of employment. The Company shall have
no obligation to pay or grant the benefits set forth in Sections 2.1(b), 2.1(c) and 2.1(d) if
Employee does not execute and deliver the Release, or if Employee subsequently revokes, or attempts
in writing to revoke, any portion of the Release.

     2.3 Other Benefits. In the event that the Employment Agreement provides for specific
benefits upon a Change of Control and/or a Change of Control Termination that are materially more
favorable to Employee than like benefits set forth herein, then Employee shall be entitled to those
benefits set forth in the Employment Agreement in lieu of the lesser like benefits set forth
herein.

3. Excise Tax Cutback.

          (a) Anything in this Agreement to the contrary notwithstanding, in the event that any
compensation, payment or distribution by the Company to or for the benefit of Employee, whether
paid or payable or distributed or distributable pursuant to the terms of this

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Agreement or otherwise (collectively, the “Payments”), would be subject to the excise
tax imposed by Section 4999 of the Code, the following provisions shall apply:

          (i) If the Payments, reduced by the sum of (1) the Excise Tax (as defined below) and
(2) the total of the federal, state, and local income and employment taxes payable by
Employee on the amount of the Payments that are in excess of the Threshold Amount (as
defined below), are greater than or equal to the Threshold Amount, then Employee shall be
entitled to the full benefits payable under this Agreement.

          (ii) If the Threshold Amount is less than (x) the Payments, but greater than (y) the
Payments reduced by the sum of (1) the Excise Tax and (2) the total of the federal, state,
and local income and employment taxes on the amount of the Payments which are in excess of
the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but
not below zero) to the extent necessary so that the maximum Payments shall not exceed the
Threshold Amount. In such event, the payments shall be reduced in the following order: (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. To the extent any payment is to be made over time (e.g., in installments, etc.),
then the payments shall be reduced in reverse chronological order. The determination of the
reduction 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 the Executive within 15 business days of the date of termination of
service, if applicable, or at such earlier time as is reasonably requested by the Company or
the Executive. For purposes of this determination, the Executive 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 the state and
locality of the Executive’s residence on the date of termination of service, net of the
maximum reduction in federal income taxes which could be obtained from deduction of such
state and local taxes. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive.

          (b) For the purposes of this Section 3, “Threshold Amount” shall mean three times
Employee’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations
promulgated thereunder, less one dollar ($1.00); and “Excise Tax” shall mean the excise tax
imposed by Section 4999 of the Code, and any interest or penalties incurred by Employee with
respect to such excise tax.

4. Dispute Resolution Procedures. Any dispute or claim arising out of this Agreement shall
be subject to final and binding arbitration. The arbitration will be conducted by one arbitrator
who is a member of the American Arbitration Association (AAA) or of the Judicial Arbitration and
Mediation Services (JAMS). The arbitration shall be held in Orange County, California. The
arbitrator shall have all authority to determine the arbitrability of any claim and enter a final
and binding judgment at the conclusion of any proceedings in respect of the arbitration.
Notwithstanding any rule of AAA or JAMS to the contrary, the provisions of Title 9 of Part 3 of

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the CCC including Section 1283.05, and successor statutes, permitting expanded discovery
proceedings shall be applicable to all disputes that are arbitrated under this paragraph. The
arbitrator shall have all power and authority to enter orders relating to such discovery as are
allowed under the CCC. The party prevailing in the resolution of any such claim will be entitled,
in addition to such other relief as may be granted, to an award of all fees and costs incurred in
pursuit of the claim (including reasonable attorneys’ fees) without regard to any statute,
schedule, or rule of court purported to restrict such award.

5. At-Will Employment. Notwithstanding anything to the contrary herein, Employee reaffirms
that Employee’s employment relationship with the Company is at-will, terminable at any time and for
any reason by either the Company or Employee. While certain paragraphs of this Agreement describe
events that could occur at a particular time in the future, nothing in this Agreement may be
construed as a guarantee of employment of any length.

6. General Provisions.

     6.1 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California, without regard to conflict-of-law principles.

     6.2 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns. Employee may not
assign, pledge or encumber his interest in this Agreement or any part thereof, provided, however,
that the provisions of this Agreement shall inure to the benefit of, and be binding upon Employee’s
estate.

     6.3 No Waiver of Breach. If either party should waive any breach of any provisions of
this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this Agreement. The rights granted the parties are
cumulative, and the election of one will not constitute a waiver of such party’s right to assert
all other legal and equitable remedies available under the circumstances.

     6.4 Severability. The provisions of this Agreement are severable, and if any
provision will be held to be invalid or otherwise unenforceable, in whole or in part, the remainder
of the provisions, or enforceable parts of this Agreement, will not be affected.

     6.5 Entire Agreement; Amendment. This Agreement, including Exhibit A, constitutes the
entire agreement of the parties with respect to the subject matter of this Agreement, and
supersedes all prior and contemporaneous negotiations, agreements and understandings between the
parties, oral or written, except those provisions of the Employment Agreement expressly referred to
herein. This Agreement may be amended or supplemented only by writing signed by both of the
parties hereto.

     6.6 Modification; Waivers. No modification, termination or attempted waiver of this
Agreement will be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.

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     6.7 Duplicate Counterparts. This Agreement may be executed in duplicate counterparts;
each of, which shall be deemed an original; provided, however, such counterparts shall together
constitute only one instrument.

     6.8 Interpretation. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. As
used in this Agreement, words of the masculine gender shall mean and include corresponding neuter
words or words of the feminine gender.

     6.9 No Mitigation. No payment to which Employee is entitled pursuant to Section 2.1
hereof shall be reduced by reason of compensation or other income received by him for services
rendered after termination of his employment with the Company.

     6.10 Withholding of Taxes. The Company shall withhold appropriate federal, state,
local (and foreign, if applicable) income and employment taxes from any payments hereunder.

     6.11 Drafting Ambiguities; Representation by Counsel. Each party to this Agreement
and its counsel have reviewed and revised this Agreement and the Release. The rule of construction
that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement, the Release or any of the amendments to this Agreement.

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     In witness whereof, this Change of Control Agreement has been executed as of the date first
set forth above.

	 	 	 	 	 	 	 

	 

	 	AVANIR Pharmaceuticals

	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Employee	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	 
	 	 	(Print Name)	 	 

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EXHIBIT
A

GENERAL RELEASE

     This General Release (“Release”) is entered into effective as of __________ __, 200_,
(the “Effective Date”) by and between Avanir Pharmaceuticals, a California corporation,
having its principal offices at 101 Enterprise, Suite 300, Aliso Viejo, CA 92656 (the
“Company”) and ______________, an individual residing at ______________
(“Employee”) with reference to the following facts:

RECITALS

     A. The parties hereto entered into a Change of Control Agreement dated _________ __, 200_
(“Agreement”), by which the parties agreed that in certain circumstances Employee would
become eligible for severance payments following a termination of service in connection with a
Change of Control and the reimbursement of certain insurance premiums in exchange for Employee’s
release of the Company from all claims which Employee may have against the Company.

     B. The parties desire to dispose of, fully and completely, all claims that Employee may have
against the Company in the manner set forth in this Release.

AGREEMENT

     1. Release. Employee, for himself/herself and his heirs, successors and assigns,
fully releases, and discharges Company, its officers, directors, employees, shareholders,
attorneys, accountants, other professionals, insurers and agents (collectively “Agents”),
and all entities related to each such party, including, but not limited to, heirs, executors,
administrators, personal representatives, assigns, parent, subsidiary and sister corporations,
affiliates, partners and co-venturers (collectively “Related Entities”), from all rights,
claims, demands, actions, causes of action, liabilities and obligations of every kind, nature and
description whatsoever, Employee now has, owns or holds or has at anytime had, owned or held or may
have against the Company, Agents or Related Entities from any source whatsoever, whether or not
arising from or related to the facts recited in this Release. Employee specifically releases and
waives any and all claims arising under any express or implied contract, rules, regulation or
ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans with Disabilities Act, the California Fair Employment and Housing
Act, and the Age Discrimination in Employment Act, as amended (“ADEA”).

     2. Section 1542 Waiver. This Release is intended as a full and complete release and
discharge of any and all claims that Employee may have against the Company, Agents or Related
Entities. In making this release, Employee intends to release the Company, Agents and Related
Entities from liability of any nature whatsoever for any claim of damages or injury or for
equitable or declaratory relief of any kind, whether the claim, or any facts on which such claim
might be based, is known or unknown to Employee. Employee expressly waives all rights under §1542
of the Civil Code of the State of California, which Employee understands provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

     Employee acknowledges that he may discover facts different from or in addition to those that
he now believes to be true with respect to this Release. Employee agrees that this Release shall
remain effective notwithstanding the discovery of any different or additional facts.

     3. Waiver of Certain Claims. Employee acknowledges that he has been advised in
writing of his right to consult with an attorney prior to executing the waivers set out in this
Release, and that he has been given a 21-day period in which to consider entering into the release
of ADEA claims, if any. In addition, Employee acknowledges that he has been informed that he may
revoke a signed waiver of the ADEA claims for up to 7 days after executing this Release.

     4. No Undue Influence. This Release is executed voluntarily and without any duress or
undue influence. Employee acknowledges he has read this Release and executed it with full and free
consent. No provision of this Release shall be construed against any party by virtue of the fact
that such party or its counsel drafted such provision or the entirety of this Release.

     5. Governing Law. This Release is made and entered into in the State of California
and accordingly the rights and obligations of the parties hereunder shall in all respects be
construed, interpreted, enforced and governed in accordance with the laws of the State of
California as applied to contracts entered into by and between residents of California to be wholly
performed within California.

     6. Severability. If any provision of this Release is held to be invalid, void or
unenforceable, the balance of the provisions of this Release shall, nevertheless, remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     7. Counterparts. This Release may be executed simultaneously in one or more
counterparts, each of, which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Release may be executed by facsimile, with originals
to follow by overnight courier.

     8. Dispute Resolution Proceedings. Any dispute or claim arising out of this Release
shall be subject to final and binding arbitration. The arbitration will be conducted by one
arbitrator who is a member of the American Arbitration Association (AAA) or of the Judicial
Arbitration and Mediation Services (JAMS) and will be governed by the Model Employment Arbitration
rules of AAA. The arbitration shall be held in Orange County, California. The arbitrator shall
have all authority to determine the arbitrability of any claim and enter a final and binding
judgment at the conclusion of any proceedings in respect of the arbitration. Any final judgment
only may be appealed on the grounds of improper bias or improper conduct of the arbitrator.
Notwithstanding any rule of AAA or JAMS to the contrary, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure (the “CCC”) including Section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all disputes

 

that are arbitrated under this paragraph. The arbitrator shall have all power and authority to
enter orders relating to such discovery as are allowed under the CCC. The party prevailing in the
resolution of any such claim will be entitled, in addition to such other relief as may be granted,
to an award of all fees and costs incurred in pursuit of the claim (including reasonable attorneys’
fees) without regard to any statute, schedule, or rule of court purported to restrict such award.

     9. Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter of this Agreement, and supersedes all prior and contemporaneous
negotiations, agreements and understandings between the parties, oral or written.

     10. Modification; Waivers. No modification, termination or attempted waiver of this
Agreement will be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.

     11. Amendment. This Agreement may be amended or supplemented only by writing signed
by Employee and the Company.

	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 
	 

	 	 

	 	 

Employee Name

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