Document:

allk-ex101_46.htm

 

Exhibit 10.1

Allakos Inc.

 

April 15th, 2021

 

H. Baird Radford, III

 

Dear Baird,

 

We are pleased to confirm your offer of employment with Allakos, Inc. (“the Company”) as Chief Financial Officer. You will be a Regular, Full Time Exempt employee, reporting to Adam Tomasi, President & Chief Operating Officer or as otherwise directed. Subject to all conditions in this offer letter, your employment will begin on April 19th, 2021 (“Start Date”).

 

Your position is based in Redwood City, CA. You will be invited to attend virtual onboarding on your Start Date. You are required to comply with all operating policies, procedures, and practices of the Company in effect during your employment. 

 

By signing this offer letter, you confirm that you are under no contractual or other legal obligations that would prohibit you from performing your duties with the Company.

 

Compensation: Your initial compensation will be $464,000 per year (“Annual Base Salary”), payable semi-monthly, less all applicable withholdings, and subject to, among other things, your continued employment with the Company.

 

Target Bonus: You will be eligible to receive additional compensation in the form of a bonus of up to 40% of your annual base salary, which exact amount will be based upon the achievement by the Company and you of certain milestones. Bonuses are payable at the discretion of the Board.

 

Equity Awards: Subject to the approval of the Company’s Board of Directors, you will be given an option to purchase 27,600 shares of the Company’s common stock.  The option will be subject to the terms and conditions applicable to options granted under the Company’s 2018 Equity Incentive Plan (the “EIP”), as described in that plan and the applicable stock option agreement (the “Option Agreement”), which you will be required to sign. You will vest 1/4th of the option shares on the twelve-month anniversary of your vesting commencement date and 1/48th of the total option shares will vest each month thereafter during continuous service, as described in the Option Agreement.  The exercise price per share will be equal to the fair market value per share on the date the option is granted, as determined by the closing sales price of the Company’s common stock on the date of grant. 

 

In addition, you will be granted 17,100 restricted stock units (the “RSUs”), with each unit representing the right to receive one share of the Company’s common stock. The RSUs will be subject to the terms and conditions of the Company’s EIP and applicable restricted stock unit agreement (the “RSU Agreement”). You will vest 1/4 of the RSUs on or about the twelve-month anniversary of your vesting commencement date and 1/16th of the RSUs will vest each quarter thereafter during continuous service. This vesting schedule is subject to change according to the Company's EIP. The final vesting schedule for your RSUs will be included in the RSU Agreement, which you will be required to sign.

 

Please note that the terms of the Option Agreement and RSU Agreement, and not this letter, will control 

 

with respect to your awards, to the extent there are differences.

 

At-Will Employment: The Company’s policy is that employment is “at-will.” You are free to leave the Company at any time, with or without a reason and with or without notice. The Company also has the right to end your employment at any time, with or without a reason and with or without notice. Although the Company may choose to end your employment for a cause, cause is not required. Further, the Company has the right to manage its work force and direct its employees. This includes the right to hire, transfer, promote, demote, reclassify, lay off, terminate, or change any term or condition of employment at any time, with or without a reason and with or without notice unless otherwise required by law. No individual other than the Chief Executive Officer of the Company may enter into an agreement for employment for a specific period of time or make any agreement contrary to the policy of at-will employment. Any such agreement must be in writing signed by both you and the Chief Executive Officer of the Company. By accepting this offer, you acknowledge that the Company has made no promises inconsistent with this paragraph.

 

Documentation: To comply with applicable laws you must complete an Employee Eligibility Form (I-9) and provide proof of identity and authorization to work in the United States. You must provide the Company with such documentation within three (3) business days of your Start Date, or your employment may be terminated.

 

Benefits: As a Regular Full-Time Employee, you will be eligible for the Company’s standard benefits, including health, dental, vision, disability insurance and retirement plans, subject to the requirements of each respective benefit plan. The effective date of benefits will be the first of the month following date of hire. All benefit plans are subject to modification or termination at the discretion of the Company.

 

Paid Time Off: The Company believes that taking time off is valuable for employees not only to make your work experience personally satisfying but also to enhance productivity and promote a healthy work-life balance. You will be eligible for paid holidays, sick and vacation time off according to the requirements of each respective policy.

 

Competition: While you are employed with the Company, you will not assist any person or organization in competing with the Company, in preparing to compete with the Company, or in hiring any employees of the Company. 

 

Confidential Information and Invention Assignment Agreement: The Company requests that you sign the enclosed At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement.

 

Entire Agreement: This letter supersedes any prior representations, understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. This letter may not be modified or amended except by written agreement, signed by the Chief Executive Officer of the Company and you.

We look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me.

 

This offer expires if not signed and returned to Allakos by 5:00 p.m. on Friday, April 16th ,2021.

Very truly yours,

 

ALLAKOS INC.

 

/s/ Adam Tomasi

 

Adam Tomasi, PhD

President & Chief Operating Officer

 

 

 

I accept employment with Allakos Inc. on the terms set forth above. I understand that this offer letter does not constitute a contract of employment for any specified period of time, and that either party may terminate the employment relationship at any time with or without notice.

 

/s/ H. Baird Radford, III

 

H. Baird Radford, III

 

Dated April 16, 2021exhibit101q12021

ACTIVE/107588993.4      Page 1 of 17    EMPLOYMENT AGREEMENT  THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the  eighteenth (18th) day of March 2021 by and among Richard Kim, currently residing at 16  Fairway Drive, West Windsor, NJ 08550 (the “Executive”), and Avadel Management  Corporation, a Delaware corporation with a principal office located at 16640 Chesterfield  Grove Road, Suite 200, Chesterfield, Missouri 63005 (the “Company”).  The Company is  an indirect wholly owned subsidiary of Avadel Pharmaceuticals plc, an Irish public limited  company with a principal office located at Ten Earlsfort Terrace, Dublin 2, D02 T380  Ireland (“Avadel plc”).    W I T N E S S E T H  WHEREAS, the Executive began his employment with the Company as of  February 15, 2021 (the “Effective Date”), and the Executive and the Company wish to set  forth in this Agreement the terms of such employment.  NOW, THEREFORE, in consideration of the mutual agreements and  covenants set forth herein, and for other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally  bound, hereby agree as follows:  1. EMPLOYMENT TERMS  1.1 Position.  (a) Positions.  The Executive shall serve as the Chief Commercial Officer of  Avadel plc and will be employed by the Company as the Chief Commercial Officer, and  shall carry out such work as may be reasonably required by the Company in connection  with the business of Avadel plc and the Company consistent with such positions and the  terms and conditions of this Agreement.    The Executive will devote substantially all of  the Executive’s business time, attention and efforts to Avadel plc and the Company and  during such time the Executive will make the best use of his energy, knowledge and  training for the purpose of advancing the interests of Avadel plc and the Company.  Except  as may be otherwise expressly authorized in writing by the Chief Executive Officer of  Avadel plc, during his employment with the Company the Executive will accept no other  employment nor serve as an officer, director or principal of any other company or  organization (other than a member of the Avadel Group of Companies (as hereinafter  defined).  Notwithstanding the foregoing, the Executive may engage in religious, charitable  or other community activities (which may include service as a board member of a  religious, charitable or other not-for-profit organization) as long as such activities do not  interfere with the Executive’s performance of his duties to or with respect to Avadel plc  and each of its direct or indirect subsidiaries including the Company (collectively, the  “Avadel Group of Companies”).  The Executive will comply with all written policies of  the Avadel Group of Companies to the extent applicable to the Executive.  

 

ACTIVE/107588993.4      Page 2 of 17    (b) Reporting.  Executive shall report directly to the Company’s Chief  Executive Officer, currently Gregory J. Divis.   1.2 Duration.  The duration of the Executive’s employment commenced as  of the Effective Date and shall continue under the terms and condition of this Agreement,  for one (1) year following the Effective Date, with this Agreement automatically renewing  thereafter for successive periods of one (1) year unless the Executive or the Company  provides written notice to the other of his or its intention not to renew the Agreement at  least thirty (30) days prior to the next upcoming expiration date.  Notwithstanding the  foregoing, this Agreement and the Executive’s at-will employment hereunder may be  terminated at any time pursuant to Section 3.1 hereof.  At the termination of this  Agreement, the Executive’s employment with the Company shall terminate  simultaneously.  2. COMPENSATION; BENEFITS  2.1 Base Salary.  The Company shall pay to the Executive a gross annual  base salary of Four Hundred and Twenty-Five Thousand Dollars ($425,000) per year, paid  on a semi-monthly basis and subject to ordinary and lawful deductions.  The Company will  review the Executive’s base salary on or about the first of every calendar year, and, in the  Company’s sole discretion, make any increases that the Company deems warranted.  If the  Executive’s base salary is increased, the new increased base salary will be the base salary  for purposes of this Agreement.  2.2 Bonus.  The Executive shall be eligible for a potential annual bonus with  a target payout of no less than forty-five percent (45%) of the Executive’s base salary  based upon the Executive’s achievement of certain business and individual performance  objectives as well as the performance of Avadel plc against its objectives as determined by  the Company.  Subject to the requirement that the Executive shall be employed by a member  of the Avadel Group of Companies on the date that the bonus is deemed earned by the  Compensation Committee of the Board of Directors of Avadel plc (the “Board”), any bonus  payments due hereunder shall be paid to the Executive no later than March 15 of the calendar  year following the applicable year to which the annual bonus relates, subject to ordinary and  lawful deductions.  2.3 Stock Options and Additional Equity Grants. In connection with the  commencement of his employment, the Executive has been awarded three hundred and  fifty thousand (350,000) stock options that will vest pursuant to the terms of the applicable  stock option agreement and the Avadel plc 2020 Omnibus Incentive Compensation Plan  (together, the “Equity Documents”). The Executive will also be eligible to participate in  future equity awards which may be granted to executive management, based upon  Company and individual performance, at the sole discretion of the Board.  2.4 Insurance and Benefits.  (a) Plan Participation.  The Company shall facilitate the participation by the  Executive and his family in medical, health, vision, dental, hospitalization, term life, and  

 

ACTIVE/107588993.4      Page 3 of 17    workers compensation insurance, long-term disability, short-term disability, and 401k  savings plan programs of the Company, to the extent now existing or hereafter established,  that are generally made available to executives or employees of the Company, in each case  according to the terms and conditions (including eligibility requirements) of such plans or  programs.  Under current policies, the Company pays 85% annually toward employee  medical (United Healthcare) coverage, plus 70% of dependent medical coverage; 85%  employee coverage for dental insurance (Principal); optional vision coverage (Eyemed);  and a $1000 annual corporate contribution to a health savings account (HSA) (if such  medical insurance is elected).  The Executive acknowledges that the current insurance  plans and Company policies are subject to changes at the business discretion of the  Company.  (b) Vacation and Paid Time Off.  The Executive shall be eligible for  vacation of twenty (20) days per year which shall be accrued or earned each month.  The  Executive shall also be entitled to the Company’s usual and customary holidays, including  two (2) floating holidays per year and corporate holidays (of which there are twelve (12)  scheduled during 2021) to be taken in accordance with the normal Company paid vacation  and time-off policies. The Company also grants the Executive five (5) sick days annually.  (c) Indemnification; General Liability.  (i) To the fullest extent permitted by applicable law, the Company, its  receiver, or its trustee shall indemnify, defend, and hold the Executive  harmless from and against any expense, loss, damage, or liability incurred or  connected with any claim, suit, demand, loss, judgment, liability, cost, or  expense (including reasonable attorneys’ fees) arising from or related to the  services performed by him under the terms of this Agreement and amounts  paid in settlement of any of the foregoing; provided that the same were not the  result of the Executive’s fraud, gross negligence, or reckless or intentional  misconduct.  The Company may advance to the Executive the costs of  defending any claim, suit, or action against him if he undertakes to repay the  funds advanced, with interest, should it later be determined that he is not  entitled to indemnification under this Section 2.4(c); provided, however, and  notwithstanding the foregoing, this sentence shall not apply to the defense of  any claim that may be brought by the Company or any of the Avadel Group of  Companies against the Executive.  (ii) The Company shall provide coverage to the Executive for his  general liability, director and officer liability, and professional liability  insurance at the same levels and on the same terms as provided to its other  executive officers.  2.5 Reimbursement of Expenses.  The Company shall reimburse the  Executive, subject to presentation of adequate substantiation, including receipts, for the  reasonable travel, entertainment, lodging and other business expenses incurred by the  Executive in accordance with the Company’s expense reimbursement policy in effect at the  time such expenses are incurred. In no event will such reimbursements, if any, be made  

 

ACTIVE/107588993.4      Page 4 of 17    later than the last day of the year following the year in which the Executive incurs the  expense.  3. TERMINATION AND SEVERANCE  3.1 Termination.  (a) Nothing in this Agreement shall prevent the Company from terminating  the Executive’s employment with the Company and this Agreement at any time, with or  without “Cause.”  “Cause” means: (i) conviction of the Executive of, or the Executive’s  plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud, theft, or  misappropriation by the Executive of any asset or property of any member of the Avadel  Group of Companies, including, without limitation, any theft or embezzlement or any  diversion of any corporate opportunity; (iii) breach by the Executive of any of the material  obligations contained in this Agreement; (iv) conduct by the Executive materially contrary  to the material policies of any member of the Avadel Group of Companies; (v) material  failure by the Executive to meet the goals and objectives established by any member of the  Avadel Group of Companies; provided that the Executive has failed to cure such failure  within a reasonable period of time after written notice to him regarding such failure; or (vi)  conduct by the Executive that results in a material detriment to any member of the Avadel  Group of Companies, or its program, or goals or that is inimical to its reputation and  interest; provided that the Executive has failed to cure such failure within a reasonable  period of time after written notice to him regarding such conduct.  Any reoccurrence of  such acts constituting Cause within one (1) year of the original occurrence will require no  such pre-termination right of the Executive to cure.   (b) The Executive may terminate the Executive’s employment with the  Company and this Agreement for or other than for “Good Reason”. “Good Reason” means,  without the Executive’s consent, any of the following: (i) the Company’s diminution in the  Executive’s authority, duties or responsibilities with respect to Avadel plc or the Company  in any material respect or the Company’s assignment to the Executive of duties or  responsibilities that are materially inconsistent with the Executive’s position with Avadel  plc or the Company as stated in this Agreement; (ii) a change in the location of the  Executive’s employment which increases the Executive’s one-way commute by more than  sixty (60) miles; or (iii) a material breach by the Company of this Agreement.    (c) In the event that the Executive desires to resign from the Company, he  shall promptly give the Company written notice of the date that such resignation will be  effective, provided that the notice period shall be no less than thirty (30) days; provided  further, that the Company may unilaterally accelerate the date of termination and such  acceleration shall not result in a termination by the Company for purposes of this  Agreement.  In the event that the Executive desires to resign from the Company for Good  Reason, he shall provide the Company with written notice setting forth the acts  constituting Good Reason within ninety (90) days of the initial occurrence of the Good  Reason condition and providing that the Company may cure such acts within thirty (30)  days of receipt of such notice.  If such condition is not remedied within such thirty- (30-)  

 

ACTIVE/107588993.4      Page 5 of 17    day cure period, any termination of employment by the Executive for “Good Reason” must  occur within ninety (90) days after the period for remedying such condition has expired.    (d) In the event that the Company desires to terminate the Executive’s  employment, with or without Cause, the Company shall give the Executive written notice  thereof, and the termination shall be effective as of the date specified in the written notice.  (e) The Executive’s employment and this Agreement shall terminate  automatically upon the Executive’s death.  If the Company determines that the Executive is  subject to an Incapacity (as hereinafter defined), the Company may terminate the  Executive’s employment and this Agreement effective upon the Executive’s Incapacity.   “Incapacity” shall mean the inability of the Executive to perform the essential functions of  the Executive’s job, with or without reasonable accommodation, for a period of 90 days in  the aggregate in any 180-day period.   (f) If the Executive’s employment is terminated for any reason, the  Company shall pay to the Executive (or, after the Executive’s death, his estate) any  accrued or awarded but unpaid annual bonus and accrued but unused vacation pay, expense  reimbursement and other benefits due to the Executive under any Company-provided  benefit plans, policies and arrangements, with such accrued but unpaid annual bonus and  vacation pay and expense reimbursements payable no later than thirty (30) days after the  date of termination of employment (sooner to the extent required by applicable law or to  the extent the bonus is payable prior to such time) and any other benefits payable in  accordance with the applicable terms of the benefit plans, policies and arrangements.  The  payments in this Section 3.1(f) are collectively referred to as the “Accrued Obligations.”  3.2 Severance.  If the Executive terminates this Agreement and his  employment with the Company for Good Reason or if the Executive’s employment with  the Company is terminated by the Company without Cause or by non-renewal of this  Agreement by the Company, the Company shall pay severance to the Executive as follows:  (i) severance pay in an amount equal to 1.0 times the  Executive’s then-current annual base salary, such amount to be  paid in a one-time installment; and  (ii) if the Executive elects continuation coverage pursuant to  the Consolidated Omnibus Budget Reconciliation Act of 1985, as  amended (“COBRA”), then the Company each month will pay for  the Executive’s COBRA premiums for such coverage (at coverage  levels in effect immediately prior to the Executive’s termination)  until the earlier of: (A) the expiration of a period of twelve (12)  months from the date of termination or (B) the date upon which the  Executive becomes covered under similar plans of any subsequent  employer or is otherwise ineligible for COBRA; provided,  however, if the Company determines that it cannot pay such  amounts to the group health plan provider or the COBRA provider  (if applicable) without potentially violating applicable law  

 

ACTIVE/107588993.4      Page 6 of 17    (including, without limitation, Section 2716 of the Public Health  Service Act), then the Company shall convert such payments to  payroll payments directly to the Executive for the time period  specified above.  Such payments shall be subject to applicable tax- related deductions and withholdings and paid on the Company’s  regular payroll dates.  All payments and benefits set forth in the foregoing items (i) and (ii) hereof are defined as  the “Severance Pay and Benefits.”  The Executive’s receipt of the foregoing Severance Pay  and Benefits is conditioned upon his execution and delivery to the Company of a  separation and release agreement acceptable to the Company governing the termination of  the employment relationship between the Executive and the Company and the Executive’s  release of all claims against all members of the Avadel Group of Companies and their  employees, officers, directors, contractors and other related persons (the “Separation and  Release Agreement”), and allowing the applicable revocation period required by law to  expire without revoking or causing revocation of same, within the time period set forth in  the Separation and Release Agreement and in no event more than sixty (60) days following  the date of termination of the Executive’s employment.  The amounts payable under this  Section 3.2, to the extent taxable, shall be paid or commence to be paid within 60 days  after the Executive’s date of termination; provided, however, that if the 60-day period  spans more than one calendar year, any payments that the Executive is entitled to receive  during such period shall be accumulated and paid in a lump sum only in the subsequent  calendar year.  3.3 Change of Control.    (a) If the Executive terminates this Agreement and his employment with the  Company for Good Reason or if the Executive’s employment with the Company is  terminated by the Company without Cause or by non-renewal of this Agreement by the  Company, and such termination occurs during a Change of Control Period (as hereinafter  defined), then, in addition to the Executive being eligible for the Severance Pay and  Benefits, subject to the terms of Section 3.2 above, and notwithstanding any other  provision in any applicable equity compensation plan and/or individual stock option plan  or agreement, the Executive’s outstanding and vested stock options as of the Executive’s  termination of employment date will remain exercisable until the eighteen (18) month  anniversary of the termination of employment date; provided, however, that the post- termination exercise period for any individual stock option right will not extend beyond its  original maximum term as of the original date of the grant (the “Extended Exercise  Period”).  (b) The Executive’s receipt of the foregoing Extended Exercise Period is  conditioned upon his execution and delivery to the Company of the Separation and Release  Agreement within the time period set forth in the Separation and Release Agreement and in  no event more than sixty (60) days following the date of termination of the Executive’s  employment.   

 

ACTIVE/107588993.4      Page 7 of 17    3.4 Change of Control Definitions.  For purposes of Section 3.3 above, the  following definitions shall apply:   (a) “Change of Control” means the occurrence of any of the following  events:   (i) a change in the ownership of Avadel plc, Avadel  US Holdings, Inc. or the Company which occurs on the date  that any one person, or more than one person acting as a  group (“Person”), acquires ownership of equity interests of  Avadel plc, Avadel US Holdings, Inc. or the Company that,  together with the other equity interests held by such Person,  constitute more than fifty percent (50%) of the total voting  power of the equity interests of Avadel plc, Avadel US  Holdings, Inc. or the Company (as applicable); provided,  however, that for purposes of this subsection, the acquisition  of additional equity interests by any one Person, who is  considered to own more than fifty percent (50%) of the total  voting power of the equity interests of Avadel plc, Avadel  US Holdings, Inc. or the Company (as applicable) will not be  considered a Change or Control; or   (ii) a change in the effective control of Avadel plc,  Avadel US Holdings, Inc. or the Company which occurs on  the date that a majority of the members of the Board of  Directors of Avadel plc, Avadel US Holdings, Inc. or the  Company (as applicable) is replaced during any twelve (12)  month period by directors whose appointment or election is  not endorsed by a majority of the members of the Board of  Directors of Avadel plc, Avadel US Holdings, Inc. or the  Company (as applicable) prior to the date of the appointment  or election.  For purposes of this subsection (ii), if any  Person is considered to be in effective control of Avadel plc,  Avadel US Holdings, Inc. or the Company (as applicable),  the acquisition of additional control of Avadel plc, Avadel  US Holdings, Inc. or the Company (as applicable) by the  same Person will not be considered a Change of Control; or   (iii) a change in the ownership of a substantial portion  of the assets of Avadel plc, Avadel US Holdings, Inc. or the  Company (as applicable) which occurs on the date that any  Person acquires (or has acquired during the twelve (12)  month period ending on the date of the most recent  acquisition by such person or persons) assets from Avadel  plc, Avadel US Holdings, Inc. or the Company (as  applicable) that have a total gross fair market value equal to  or more than fifty percent (50%) of the total gross fair  

 

ACTIVE/107588993.4      Page 8 of 17    market value of all of the assets of Avadel plc, Avadel US  Holdings, Inc. or the Company (as applicable) immediately  prior to such acquisition or acquisitions.    Notwithstanding the foregoing, the Change in Control must constitute a change in  ownership, effective control or substantial portion of the assets of Avadel plc, Avadel US  Holdings, Inc. or the Company (as applicable) within the meaning of Section 409A of the  Code.   (b)  “Change of Control Period” means the period ending eighteen (18)  months following a Change of Control.  3.5 Other Termination.  If the Executive terminates this Agreement and his  employment with the Company other than for Good Reason or by non-renewal of this  Agreement by the Executive, or if the Executive’s employment with the Company is  terminated by the Company for Cause or as the result of the Executive’s Incapacity, or the  Executive dies while employed by the Company, the Company shall pay to the Executive  the Accrued Obligations, but the Executive shall not be entitled to any further  compensation from the Company pursuant to this Agreement or otherwise.   3.6 Resignations.  Notwithstanding any other provision of this Agreement,  the Executive agrees to resign, as soon as administratively practicable, from any and all  positions held with all members of the Avadel Group of Companies, at the time of  termination of the Executive’s employment with any member of the Avadel Group of  Companies.  4. RESTRICTIVE COVENANTS  4.1 Confidentiality.    (a) Restriction.  To the fullest extent permitted under applicable law, at all  times during the Executive’s employment by the Company and for a period of five (5)  years after termination of the Executive’s employment with the Company, the Executive  (i) shall hold in strictest confidence all Restricted Information (as hereinafter defined), (ii)  shall not directly or indirectly use, copy, disclose or otherwise distribute any Restricted  Information, except for the benefit of a member of the Avadel Group of Companies to the  extent necessary to perform his obligations to Avadel plc and the Company under this  Agreement, and (iii) shall not disclose any Restricted Information to any person, firm,  corporation or other entity without written authorization of the Chief Executive Officer or  Board of Directors of Avadel plc.  Any breach of any provision of this Section 4.1(a) shall  be considered a material breach of this Agreement.  (b) Definitions.  As used in this Section 4, the following terms shall have the  meanings set forth below:  (i)  “Restricted Information” means any Confidential Information  (as hereinafter defined) and any Trade Secrets (as hereinafter defined).  

 

ACTIVE/107588993.4      Page 9 of 17    (ii)  “Confidential Information” means any information of or about  any member of the Avadel Group of Companies, and any of the employees,  customers and/or suppliers of any member of the Avadel Group of Companies,  which is not generally known outside of the Avadel Group of Companies,  which the Executive obtains (whether before, on or after the date of this  Agreement) in connection with the Executive’s employment with the  Company, and which may be useful to any competitor of the Avadel Group of  Companies or the disclosure of which would be damaging to any member of  the Avadel Group of Companies.  Confidential Information includes, but is not  limited to, any and all of the following information about any member of the  Avadel Group of Companies: (A) information about products, product  candidates, and research and development plans, activities and results  (including information about planned and in-process clinical trials); (B)  information about business and employment policies, marketing methods and  the targets of those methods, finances, business plans, promotional materials  and price lists; (C) the manner or terms upon which products or services are  obtained from suppliers or on which products or services are provided to  customers; (D) without duplication of item (A) above, the nature, origin,  composition, performance and development of any products or services; (E)  information about finances, financial condition, results of operations and  prospects; and (F) information about employees, consultants or customers or  suppliers.  For the avoidance of doubt, Confidential Information shall not  include information that (1) is or has been made generally available to the  public through the disclosure thereof in a manner that was authorized by the  Company and did not violate any common law or contractual right of the  applicable party; (2) is or becomes generally available to the public other than  as a result of a disclosure by the Executive in violation of the provisions  hereof; or (3) was already in the possession of the Executive without an  obligation of confidentiality prior to the date his employment with the  Company began.  (iii) “Trade Secret” means any Confidential Information to the  extent such information constitutes a trade secret under applicable law.    (c) Certain Permitted Disclosures.  Notwithstanding the foregoing, the  Executive will not be held criminally or civilly liable under any Federal or State trade  secret law for the disclosure of a Trade Secret that (i) is made (A) in confidence to a  Federal, State or local government official, either directly or indirectly, or to an attorney,  and (B) solely for purposes of reporting or investigating a suspected violation of law, or  (ii) is made in a complaint or other document filed in a lawsuit or other proceeding filed in  a lawsuit or other proceeding, if such filing is made under seal.  If the Executive files a  lawsuit for retaliation by the Company for reporting a suspected violation of law, the  Executive may disclose the Trade Secret to the Executive’s attorney and use the Trade  Secret in the court proceeding, if the Executive (i) files any document containing the Trade  Secret under seal and (ii) does not disclose the Trade Secret, except pursuant to court  order.  

 

ACTIVE/107588993.4      Page 10 of 17    4.2 Non-Solicitation of Employees and Contractors.  During the Executive’s  employment with the Company and for a period of one (1) year after the termination of the  Executive’s employment with the Company, the Executive shall not directly or indirectly  solicit or attempt to solicit any employee, consultant or other contractor of or service  provider to any member of the Avadel Group of Companies with whom the Executive had  Material Contact to perform services for the Executive or for any other business or entity,  whether as an executive, consultant, partner or participant in any such business or entity, or  to terminate or lessen any such employee’s, consultant’s or other contractor’s service with  any member of the Avadel Group of Companies.  “Material Contact” means contact in  person, by telephone, or by paper or electronic correspondence in furtherance of the  business of any member of the Avadel Group of Companies.  This Section 4.2 shall cease  to be applicable to any activity of the Executive from and after such time as all members of  the Avadel Group of Companies have ceased all business activities or have made a  decision to cease all business activities.  4.3 Non-Solicitation of Customers and Suppliers.  During the Executive’s  employment with the Company and for a period of one (1) year after the termination of the  Executive’s employment with the Company, the Executive shall not directly or indirectly  solicit any actual or prospective customers or suppliers of any member of the Avadel  Group of Companies with whom the Executive had material contact, for the purpose of  selling any products or services which compete with the business of any member of the  Avadel Group of Companies. This Section 4.3 shall cease to be applicable to any activity  of the Executive from and after such time as all members of the Avadel Group of  Companies have ceased all business activities or have made a decision to cease all business  activities.  4.4 Relief.  The Executive agrees that it would be difficult to measure any  damages caused to the Company that might result from any breach by the Executive of any  portion of Sections 4.1 through 4.3, and that in any event money damages would be an  inadequate remedy for any such breach.  Accordingly, the Executive agrees that if the  Executive breaches, or proposes to breach, any portion of Section 4.1 through 4.3, the  Company shall be entitled, in addition to all other remedies that it may have, to an  injunction or other appropriate equitable relief to restrain any such breach without showing  or proving any actual damage to the Company and without the posting of a bond.  4.5 Protected Rights.  Notwithstanding any other provision of this  Agreement, the Company and the Executive hereby acknowledge and agree that:  (i)  Nothing in this Agreement shall prohibit the Executive from  reporting possible violations of Federal, State or other law or regulations to, or  filing a charge or other complaint with, any governmental agency or entity,  including but not limited to the Department of Justice, the Equal Employment  Opportunity Commission, the National Labor Relations Board, the  Occupational Safety and Health Administration, the Securities and Exchange  Commission, Congress, and any Inspector General, or making any other  disclosures that are protected under any whistleblower provisions of Federal,  State or other law or regulation or assisting in any such investigation or  

 

ACTIVE/107588993.4      Page 11 of 17    proceeding.  (ii)  Nothing herein limits the Executive’s ability to communicate  with any such governmental agency or entity or otherwise participate in any  such investigation or proceeding that may be conducted by any such  governmental agency or entity, including providing documents or other  information, without notice to the Company.   (iii)  The Executive does not need the prior authorization of the  Company to make any such reports or disclosures, and the Executive is not  required to notify the Company that the Executive made any such reports or  disclosures or is assisting in any such investigation.    (iv)  The Executive (A) does not waive any rights to any individual  monetary recovery or other awards in connection with reporting any such  information to any such governmental agency or entity, (B) does not breach  any confidentiality or other provision hereunder in connection with any such  reporting or disclosures, and (C) will not be prohibited from receiving any  amounts hereunder as the result of making any such reports or disclosures or  assisting with any such investigation or proceeding.    5. MISCELLANEOUS  5.1 Entire Agreement.  This Agreement (including any exhibits hereto)  supersedes any and all other understandings and agreements, either oral or in writing,  among the parties (including affiliates of the Company) with respect to the subject matter,  including without limitation the offer letter dated November 23, 2020, and constitutes the  sole agreement among the parties with respect to the subject matter hereof; provided,  however, and notwithstanding the foregoing, the Equity Documents and any  confidentiality or nondisclosure agreements between the Company and the Executive shall  remain in full force and effect.  5.2 Severability.  If any term or provision of this Agreement or any  application of this Agreement shall be declared or held invalid, illegal, or unenforceable, in  whole or in part, whether generally or in any particular jurisdiction, such provision shall be  deemed amended to the extent, but only to the extent, necessary to cure such invalidity,  illegality, or unenforceability, and the validity, legality, and enforceability of the remaining  provisions, both generally and in every other jurisdiction, shall not in any way be affected  or impaired thereby.  5.3 Survival.  Notwithstanding any expiration or termination of this  Agreement, Section 2.4(c) hereof, Section 4 hereof and this Section 5 shall survive such  expiration or termination to the extent necessary to effectuate the terms contained herein.  5.4 Interpretation of Agreement.  (a) Unless otherwise indicated to the contrary herein by the context or use  thereof: (i) the words, “herein,” “hereto,” “hereof,” and words of similar import refer to  

 

ACTIVE/107588993.4      Page 12 of 17    this Agreement as a whole and not to any particular Article, Section, subsection, or  paragraph hereof; (ii) words importing the masculine gender shall include the feminine and  neuter genders and vice versa; and (iii) words importing the singular shall include the  plural, and vice versa.  (b) All parties to this Agreement have participated in the drafting and  negotiation of this Agreement.  This Agreement has been prepared by all parties equally,  and is to be interpreted according to its terms.  No inference shall be drawn that the  Agreement was prepared by or is the product of any particular party or parties.  5.5 Taxes.    (a) The parties hereto acknowledge that the requirements of Section 409A of  the Internal Revenue Code (“Section 409A”) are still being developed and interpreted by  government agencies and that the parties hereto have made a good faith effort to comply  with current guidance under Section 409A.  Notwithstanding anything in this Agreement to  the contrary, in the event that amendments to this Agreement are necessary in order to  continue to comply with future guidance or interpretations under Section 409A, including  amendments necessary to ensure that compensation will not be subject to tax under Section  409A (which may require deferral of severance or other compensation), the Company and  the Executive agree to negotiate in good faith the applicable terms of such amendments  and to implement such negotiated amendments, on a prospective and/or retroactive basis as  needed.  Further, to the extent any amount or benefit under this Agreement is subject to the  requirements of Section 409A, then, with respect to such amount or benefit, this  Agreement will be interpreted in a manner to comply with the requirements of Section  409A.    (b) Further, a termination of employment shall not be deemed to have  occurred for purposes of any provision of this Agreement providing for the payment of any  amounts or benefits upon or as a result of a termination of employment unless such  termination is also a “separation from service” within the meaning of Section 409A and,  for purposes of any such provision of this Agreement, references to a “termination”,  “termination of employment”, “Termination Date”, or the like shall mean “separation from  service”.    (c) For purposes of this Agreement, all rights to payments and benefits  hereunder shall be treated as rights to receive a series of separate payments and benefits to  the fullest extent allowed by Section 409A of the Code.    (d) If the Executive is a key employee (as defined in Section 416(i) of the  Code without regard to paragraph (5) thereof) and any of Avadel’s securities are publicly  traded on an established securities market or otherwise, then payment of any amount or  provision of any benefit under this Agreement which is considered deferred compensation  subject to Section 409A of the Code shall be deferred for six (6) months after termination  of Executive’s employment or, if earlier, Executive’s death, if and as required by Section  409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”).  In the event such payments  are otherwise due to be made in installments or periodically during the 409A Deferral  

 

ACTIVE/107588993.4      Page 13 of 17    Period, the payments which would otherwise have been made in the 409A Deferral Period  shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,  and the balance of the payments shall be made as otherwise scheduled.  In the event  benefits are required to be deferred, any such benefit may be provided during the 409A  Deferral Period at the Executive’s expense, with the Executive having a right to  reimbursement from the Company once the 409A Deferral Period ends, and the balance of  the benefits shall be provided as otherwise scheduled.    (e) To the extent that some portion of the payments under this Agreement  may be bifurcated and treated as exempt from Code Section 409A under the “short-term  deferral” or “separation pay” exemptions, then such amounts shall be so treated as exempt  from Code Section 409A (and in particular, the earliest amounts to be paid under Section 3  of the Agreement will be first treated as exempt from Code Section 409A under the short- term deferral exemption and then the separation pay exemption to the extent available).    (f) Any reimbursements, in-kind benefits or offset provided under this  Agreement that constitutes deferred compensation under Code Section 409A shall be made  or provided in accordance with the requirement of Code Section 409A, including, where  applicable, the requirement that (i) any reimbursement is for expense incurred during the  period of time specified in this Agreement, (ii) the amount of expense eligible for  reimbursement, or in-kind benefits, provided during a calendar year may not affect the  expense eligible for reimbursement, or in-kind benefits to be provided, in any other  calendar year, (iii) the reimbursement of an eligible expense will be made no later than the  last day of the calendar year following the calendar in which the expense is incurred, and  (iv) the right to reimbursement or in-kind benefits is not subject to liquidation of exchange  for another benefit.  (g) The Company makes no warranty regarding the tax treatment to the  Executive of payments provided for under this Agreement, including the tax treatment of  such payments that may be subject to Section 409A.  The Executive will be responsible for  paying all federal, state, and local income and employment taxes that may be due on such  payment, provided that the Company will be responsible for any withholding obligations  under applicable law.  The Company will not be liable to the Executive if any payment or  benefit which is to be provided pursuant to this Agreement and which is considered  deferred compensation subject to Code Section 409A otherwise fails to comply with, or be  exempt from, the requirements of Code Section 409A.    5.6 Mandatory Reduction of Payments in Certain Events.  Anything in this  Agreement to the contrary notwithstanding, in the event it shall be determined that any  payment or distribution by the Company to or for the benefit of Executive (whether paid or  payable or distributed or distributable pursuant to the terms of this Agreement or  otherwise) (a “Payment”) would be subject to the excise tax (the “Excise Tax”) imposed by  Section 4999 of the Code, then, prior to the making of any Payment to Executive, a  calculation shall be made comparing (i) the net benefit to Executive of the Payment after  payment of the Excise Tax to (ii) the net benefit to Executive if the Payment had been  limited to the extent necessary to avoid being subject to the Excise Tax.  If the amount  calculated under (i) above is less than the amount calculated under (ii) above, then the  

 

ACTIVE/107588993.4      Page 14 of 17    Payment shall be limited to the extent necessary to avoid being subject to the Excise Tax  (the “Reduced Amount”).  In that event, cash payments shall be modified or reduced first  from the latest amounts to be paid and then any other benefits.  The determination of  whether an Excise Tax would be imposed, the amount of such Excise Tax, and the  calculation of the amounts referred to in clauses (i) and (ii) of the foregoing sentence shall  be made by an independent accounting firm selected by Company and reasonably  acceptable to the Executive, at the Company’s expense (the “Accounting Firm”), and the  Accounting Firm shall provide detailed supporting calculations.  Any determination by the  Accounting Firm shall be binding upon the Company and the Executive.  As a result of the  uncertainty in the application of Section 4999 of the Code at the time of the initial  determination by the Accounting Firm hereunder, it is possible that Payments which  Executive was entitled to, but did not receive pursuant to this Section 5.6 could have been  made without the imposition of the Excise Tax (“Underpayment”).  In such event, the  Accounting Firm shall determine the amount of the Underpayment that has occurred and  any such Underpayment shall be promptly paid by the Company to or for the benefit of the  Executive.    5.7 Governing Law.  Notwithstanding the place where this Agreement may  be executed by any of the parties hereto, the parties expressly agree that all of the terms  and provisions hereof shall be construed in accordance with and governed by the laws of  the State of Missouri, or, to the extent applicable the laws of the United States of America,  in each case without giving effect to the principles of choice or conflicts of laws thereof.   Each of the parties hereto consents and agrees to the exclusive personal jurisdiction of any  state or federal court sitting in the State of Missouri, and waives any objection based on  venue or forum non conveniens with respect to any action instituted therein, and agrees that  any dispute concerning the conduct of any party in connection with this Agreement shall  be heard only in the courts described above.  5.8 Binding Arbitration.  (a) All disputes arising under this Agreement or arising out of or relating to  the Executive’s employment relationship with the Company shall be submitted to final and  binding arbitration.  Arbitration of such matters shall proceed consistent with the  Employment Arbitration Rules and Mediation Procedures as established by the American  Arbitration Association (“AAA”).  Venue for any arbitration shall be St.  Louis, Missouri  or any other location mutually agreed upon by the Executive and the Company.  (b) The arbitration shall be conducted using the Expedited Procedures of the  AAA Rules, regardless of the amount in dispute.  (c) The disputing parties shall agree on an arbitrator qualified to conduct  AAA arbitration.  If the disputing parties cannot agree on the choice of arbitrator, then  each party shall choose one independent arbitrator.  The two arbitrators so chosen shall  jointly select a third arbitrator, who shall conduct the arbitration.  

 

ACTIVE/107588993.4      Page 15 of 17    (d) All disputes relating to this Agreement shall be governed by the laws of  the State of Missouri, and the arbitrator shall apply such law without regard to the  principles of choice or conflicts of laws thereof.  (e) All aspects of the arbitration shall be treated as confidential.  (f) The Company and the Executive shall each pay 50% of the arbitrator’s  fees and costs. Each party shall pay its own deposition, witness, expert, and attorneys’ fees  and other expenses to the same extent as if the matter were being heard in court.  However,  if any party prevails on a statutory claim that affords the prevailing party attorneys’ fees  and costs, or if there is a written agreement providing for attorneys’ fees and costs to be  awarded to the prevailing party, the arbitrator may award reasonable attorneys’ fees in  accordance with the applicable statute or written agreement.  The arbitrator shall resolve  any dispute as to the reasonableness of any fees or costs awarded under this paragraph.  (g) The decision of the arbitrator shall be final, and the parties agree to entry  of such decision as judgments in all courts of appropriate jurisdiction.  (h) Notwithstanding the foregoing, this Section 5.8 shall not preclude either  party from pursuing a court action for the sole purpose of obtaining a temporary restraining  order or a preliminary injunction in circumstances in which such relief is appropriate,  including, without limitation, relief sought under Section 4 of this Agreement; provided  that any other relief shall be pursued through an arbitration proceeding pursuant to this  Section 5.8.  5.9 Amendments.  This Agreement shall not be modified or amended except  by a writing signed by all of the parties.  5.10 Binding Effect.  This Agreement shall be binding upon and shall inure to  the benefit of the successors and assigns of each party hereto.  5.11 Assignment.  (a) This Agreement and all of the Executive’s rights and obligations  hereunder are personal to the Executive and may not be transferred or assigned by him at  any time, except that any assets accruing to the Executive in connection with this  Agreement shall accrue to the benefit of the Executive’s heirs, executors, administrators,  successors, permitted assigns, trustees, and legal representatives.  (b) The Company may assign its rights under this Agreement to any entity  that assumes the Company’s obligations hereunder in connection with a merger,  consolidation or sale or transfer of all or substantially all of the Company’s assets to such  entity; provided further, that the Company will require any successor to the Company in  the case of a merger, consolidation or sale or transfer of all or substantially all of the assets  of Avadel plc or the Company to assume this Agreement.  5.12 Waiver.  Any of the terms or conditions of this Agreement may be  waived at any time by the party or parties entitled to the benefit thereof, but only by a  

 

ACTIVE/107588993.4      Page 16 of 17    writing signed by the party or parties waiving such terms or conditions.  No waiver of any  provision of this Agreement or of any right or benefit arising hereunder shall be deemed to  constitute or shall constitute a waiver of any other provision of this Agreement (whether or  not similar), nor shall any such waiver constitute a continuing waiver, unless otherwise  expressly so provided in writing.  5.13 Counterparts.  This Agreement may be executed in counterparts, each of  which shall be deemed an original, but all of which together shall constitute one and the  same instrument.  Signatures on this Agreement may be conveyed by facsimile or other  electronic transmission and shall be binding upon the parties so transmitting their  signatures.  Counterparts with original signatures shall be provided to the other parties  following the applicable facsimile or other electronic transmission; provided, that failure to  provide the original counterpart shall have no effect on the validity or the binding nature of  this Agreement.  [Signature page follows] 

 

ACTIVE/107588993.4    IN WITNESS WHEREOF, the parties hereto have executed this Employment  Agreement as of the date and year first above written.  THE COMPANY  AVADEL MANAGEMENT CORPORATION  By:  ____________________________________  Name:  Gregory J. Divis  Title:  President  THE EXECUTIVE  ________________________________________  Name: Richard Kim

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