INSYS THERAPEUTICS, INC. (COMPANY) EMPLOYMENT OFFER STATEMENT AND AGREEMENT (OFFER STATEMENT)

POSITION:

Your title will be Executive Vice President and Chief Operating Officer (“COO”). During your employment, and excluding any periods of vacation and sick leave to which you are entitled, you agree to devote appropriate attention and time to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to you in your position, to use your best efforts to perform faithfully and efficiently such responsibilities, which include observing (and to use reasonable efforts to communicate, monitor and discipline those employees under your supervision to observe), the policies of the Company and applicable legal and regulatory requirements. This COO position will evolve as you integrate into the company but at all times the Sales and Marketing functions will report to this COO position. In addition, at the time of your hire the following positions will also report to the COO: VP, Corporate Development & Strategy, VP, Business Intelligence and Sales Operations, Director, Human Resources, and VP, Managed Markets. Among the COO duties, responsibilities and authority, you will be involved with all aspects of the Company’s regulatory and compliance matters related to your position as described above. You will report directly to the President and Chief Executive Officer (the “CEO”), and may be assigned such additional duties as may be determined by the CEO or the Company’s Board of Directors (the “Board”) from time to time.

RELOCATION:

You may work remotely from your home in Lake Forest, IL until June 30, 2017, provided that the Company will expect you to travel for business purposes related to your duties and there will be expectations for you to be present in the Company’s corporate offices on a regular basis during this time. By no later than June 30, 2017, you’ll relocate your primary residence to Arizona, and you will perform your duties primarily from the Company’s headquarters at 1333 South Spectrum Boulevard in Chandler, Arizona. You will be provided with a relocation package as outlined in the Employee Relocation and Repayment Agreement which is effective as of November 1, 2015.

ANNUAL BASE SALARY:

Your starting base salary is $350,000 (three hundred fifty thousand dollars) per annum paid on a bi-weekly basis, and is subject to deductions for taxes and other withholdings as required by law or the policies of the Company. Consistent with other members of executive management, your annual base salary will be reviewed annually and may be increased, but not decreased, from time to time in the sole discretion of the Compensation Committee of the Board as recommended by the CEO; provided, however, that if a reduction in COO’s base salary occurs in connection with a Company-wide decrease in executive compensation, such reduction shall be permissible.

BONUS ELIGIBILITY:

You will be eligible to participate in any incentive program of the Company adopted by the Board and/or the Compensation Committee of the Board that provides for the payment of annual performance-based cash bonuses to the Company’s similarly situated executives. Any cash bonus earned by you pursuant to any such program will be subject to standard payroll deductions and applicable tax withholdings. Except for circumstances related to the “Termination Payments” described below, in order to earn and receive any such cash bonus, you must remain employed by the Company as an employee in good standing through the end of the applicable calendar year and the payout date for the bonus; provided, however, that the payout date shall be no later than the date that the rest of the executive management team receives their similar bonus award, if any, which has typically occurred within 90 days of the end of the relevant bonus period but in no event later than 120 after the end of the relevant bonus period. For the fiscal year ending December 31, 2016, effective upon satisfactory completion of the first 90-days of employment, and based upon the goals and objectives agreed to in the performance development planning process, you are eligible for a bonus with a target of 50% (fifty percent) of your base salary (the “Target Bonus”), and with the potential for additional bonus payments for superior performance in excess of established performance criteria. Performance criteria shall be based on Company performance targets and individual performance targets, as approved by the Compensation Committee or full Board.

EQUITY:

In connection with the acceptance of this offer of employment, you will be granted stock options covering 250,000 (two hundred and fifty thousand) shares of the Company’s common stock. The grant date is expected to be the date of the next regularly scheduled meeting of the Board of Directors, with the exercise price being equal to the fair market value of the Company’s common stock on the grant date as determined by the Board at such meeting. On an ongoing basis, you will be eligible to participate in any employee stock option award program created by the Board and/or the Compensation Committee of the Board, in its sole discretion, that provides for the payment of equity based compensation to the Company’s employees (to the extent that such awards are granted by the Board of Directors).

STOCK GRANT:

You will also receive a grant of stock under the 2013 Equity Incentive Plan with an aggregate award value of $250,000 (“Stock Grant”). The Stock Grant will be 100% vested upon issuance. The number of shares of Company stock subject to the Stock Grant shall be equal to the quotient of $250,000, divided by the fair market value of the Company’s common stock as determined by the Board on the date the Stock Grant is approved (which shall be at the next regularly scheduled Board meeting), rounded down to the nearest whole share. The shares subject to the Stock Grant will be issued promptly after approval by the Board. The foregoing notwithstanding, the Company will automatically withhold shares from the shares issuable to you under the Stock Grant to satisfy the applicable tax withholding obligations that are due upon issuance of the Stock Grant to you.

SIGN-ON BONUS:

You will be provided with a sign-on bonus as outlined in the Conditional Sign-On Bonus Agreement effective as of November 1, 2015.

EXPENSES:

The Company shall pay, in an amount not to exceed $10,000 (Ten Thousand Dollars), directly or reimburse your reasonable legal fees incurred in connection with the development and review of this Agreement and related documents. You will be responsible for any legal fees you incur in connection with this Agreement and related documents in excess of $10,000. The Company will reimburse you for all reasonable business expenses you incur in conducting your duties, including expenses related to travel from Lake Forest, IL to the Company headquarters, subject to the Company’s usual expense reimbursement policies. The Company also will reimburse you for your actual housing related expenses in Arizona, from November 1, 2015 to June 30, 2017, in an amount up to a maximum of $3,500 per month. From November 1, 2015 to June 30, 2017, you also shall receivean automobile allowance of $1,000 per month.

PAID TIME OFF:

Vacation is accrued at 6.15 hours per pay period, which is equivalent to four (4) weeks on an annual basis. You will also have eight paid holidays and five personal/sick days. Please note that vacation time unused for the calendar year cannot be carried over into the next year. Upon termination of employment, you will not be paid for unused vacation or sick time unless otherwise required by state law.

HEALTH INSURANCE:

Assuming you commence employment on November 1, 2015, your health insurance coverage is effective on December 1, 2015. Company Sponsored group medical and dental health coverage will be provided to you consistent with the Company health insurance benefits plan in place and provided to other Company executives.

BENEFITS:

Life insurance in the amount of $100,000 (one hundred thousand dollars) is provided by the Company. Long term disability coverage, consistent with the Company benefits plan, shall be provided to you. These benefits are currently paid in full by the Company. You shall also be provided with any other employee benefits and perquisites on a basis that is comparable in all material respects to those provided to other Company executives.

RETIREMENT:

Subject to all eligibility and waiting period requirements, you shall be entitled to participate in the 401(k) Plan. The Company provides a 50% match on the first 6% of contributions up-to the IRS annual limit.

PRE-EMPLOYMENT:

This offer is contingent upon a satisfactory result on the background investigation, drug screen, and motor vehicle record report.

TERMINATION:

Either you or the Company may terminate the “At-Will” employment. Upon termination of employment with the Company for any reason, or when the Company may so request, you will immediately deliver to the Company any or all Company property in your possession or under your control, including, but not limited to, Confidential Materials, computers, etc.

EMPLOYMENT STATUS:

“At Will” Employment; Nothing herein shall be construed to alter your status as an “At-Will” employee except in writing by the CEO.

Cause. “Cause” shall mean the occurrence of any of the following, as determined by the Board: (i) COO’s conviction of any felony or any crime involving fraud; (ii) COO’s participation (whether by affirmative act or omission) in an act of fraud, or a material act of dishonesty or other act of misconduct against the Company and/or its affiliates that has a material adverse impact on the Company; (iii) conduct by COO which, based upon a good faith and reasonable factual investigation by the Board, demonstrates COO’s gross unfitness to serve in an executive position at the Company; (iv) COO’s violation of any statutory or fiduciary duty, or duty of loyalty, owed to the Company that has a material adverse impact on the Company; (v) COO’s breach of any material term of any material contract between such COO and the Company, after written notice to COO and an opportunity of at least thirty (30) days to cure; (vi) COO’s repeated violation of any material Company policy, after written notice to COO and an opportunity of at least thirty (30) days to cure; and/or (vii) COO’s repeated failure to substantially and adequately perform his material job duties, after detailed, written notice to COO has been provided and COO has had an opportunity of at least thirty (30) days to cure.

NO OFFSET:

In the event of termination of your employment, you shall be under no obligation to seek other employment and there shall be no offset against amounts due to you upon termination on account of any remuneration or benefits provided by any subsequent employment that you may obtain. The Company’s obligation to make any payments upon your termination pursuant to, and otherwise perform its obligations under, this Offer Statement shall not be affected by any offset, counterclaim or other right that the Company or its affiliates may have against you for any reason.

TECHNOLOGY & IP:

During your employment by the Company, all intellectual property and technology developed by you and relating to projects being pursued by the Company, whether directly or indirectly, shall belong to the Company. You agree you will sign the Company’s standard documentation relating to the assignment of inventions that the Company customary provides to new employees.

PARTICIPATION:

During your employment with the Company, you agree not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by you to be adverse or antagonistic to the Company, its business, or prospects, financial or otherwise, or in any company, person, or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates (as defined below). Ownership by you, in professionally managed funds over which you do not have control or discretion in investment decisions, or as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of this covenant. For purposes of this Agreement, “Affiliate,” means, with respect to any specific entity, any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified entity.

NON-COMPETE:

Unless otherwise modified by written agreement between you and the Company, during the term of your employment and for a period of one (1) year thereafter, you shall not engage in competition with the Company and/or any of its Affiliates (as defined above), either directly or indirectly, in any manner or capacity, in any phase of the business of developing, manufacturing and marketing of (a) products incorporating tetrahydrocannabinol (THC) or derivatives or synthetic versions thereof, (b) spray technologies for use in drug delivery of pain medication, or (c) any new molecules which were in development at the Company at the time of departure, except with the prior written consent of the Board.

COOPERATION:

Subject to your other personal and professional obligations, you will cooperate with the Company and its counsel in connection with any investigation, administrative or regulatory proceeding or litigation relating to any matter in which you were involved while at our Company or of which you have knowledge (either directly or indirectly) as a result of your employment with the Company. You will provide truthful and complete information, including documents and other data in your possession or control, in connection with any investigation, inquiry, audit, request for documents or other information, actual or potential legal claims, or other matters concerning anything you have knowledge (either directly or indirectly) as a result of your employment with our Company. Except as expressly requested by the Company, you agree that you will not knowingly encourage or assist any non-governmental third parties in the presentation or prosecution of any disputes, differences, grievances, claims, charges or complaints by any nongovernmental third party against us, unless you are legally required to do so under a subpoena, at the written request of a government agency, or under court order to do so. You agree to furnish to the Company’s General Counsel (at the following email address: ***@***) within three (3) business days of its receipt, a copy of any subpoena, deposition or interview request, civil investigative demand, written inquiry, written request or court order related to the Company. In addition, to the fullest extent permitted under applicable law, you agree to cooperate and keep the Company fully informed (either directly or through your legal counsel) in connection with any inquiry, investigation or legal proceeding related to the Company which our Company is involved with or is contacted in connection with.

INDEMNIFICATION:

The Company shall indemnify you as provided in the Company’s Bylaws for officers of the Company, to the greatest extent permitted by applicable law. The Company currently maintains, and during the Term of this Agreement and for two years after the end of the Term shall continue to maintain, an insurance policy or policies providing liability insurance for, officers and directors of the Company that it believes are customary and usual (based upon recommendations from advisors) for a similarly situated company, and the Company shall cause such insurance policy or policies to cover you to the extent of Company’s obligations under this section and the Company’s Bylaws and Certificate of Incorporation. In connection with the commencement of your employment, the Company will enter into an indemnification agreement with you in the form for officers and directors publicly filed by the Company with the Securities and Exchange Commission.

SEVERABILITY:

The Parties agree that should any provision of this Agreement be declared or determined by any court to be illegal, invalid or unenforceable, the remainder of the Agreement shall nonetheless remain binding and enforceable and the illegal, invalid or unenforceable provision(s) shall be modified only so much as necessary to comply with applicable law.

GOVERNING LAW:

This Agreement, for all purposes, shall be construed in accordance with the laws of Arizona without regard to conflicts of law principles.

COUNTERPARTS:

This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Agreement may be delivered in electronic format, including email and pdf, and shall have the same effect as an original copy of the executed agreement.

NOTICES:

All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered or mailed first-class postage prepaid by registered mail, return receipt requested, or when delivered if by hand, overnight delivery service or confirmed facsimile transmission, to such address as may have been furnished by one party to the other party in writing.

AMENDMENT:

No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Employee and by the President and CEO of the Company, following approval by the Board of Directors.

ENTIRE AGREEMENT:

You acknowledge that this Offer Statement represents the entire agreement between you and the Company as of the date hereof and that no prior verbal or written agreements, promises or representations that are not specifically stated in this Offer, are binding upon the Company or you.

DISPUTE RESOLUTION:

Any dispute among the parties hereto shall be settled by binding arbitration governed by and pursuant to the Federal Arbitration Act, 9 U.S.C. sections 1-16, conducted in Phoenix, Arizona in accordance with the American Arbitration Association National Rules For The Resolution of Employment Disputes, with the following exceptions if in conflict: (a) one arbitrator who is a licensed to practice law shall be chosen; (b) each party to the arbitration will pay one-half of the expenses and fees of the arbitrator, together with other expenses of the arbitration incurred or approved by the arbitrator; and (c) arbitration may proceed in the absence of any party if written notice of the proceedings has been given to such party. The parties agree to abide by all decisions and awards rendered in such proceedings and such decisions and awards rendered by the arbitrator shall be final and conclusive. All such controversies, claims or disputes shall be settled in this manner in lieu of any action at law or equity; provided, however, that nothing in this subsection shall be construed as precluding the bringing an action in any court of competent jurisdiction for injunctive relief or specific performance as provided in this Agreement. This dispute resolution process and any arbitration hereunder shall be confidential and neither any party nor the neutral arbitrator shall disclose the existence, contents or results of such process without the prior written consent of all parties, except where necessary or compelled in a court to enforce this arbitration provision or an award from such arbitration or otherwise in a legal proceeding.

a.

Subject to the Effective Date as defined in Section 3 below, as severance, the Company will pay Employee [INSERT BASE SALARY COMPONENT] and [INSERT BONUS COMPONENT] (together all such sums referred to herein as “Severance Payments”).

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Title VII of the Civil Rights Act of 1964;

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Sections 1981 through 1988 of Title 42 of the United States Code;

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The Civil Rights Act of 1991;

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The Rehabilitation Act of 1973;

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The Employee Retirement Income Security Act of 1974 (except for any vested benefits under any tax qualified benefit plan);

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The Immigration Reform and Control Act;

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The Americans with Disabilities Act of 1990 and its amendments;

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The Older Worker Benefits Protection Act;

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The Age Discrimination in Employment Act of 1967;

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The Family and Medical Leave Act, and its amendments;

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The Workers Adjustment and Retraining Notification Act;

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The Fair Credit Reporting Act;

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The Sarbanes-Oxley Act;

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The Labor Management Relations Act;

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The National Labor Relations Act;

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The Equal Pay Act;

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The Consolidated Omnibus Budget Reconciliation Act;

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The Fair Labor Standards Act;

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The Uniformed Services Employment and Reemployment Rights Act;

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The Lilly Ledbetter Fair Pay Act of 2009;

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any other federal, state or local law, rule, regulation, or ordinance;

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any public policy, contract, tort, or common law; or

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any basis for recovering costs, fees, or other expenses including attorneys' fees incurred in these matters.

a.

The Parties have been given the opportunity to, and have, read this entire Agreement, and have had all questions regarding its meaning answered to their satisfaction.

b.

The contents of this Agreement are written in a manner understood by the Parties, and they fully understand its content, and understand that it is a FULL WAIVER AND RELEASE OF ALL CLAIMS.

c.

The Parties acknowledge that they enter into this Agreement of their own free will, that they have not been pressured or coerced in any manner whatever into signing this Agreement, and that they have consulted with counsel of their own choosing prior to signing this Agreement.

d.

This Agreement is not to be construed as an admission of liability by any party.

e.

The Parties shall bear their own costs and attorneys’ fees incurred herein including, without limitation, any costs or fees incurred in connection with the negotiation and execution of this Agreement.

Employee

Insys Therapeutics, Inc.

/s/

Dan Brennan 

Title:

Name:

1.

Conditional Sign-On Bonus. INSYS agrees to pay Candidate a one-time Conditional Sign-On Bonus of $250,000 (“Bonus”), subject to all required taxes and withholdings, to be paid on the next payroll date following Candidate’s Employment Start Date. The Parties agree that the Bonus is an unvested wage advance upon receipt that Candidate will earn in its entirety without restriction by remaining employed by INSYS for 12 months following the Employment Start Date; provided the Bonus shall also be deemed earned without restriction if his employment is terminated by INSYS without “Cause” or, by the Candidate with “Good Reason”.  

2.

Repayment of Bonus. Candidate agrees to repay to INSYS all or a prorated amount of the Bonus, according to the following terms:

(a)

Repayment Due to Termination of Employment. If Candidate’s employment with INSYS terminated by INSYS for Cause or by the Candidate without Good Reason less than 3 full months after the Employment Start Date, Candidate agrees to repay one hundred percent (100%) of the Bonus. If Candidate’s employment with INSYS terminated by INSYS for Cause or by the Candidate without Good Reason less than 12 full months after the Start Date, Candidate agrees to repay the full amount of the Bonus, less eight point thirty-three percent (8.33%) for each full month of employment completed after the Start Date of employment. Candidate agrees that repayment obligations under this Agreement are not reduced by completion of partial months of employment. Candidate further agrees that Candidate will repay the applicable Bonus amount by no later than the effective date of the employment termination, and that any outstanding balance on such repayment obligation is delinquent and immediately collectable the day following the effective date of termination.

(b)

Repayment Forgiveness. Without limiting the provisions of Section 2)a) above, INSYS agrees to forgive any repayment due INSYS under this Agreement where INSYS terminates Candidate’s employment due to a company- or department-wide reduction-in-force. INSYS may also, in its sole discretion, forgive any repayment due INSYS under this Agreement under circumstances of an extraordinary or unavoidable nature. The Parties agree that Candidate’s voluntary termination of his employment other than for Good Reason, or INSYS’ termination of Candidate’s employment for Cause, are not conditions requiring forgiveness of any repayment due INSYS under this Agreement.

3.

No Guarantee of Continued Employment. Nothing in this Agreement guarantees employment for any period of time.

4.

Consent to Offset. Candidate agrees that any repayment due INSYS under this Agreement may be deducted to the extent permitted by law from any amounts due, but not yet paid, to Candidate from INSYS at the time of employment termination, including wages, incentive compensation payments, bonuses and commissions, and hereby expressly authorizes such deduction(s).

5.

Acknowledgements and Integration. Candidate understands he has the right to discuss this Agreement with any individual, and that to the extent desired, he has availed himself of this opportunity. Candidate further acknowledges that he has carefully read and fully understands the provisions of this Agreement, and that he is voluntarily entering into it without any duress or pressure from INSYS. Candidate also understands and acknowledges that this Agreement is the entire agreement between him and INSYS with respect to this subject matter, and Candidate acknowledges that INSYS has not made any other statements, promises or commitments of any kind (written or oral) to cause Candidate to agree to the terms of this Agreement.

8.            At Will Employment. Employee further understands and agrees that his employment is “at will” and nothing in this Agreement is intended to create a contract or guarantee of employment by the Company.

10.          Execution. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Agreement may be delivered in electronic format, including email and PDF, and shall have the same effect as an original copy of the executed agreement.