1
EXHIBIT 10.16
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this Agreement) dated as of June 1, 1998, between
ANTIGENICS L.L.C., a Delaware limited liability company (the "LLC"), and XXXX
XXXXXXX (Employee").
WITNESSETH:
WHEREAS, the LLC desires to employ Employee as Senior Vice President
and Employee desires to accept such employment, under the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions hereof, the
LLC hereby employs Employee as a Senior Vice President during the term hereof as
hereinafter described, and Employee hereby accepts such employment.
2. TERM OF EMPLOYMENT. Unless earlier terminated pursuant to
Section 6 hereof, the term of employment of Employee under this Agreement shall
be for a period of one (1) year from the date hereof. At the end of such term,
and at the end of each succeeding one year term (the end of each one year term
an "Anniversary"), this Agreement shall automatically be renewed for a term of
one (1) year unless either party gives the other party notice not more than
sixty (60) nor less than thirty (30) days prior to the Anniversary of its intent
to terminate this Agreement. If such notice is given, this Agreement shall
terminate on the Anniversary.
3. DUTIES. During the term of her employment by the LLC, Employee
shall serve as-a Senior Vice President. In such capacity, Employee shall serve
at the pleasure of the LLC as a Senior Vice President. Employee shall at all
times report to the Chief Executive Officer, and Employee shall keep the Chief
Executive Officer fully apprised of all of Employees activities. Employee shall
perform her duties hereunder faithfully, diligently and to the best of her
ability, and shall devote all of her business time to the LLC's business.
4. COMPENSATION.
4.1 BASE SALARY. The LLC shall pay Employee a base salary ("Base
Salary") at the rate of $200,000 per annum, with the understanding that Employee
shall be eligible for all future performance or merit-based increases in Base
Salary. Base Salary shall be payable in accordance with the standard payroll
practices of the LLC in effect from time to time.
4.2 INCENTIVE EQUITY PLAN. In connection with her employment
hereunder, Employee has been granted an option under the LLCs Incentive Equity
Plan. The terms and conditions of such option are set forth in the form of
Option Agreement attached hereto as EXHIBIT A, copies of which have been
executed and delivered by the LLC and Employee as of the date hereof.
2
5. OTHER BENEFITS.
5.1 VACATION. Employee shall be entitled to up to four (4) weeks
of paid vacation each calendar year. Such vacation shall be taken only at such
time or times as the Chief Executive Officer may approve. If Employee does not
use all four weeks of vacation time in any one calendar year, employee will
abide by employer policy in using vacation in successive calendar year.
5.2 BENEFIT PROGRAMS. During the term of her employment, Employee
shall be entitled to participate in all employee benefit programs of the LLC in
effect from time to time.
6. TERMINATION OF EMPLOYMENT.
6.1 GENERAL. The employment of Employee may be terminated by the
LLC at any time during the term hereof for "Cause" (as defined below), without
"Cause" or as a result of Employee's "Permanent Disability" (as defined below)
or death.
6.2 CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) "Cause" means one or more of the following:
(1) any willful or intentional act of Employee
that could reasonably be expected to have the effect of injuring the reputation,
business or business relationships of the LLC;
(2) conviction of Employee (including a
conviction on a nolo contendere plea) of any felony (other than a traffic
violation), or of any crime or offense which involves property or money of the
LLC or moral turpitude, or Employee's incarceration following any conviction
which restricts or limits the ability of Employee to perform her duties
hereunder;
(3) Employee's refusal or repeated failure or
neglect to perform her duties as set forth herein; or
(4) any other conduct of Employee that
constitutes a willful, intentional or material breach of this Agreement.
(b) "Permanent Disability" means the inability of
Employee, even with reasonable accommodation, to perform the essential functions
of her position hereunder for at least 90 consecutive days or for at least 120
days in any 365-day period as a result of physical or mental disability.
6.3 TERMINATION WITHOUT CAUSE. If Employee's employment hereunder
is terminated by the LLC other than due to "Cause" or Employee's Permanent
Disability, then the LLCs sole liability and obligation to Employee shall be to
continue to make Base Salary payments to Employee until the end of the
Anniversary in accordance with the LLC's standard payroll practices.
Notwithstanding the foregoing, if Employee's employment hereunder is terminated
by the LLC because (i) more than 50% of the outstanding units of equity
interests in the LLC (the
-2-
3
"Units") are sold to an unaffiliated third party or (ii) the LLC eliminates the
position of Senior Vice President, the LLC's sole liability and obligation to
Employee shall be, at Employee's option, to (x) make Base Salary payments to
Employee for one year in accordance with the LLC's standard payroll practices or
(y) distribute to Employee Units that are valued in the aggregate at $[200,000].
The Units shall be distributed on a schedule corresponding to the amount of Base
Salary Employee would have received if Employee's Base Salary was being paid in
accordance with the LLC's standard payroll practices, rounded to the nearest
Unit. Employee shall have no rights as a Member of the LLC with respect to any
Units distributed pursuant to this Section 6.3 until Employee has duly executed
and delivered a copy of the LLC's Limited Liability Company Agreement as then in
effect. The parties acknowledge that it would be difficult to calculate the
amount of damages that Employee would suffer as a result of such termination,
and the severance payment provided for in this Section 6.3 is intended to be a
reasonable estimate of such damages and to be Employee's exclusive remedy under
this Agreement. Except as provided in this Agreement, neither Employee nor her
estate or beneficiaries shall have any rights or claims against the LLC by
reason of any termination of the employment of Employee hereunder.
6.4 VOLUNTARY TERMINATION, TERMINATION DUE TO CAUSE, PERMANENT
DISABILITY OR DEATH. If Employee's employment hereunder is voluntarily
terminated by Employee, is terminated by the LLC due to Cause, or is terminated
due to Employee's Permanent Disability or death, then the LLC's sole liability
and obligation to Employee shall be to pay Employee her accrued and unpaid Base
Salary in addition to any accrued and unused vacation time through the date of
such termination.
6.5 REQUIREMENT TO MITIGATE. If Employee's employment hereunder is
terminated by the LLC other than due to "Cause" or Employee's Permanent
Disability, then Employee shall be required to mitigate damages otherwise
obtainable from the LLC pursuant to Section 6.3 hereof, as a result of the LLC's
breach of this Agreement, and any compensation income received by Employee after
such termination shall reduce the amount payable in accordance with Section 6.3.
7. CONFIDENTIALITY, NON-COMPETITION AND RELATED MATTERS.
7.1 CONFIDENTIAL INFORMATION. Employee shall not, directly or
indirectly, during the period she is engaged as an employee to the LLC and
during the three-year period thereafter (such period of employment plus such
three-year period being hereinafter referred to as the "Restrictive Period"),
disclose to anyone or use (except as authorized in the regular course of the
LLC's business) any information acquired during her employment with the LLC or
thereafter with respect to any of the LLC's confidential information (including
information relating to the development of the LLC's inventions, processes,
formulae, and any other information that is not then generally available to the
public, all of which Employee acknowledges to be confidential).
7.2 COVENANT NOT TO COMPETE. Employee shall not, during the period
she is engaged as an employee to the LLC and during the one-year period
thereafter, directly or indirectly, engage or become interested in (as owner,
stockholder, partner, director, officer, employee, consultant, agent or
otherwise) any business which is involved in the study, development, marketing
or sale of autologous cell-derived cancer vaccines. Employee acknowledges that
this
-3-
4
provision is necessary for the LLC's protection and is reasonable since she is
able to obtain employment or otherwise provide services to companies whose
businesses or proposed businesses are not related to the study, development,
marketing or sale of autologous cell-derived cancer vaccines. If, however, any
provision of this paragraph is held to be unenforceable because of the duration,
scope or absence of geographical limits of the restriction, the court making
that determination shall modify that provision to the extent necessary to make
it valid. Ownership of less than 5% of the securities of any class of a
corporation registered under section 12(b) or 12(g) of the Securities Exchange
Act of 1934 shall not be considered a violation of the provisions of this
paragraph.
7.3 NON-SOLICITATION OF EMPLOYEES. Employee shall not, during the
Restrictive Period, directly or indirectly employ or retain, solicit the
employment or retention of, or be associated with any entity that employs or
retains or solicits the employment or retention of, any person who was an
employee of the LLC at any time during Employee's employment or during the
Restrictive Period.
7.4 SET-OFF. If Employee shall, after termination of her
employment hereunder, breach any provision of Section 7.1, 7.2 or 7.3 hereof,
the LLC may set-off against the amounts otherwise payable to Employee pursuant
to Section 6.3 hereof, the amount of the damages suffered by it as a result of
such breach. Any amounts withheld from Employee by the LLC pursuant to this
Section 7.4 shall be deposited with an escrow agent to be determined by the LLC
(which escrow agent shall be reasonably satisfactory to Employee) pending a
determination of the LLC's right to make such set-off. The parties shall agree
to the escrow agent's standard terms and conditions, and the fees and expenses
associated with such escrow agent shall be borne equally by the LLC and
Employee.
8. INJUNCTIVE RELIEF: Without limiting the remedies available to
the LLC, Employee acknowledges that a breach of the covenants contained in
Sections 7.1, 7.2 and 7.3 hereof may result in material irreparable injury to
the LLC for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the LLC shall be entitled to seek and obtain
a temporary restraining order and/or a preliminary or permanent injunction,
without the necessity of showing actual damage and without any bond or other
security being required, restraining Employee from engaging in activities
prohibited by such Section or such other relief as may be required to
specifically enforce any of the covenants in such Sections 7.1, 7.2 and 7.3
hereof. If the LLC decides to seek and obtain such a temporary restraining order
and/or a preliminary or permanent injunction, it shall notify Employee at least
24 hours in advance of such actions.
9. ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the heirs and representatives of Employee and the assigns and
successors of the LLC, but neither this Agreement nor any rights or obligations
hereunder shall be assignable or otherwise subject to hypothecation by Employee
(except by will or by operation of the laws of intestate succession) or by the
LLC, except that the LLC may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the LLC, if such successor expressly agrees to assume the
obligations of the LLC hereunder.
-4-
5
10. NOTICES. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be deemed sufficiently given if
delivered in person, or mailed by certified first class mail, postage prepaid,
or sent by a reputable overnight courier service, addressed to the party to be
notified at the address(es) specified below (or such other address as may be
specified by notice in this manner):
Notice to LLC:
c/o Antigenics, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Notice to Employee:
Xxxx Xxxxxxx
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Notices shall be deemed given as of the date delivered or the date entrusted to
the United States postal service or courier service.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
12. HEADINGS. The headings in this Agreement are for convenience
only and in no way define, limit, or describe the scope or intent of any
provision of this Agreement.
13. WAIVER. The waiver by either party of noncompliance by the
other party of any term or provision of this Agreement shall not be construed as
a waiver of any other non-compliance.
14. SEVERABILITY. If any one or more of the provisions contained
in this Agreement shall be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions hereof.
15. GOVERNING OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS CONFLICTS OF LAWS RULES OR PRINCIPLES.
[END OF TEXT]
-5-
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to he
duly executed as of the day and year first above written.
ANTIGENICS L.L.C.
By: /s/ Xxxx Xxxxx
-------------------------------
Authorized Signatory
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx
-6-
7
ANTIGENICS L.L.C.
EQUITY OPTION AGREEMENT
ANTIGENICS, dated as of July 1, 1996 between Antigenics L.L.C., a
Delaware limited liability company (the "Company"), and Xxxx Xxxxxxx (the
"Optionee").
WHEREAS, concurrently with the execution of this agreement, Optionee is
entering into an employment agreement with the Company;
WHEREAS, the Company has granted to the Optionee the options (the
"Options") to purchase an aggregate equity interest in the Company equal to 800
Units of the equity interests in the Company (the "Option Interests"), subject
to the terms and conditions set forth in the Company's Incentive Equity Plan
(the "Plan") and the additional terms and conditions set forth below.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. DEFINITIONS AND INTERPRETATION. Terms defined in the Plan and
not otherwise defined herein shall have the same meanings when used herein. In
the event of any inconsistency between the terms of the Plan and this Agreement,
the terms of the Plan shall control.
2. EXERCISE. The Options shall be exercised by written notice to
the Company (to the attention of the Corporate Secretary) accompanied by (i)
payment in full of the Purchase Price, (ii) any payment or other action required
to satisfy the tax withholding requirement, if any. Payment of the Purchase
Price shall be made in cash (including check, bank draft, or money order) or
with the Committee's prior written approval, by delivery of a promissory note of
the Optionee, such promissory note to be on such terms as are specified by the
Board, or by a combination of cash and the Optionee's promissory note.
3. VESTING; EXPIRATION. The Options shall be exercisable as to
200 Units immediately, as to 200 Units from and after the first anniversary of
the date hereof, as to 200 Units from and after the second anniversary of the
date hereof and as to the remaining 200 Units from and after the third
anniversary of the date hereof. The options shall thereafter remain exercisable
prior to their expiration or earlier termination as provided herein or under the
Plan. The options shall expire on the tenth anniversary of the date hereof or
earlier, as provided in the Plan.
4. PURCHASE PRICE; ADJUSTMENTS. The Purchase Price of the Options
is $250.00 per Unit. The Option Interests issuable upon exercise of the Option
and the Purchase Price shall be subject to adjustment in accordance with the
Plan.
5. NO RIGHTS AS MEMBER. The Optionee shall have no rights as a
Member of the Company with respect to the Option Interests until after an Option
has been exercised and the Optionee has duly executed and delivered a copy of
the LLC Agreement.
-7-
8
6. MISCELLANEOUS. This agreement shall be governed by and
construed in accordance with the internal laws of the State of New York. The
Option and this Agreement may not be transferred or assigned by the Optionee
other than by will or the laws of descent and distribution, and during the
lifetime of the Optionee, the Option may be exercised only by the Optionee or
the Optionee's guardian or legal representative. This Agreement shall bind and
inure to the benefit of the parties hereto and the successors and assigns of the
Company and, to the extent provided above, the executors, administrators,
legatees and heirs of the Optionee. Except as set forth in the Plan, neither
this Agreement nor any provision hereof may be amended, modified, changed,
discharged, terminated or waived orally or by any course of dealing or purported
course of dealing, but only by an agreement in writing signed by the Optionee
(or, following the death of the Optionee, by such person or persons as may be
entitled hereunder or under the Plan to exercise the Option) and the Company. No
such agreement shall extend to or affect any provision of this Agreement not
expressly amended, modified, changed, discharged, terminated or waived or impair
any right consequent on such a provision.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ANTIGENICS L.L.C.
By: /s/ Xxxx Xxxxx
-------------------------------
Authorized Signatory
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx, Optionee
-8-
