THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
THIRD AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Amendment”)
is entered into effective as of May 4, 2006, by and between CancerVax Corporation, a Delaware
corporation (the “Company”), and Xxxxx X. Xxxx (“Executive”).
WHEREAS, the Company and Executive desire to amend that certain Amended and Restated
Employment Agreement dated as of November 15, 2004, between the Company and Executive (as amended
to date, the “Original Agreement”) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the various covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
1. Amendment to Section 4(g). Section 4(g) of the Original Agreement is hereby
amended in its entirety to read as follows:
“(g) Acceleration In Connection With a Change of Control. Executive’s employment will
be terminated by the Company without Cause effective as of May 5, 2006. Such termination shall
constitute a termination of Executive’s employment without Cause following a Change of Control for
purposes of this Agreement. Effective as of the date of termination, the vesting and/or
exercisability of any outstanding unvested portions of Executive’s Stock Awards, other than
Executive’s Stock Awards granted to him on March 20, 2006, shall be automatically accelerated on
the date of termination. The vesting pursuant to this Section 4(g) shall be cumulative. The
foregoing provisions are hereby deemed to be a part of each Stock Award and to supersede any less
favorable provision in any agreement or plan regarding such Stock Award. None of the Stock Awards
granted to Executive on March 20, 2006 shall accelerate pursuant to this Section 4(g), the vesting
of which shall continue to be governed by the terms of the stock award agreement pursuant to which
they were granted.”
2. Amendment to Section 5(d)(ii). Section 5(d)(ii) of the Original Agreement is
hereby amended in its entirety to read as follows:
“(ii) Termination In Connection With Change of Control. Executive’s employment will
be terminated by the Company without Cause effective as of May 5, 2006. Such termination shall
constitute a termination of Executive’s employment without Cause following a Change of Control for
purposes of this Agreement. Upon such termination, Executive shall be entitled to receive, in lieu
of any severance benefits to which Executive may otherwise be entitled under any severance plan or
program of the Company, the benefits provided below:
(A) the Company shall pay to Executive his fully earned but unpaid base salary, when
due, through the date of termination at the rate then in effect, plus all other amounts to
which Executive is entitled under any compensation plan or practice of the Company at the
time of termination;
(B) Executive shall be entitled to receive severance pay as follows:
(1) on May 5, 2006, (x) $227,200 in cash, plus (y) a number of fully-vested
shares of the Company’s common stock equal to (i) $227,200, divided by (ii) the
closing price of the Company’s common stock on The Nasdaq National Market on the
immediately preceding trading date, plus
(2) on January 1, 2007, (x) $317,800 in cash, plus (y) a number of fully-vested
shares of the Company’s common stock equal to (i) $250,200, divided by (ii) the
closing price of the Company’s common stock on The Nasdaq National Market on the
immediately preceding trading date
Any shares of the Company’s common stock to be issued to Executive pursuant to
this Section 5(d)(ii)(B) shall be issued to Executive as a fully-vested stock payment
pursuant to the Company’s Amended and Restated 2003 Equity Incentive Award Plan (or
any successor plan maintained by the Company) and such issuance shall be expressly
conditioned on compliance with all applicable laws and Executive’s payment of all
applicable federal, state and local taxes required to be withheld by the Company as a
result of the issuance of such shares. Executive may satisfy such withholding
obligations by instructing the Company to withhold shares of the Company’s common
stock otherwise issuable to Executive pursuant to this Section 5(d)(ii)(B)(3) or by
payment of such amounts in cash or reduction of other compensation payable to
Executive by the Company. In the event such issuance is not permitted by applicable
laws as of May 5, 2006 or January 1, 2007, as applicable, then within ten (10) days
following such scheduled issuance date, the Company shall pay to Executive a cash
payment in lieu of shares of the Company’s common stock, less all applicable federal,
state and local taxes required to be withheld by the Company. Any shares of the
Company’s common stock issued to Executive hereunder shall be registered by the
Company on a Registration Statement of Form S-8 as of the date of issuance.
(C) For the period beginning on the date of termination and ending on the date which is
eighteen (18) full months following the date of termination (or, if earlier, the date on
which the applicable continuation period under COBRA expires), reimburse Executive for the
costs associated with continuation coverage pursuant to COBRA for Executive and his eligible
dependents who were covered under the Company’s health plans as of the date of Executive’s
termination (provided that Executive shall be solely responsible for all matters
relating to his continuation of coverage pursuant to COBRA, including, without limitation,
his election of such coverage and his timely payment of premiums);
(D) (1) For the period beginning on the date of termination and ending on February 28,
2007, pay for and provide Executive and such eligible dependents with life insurance
benefits coverage to the extent such dependents were receiving such benefits prior to the
date of Executive’s termination, and (2) on March 1, 2007, pay Executive an amount in cash
equal to the premiums required to maintain the life insurance benefits coverage described in
clause (1) above through the date which is eighteen (18) full months following the date of
termination;
(E) Executive shall be entitled to executive-level outplacement services at the
Company’s expense, not to exceed $15,000, which services shall be provided no later than
March 15, 2007. Such services shall be provided by a firm selected by Executive from a list
compiled by the Company; and
(F) Upon Executive’s termination of employment on May 5, 2006, Executive shall receive
the payments and benefits described in Section 5(d)(ii) and Section 5(d)(i) shall be
inapplicable.”
2. No Other Amendments. Except as expressly provided for in this Amendment, no other
term or provision of the Original Agreement is amended or modified in any respect.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth
above.
| CANCERVAX CORPORATION |
||||
| By: | /s/ Xxxxxxx X. XxXxx | |||
| Name: | Xxxxxxx X. XxXxx | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
| /s/ Xxxxx X. Xxxx | ||||
| Xxxxx X. Xxxx | ||||
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