AGREEMENT
EXHIBIT 10.1
AGREEMENT
AGREEMENT made and entered into in New York, New York, by and between Antigenics Inc. (the
“Company”), a Delaware corporation with a principal place of business at 000 Xxxxx Xxx. Xxxxx 0000
Xxx Xxxx, XX, and Xxxxx Xxxxxxx (the “Executive”), effective as of the 28th day of
November, 2005 (the “Effective Date”) (the “Agreement”). Words or phrases which are initially
capitalized or are within quotation marks shall have the meanings provided in Section 14 below and
as provided elsewhere herein.
(a) During the Term hereof, the Executive shall be employed by the Company on a full-time
basis and shall perform such duties and responsibilities on behalf of the Company and its
Affiliates as may be designated from time to time consistent with his position. In addition, and
without further compensation, the Executive shall serve as a director and/or officer of one or more
of the Company’s Affiliates if so elected or appointed from time to time.
(b) During the Term hereof, the Executive shall devote his best efforts, business judgment,
skill and knowledge to the advancement of the business and interests of the Company and its
Affiliates and to the discharge of his duties and responsibilities hereunder. The Executive shall
not engage in any other business activity or serve in any industry, trade, professional,
governmental or academic position during the Term of this Agreement, except as may be approved by
the Board of Directors of the Company (the “Board”) or its designee.
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be amended from time to time, and to such reasonable substantiation and documentation as may
be specified by the Company from time to time.
(i) The Company may terminate the Executive’s employment hereunder, upon notice to the
Executive, in the event that the Executive becomes disabled during his employment hereunder
through any illness, injury, accident or condition of either a physical or psychological
nature and, as a result, is unable to perform substantially all of his duties and
responsibilities hereunder, with or without a reasonable accommodation, for ninety (90) days
during any period of three hundred and sixty-five (365) consecutive calendar days.
(ii) The Board may designate another employee to act in the Executive’s place during
any period of the Executive’s disability. Notwithstanding any such designation, the
Executive shall continue to receive the Base Salary in accordance with Section 4(a) and
benefits in accordance with Section 4(e), to the extent permitted by the then-current terms
of the applicable benefit plans, until the Executive becomes eligible for disability income
benefits under the Company’s disability income plan or until the termination of his
employment, whichever shall first occur.
(iii) While receiving disability income payments under the Company’s disability income
plan, the Executive shall not be entitled to receive any Base Salary under Section 4(a)
hereof, but shall continue to participate in Company benefit plans in accordance with
Section 4(e) and the terms of such plans, until the termination of his employment.
(iv) If any question shall arise as to whether during any period the Executive is
disabled through any illness, injury, accident or condition of either a physical or
psychological nature so as to be unable to perform substantially all of his duties and
responsibilities hereunder, the Executive may, and at the request of the Company shall,
submit to a medical examination by a physician selected by the Company to whom the Executive
or his duly appointed guardian, if any, has no reasonable objection to determine whether the
Executive is so disabled and such determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise
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and the Executive shall fail to submit to such medical examination, the Company’s
determination of the issue shall be binding on the Executive.
(v) In the event the Company terminates the Executive’s employment hereunder due to
disability, the Company shall pay to the Executive any accrued and unpaid Base Salary and
accrued but unused vacation through the date of termination.
(i) The Executive’s failure to perform (other than by reason of disability), or
negligence in the performance of, his duties and responsibilities to the Company or any of
its Affiliates; or
(ii) Material breach by the Executive of any provision of this Agreement; or
(iii) Other conduct by the Executive that is materially harmful to the business,
interests or reputation of the Company or any of its Affiliates.
Upon the giving of notice of termination of the Executive’s employment hereunder for Cause,
the Company shall have no further obligation or liability to the Executive, other than for Base
Salary earned and unpaid and accrued vacation earned but not taken at the date of termination.
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(including withholding taxes) on such outplacement assistance benefit. Furthermore, at the
sole discretion of the Compensation Committee of the Board, any unvested options to purchase
Company stock may be accelerated.
(i) If a Change of Control occurs on the date of such Change in Control, fifty-percent
(50%) of any stock options previously granted to the Executive that are outstanding and
unvested as of that date shall become vested and exercisable,
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provided that the Executive is employed by the Company on the date of such Change in
Control.
(ii) If a Change of Control occurs and within eighteen (18) months following such
Change of Control, the Company terminates the Executive’s employment other than for Cause,
or the Executive terminates his employment as a result of a Compensation Reduction or for
Good Reason (as defined herein), then, in lieu of any payments to or on behalf of the
Executive under Section 5(d) or 5(e) hereof, the Company shall pay to the Executive in one
lump sum an amount equal to (A) eighteen (18) months Base Salary at the rate in effect on
the date of termination, plus (B) 150% of the higher of (x) the Executive’s target incentive
bonus under the Executive Incentive Plan for the year in which the Executive’s employment is
terminated or (y) the actual incentive bonus paid to the Executive, if any, under the
Executive Incentive Plan for the last full fiscal year preceding the year in which the
Executive’s employment is terminated; and shall also, until the conclusion of a period of
eighteen (18) months following the date of termination, pay the full premium cost of the
Executive’s participation in the Company’s group medical and dental insurance plans,
provided that the Executive is entitled to continue such participation under applicable law
and plan terms. In addition, any outstanding unvested options granted to the Executive as
of the date of the Change in Control shall become vested and shall be exercisable for ninety
(90) days following termination of the Executive’s employment. The Company will also provide
the Executive with an outplacement assistance benefit in the form of a lump-sum payment of
$15,000 plus an additional lump-sum payment in an amount sufficient, after giving effect to
all federal, state and other taxes with respect to such additional payment, to make
Executive whole for all taxes (including withholding taxes) on such outplacement assistance
benefit.
(iii) All payments required to be made by the Company hereunder to Executive or his
dependents, beneficiaries, or estate will be subject to the withholding of such amounts
relating to tax and/or other payroll deductions as may be required by law.
In the event that it is determined that any payment or benefit provided by the Company
to or for the benefit of Executive, either under this Agreement or otherwise, will be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or any
successor provision(s) (“Section 4999”), the Company will, prior to the date on which any
amount of the excise tax must be paid or withheld, make an additional lump-sum payment (the
“Gross-up Payment”) to Executive in an amount sufficient, after giving effect to all
federal, state and other taxes and charges (including interest and penalties, if any) with
respect to the gross-up payment, to make Executive whole for all taxes (including
withholding taxes) and any associated interest and penalties, imposed under or as a result
of Section 4999.
Determinations under this Section 5(g)(iii) will be made by an accounting firm engaged
by the Company (the “Firm”). The determinations of the Firm will be binding upon the
Company and Executive except as the determinations are established in
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resolution (including by settlement) of a controversy with the Internal Revenue Service
to have been incorrect. All fees and expenses of the Firm will be paid by the Company.
If the Internal Revenue Service asserts a claim that, if successful, would require the
Company to make a Gross-up Payment or an additional Gross-up Payment, the Company and
Executive will cooperate fully in resolving the controversy with the Internal Revenue
Service. The Company will make or advance such Gross-up Payments as are necessary to
prevent Executive from having to bear the cost of payments made to the Internal Revenue
Service in the course of, or as a result of, the controversy. The Firm will determine the
amount of such Gross-up Payments or advances and will determine after final resolution of
the controversy whether any advances must be returned by Executive to the Company. The
Company will bear all expenses of the controversy and will gross Executive up for any
additional taxes that may be imposed upon Executive as a result of its payment of such
expenses.
(iv) For the purpose of this Section 5(g), a “Change in Control” shall mean: (A) the
acquisition by any Organization of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the common stock of the Company;
provided, however, that for purposes of this subsection (A), an acquisition shall not
constitute a Change in Control if it is: (x) by a Benefit Plan sponsored or maintained by
the Company or an entity controlled by the Company or (y) by an entity pursuant to a
transaction that complies with clauses (x), (y) and (z) of subsection (C) of this Section
5(g)(iv); or (B) individuals who, as of September 22, 2005, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to September 22, whose
election, or nomination for election by the Company’s stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board (or a majority
of the members of a nominating committee who are members of the Incumbent Board) shall be
treated as a member of the Incumbent Board unless he or she assumed office as a result of an
actual or threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on behalf of an
Organization other than the Board; or (C) consummation of a merger or consolidation
involving the Company, or a sale or other disposition of all or substantially all of the
assets of the Company, (a “transaction”) in each case unless, immediately following such
transaction, (x) the beneficial owners of the common stock of the Company outstanding
immediately prior to such transaction beneficially own, directly or indirectly, more than
50% of the combined voting power of the outstanding voting securities of the entity
resulting from such transaction (including, without limitation, an entity which as a result
of such transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries), (y) no Organization (excluding any
entity resulting from such transaction or any Benefit Plan of the Company or such entity
resulting from such transaction) beneficially owns, directly or indirectly, 50% or more of
the combined voting power of the then outstanding voting securities of such entity and (z)
at least a majority of the members of the board of directors or similar board of the entity
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resulting from such transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for such
transaction; or (D) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company. For purposes of the foregoing: “Benefit Plan” means any
employee benefit plan, including any related trust; “Board” means the Board of Directors of
the Company; “Exchange Act” means the Securities Exchange Act of 1934, as amended; and
“Organization” means any individual, entity or group (within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act).
(i) To the extent any payment under Section 5 shall be required to be delayed following
separation from service to comply with the “specified employee” rules of Section 409A of the
Internal Revenue Code, it shall be delayed (but not more than is required to comply with such
rules).
(a) Payment(s) by the Company and contributions to the cost of the Executive’s continued
participation in the Company’s group health and dental plans that may be due to the Executive under
Section 5 shall constitute the entire obligation of the Company to the Executive. In order to
receive any payments or any other benefits under Section 5(d) or 5(e) or 5(g) or 5(h), the
Executive must first execute a General Release of Claims in a form acceptable to the Company.
(b) Except for medical and dental insurance coverage continued pursuant to Section 5(d) or
5(e) or 5(g) or 5(h) hereof, benefits shall terminate pursuant to the terms of the applicable
benefit plans based on the date of termination of the Executive’s employment without regard to any
continuation of Base Salary or other payment to the Executive following such date of termination.
(c) Provisions of this Agreement shall survive any termination if so provided herein or if
necessary or desirable fully to accomplish the purposes of such provision, including without
limitation the obligations of the Executive under Sections 7, 8, 9 and 13 hereof. The obligation
of the Company to make payments to or on behalf of the Executive under Section 5(d) or 5(e) or 5(g)
or 5(h) hereof is expressly conditioned upon the Executive’s continued full performance of
obligations under Sections 7, 8, and 9 hereof. The Executive recognizes that, except as expressly
provided in Section 5(d) or 5(e) or 5(g) or 5(h), no compensation is earned by, or in any way owing
to, Executive after termination of employment.
(d) Any lump-sum payments to be made to the Executive hereunder shall be made as soon as
administratively practicable and in any event no later than 21/2 months after the
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end of the year in which the Executive becomes entitled to such payment.
(e) To the extent any payment hereunder shall be required to be delayed until six months
following separation from service to comply with the “specified employee” rules of Section 409A of
the Internal Revenue Code, it shall be delayed (but not more than is required) to comply with such
rules, and shall promptly after such delay be paid with interest at a reasonable market rate as
determined by the Company.
(a) The Executive acknowledges that the Company and its Affiliates continually develop
Confidential Information, that the Executive may develop Confidential Information for the Company
or its Affiliates and that the Executive may learn of Confidential Information during the course of
employment. The Executive will comply with the policies and procedures of the Company and its
Affiliates for protecting Confidential Information and shall never disclose to any Person or to any
governmental agency or political subdivision of any government (except as required by applicable
law or for the proper performance of his duties and responsibilities to the Company and its
Affiliates), or use for his own benefit or gain, any Confidential Information obtained by the
Executive incident to his employment or other association with the Company or any of its
Affiliates. The Executive understands that the restriction shall continue to apply after his
employment terminates, regardless of the reason for such termination.
(b) All documents, records, tapes and other media of every kind and description relating to
the business, present or otherwise, of the Company or its Affiliates and any copies, in whole or in
part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and
exclusive property of the Company and its Affiliates. The Executive shall safeguard all Documents
and shall surrender to the Company at the time his employment terminates, or at such earlier time
or times as the Board or its designee may specify, all Documents then in the Executive’s possession
or control.
(c) The Executive acknowledges and agrees that all Confidential Information and proprietary
materials that are provided by the Company to the Executive under this Agreement are and shall
remain the exclusive property of the Company or the third party entrusting such Confidential
Information or proprietary materials to the Company.
(a) While the Executive is employed by the Company and for the greater of (i) twelve (12)
months after his employment terminates or (ii) the period during which the Executive is receiving
payments under Section 5(d) or 5(e) or 5(g) or 5(h) (the “Non-Competition Period”), the Executive
shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the Company or any of its Affiliates or undertake
any planning for any business competitive with the Company or
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any of its Affiliates. Specifically, but without limiting the foregoing, the Executive agrees
not to engage in any manner in any activity that is directly or indirectly competitive with the
business of the Company or any of its Affiliates as conducted or under consideration at any time
during the Executive’s employment. Restricted activity includes without limitation accepting
employment or a consulting position with any Person who is, or at any time within twelve (12)
months prior to the termination of the Executive’s employment has been, a competitor or a customer
of the Company or any of its Affiliates. For the purposes of this Section 8, the business of the
Company and its Affiliates shall include all Products and the Executive’s undertaking shall
encompass all items, products and services that may be used in substitution for Products. The
foregoing shall not prohibit the Executive’s passive ownership of two percent (2%) or less of the
equity securities of any publicly traded company.
(b) The Executive agrees that, during his employment with the Company or any Affiliate of the
Company, he will not undertake any outside activity, whether or not competitive with the business
of the Company or its Affiliates, that could reasonably give rise to a conflict of interest or
otherwise interfere with his duties and obligations to the Company or any of its Affiliates.
(c) The Executive further agrees that while he is employed by the Company or any Affiliate of
the Company and thereafter during the Non-Competition Period, the Executive will not hire or
attempt to hire any employee of the Company or any of its Affiliates, assist in such hiring by any
Person, encourage any such employee to terminate his or her relationship with the Company or any of
its Affiliates or solicit or encourage any customer or vendor of the Company or any of its
Affiliates to terminate its relationship with them, or, in the case of a customer, to conduct with
any Person any business or activity which such customer conducts or could conduct with the Company
or any of its Affiliates.
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The Executive represents that the attached Exhibit A contains a complete list of all
inventions, copyrightable works, tangible materials, and other intellectual property that the
Executive (either alone or jointly with others) conceived, developed, discovered, created, or
reduced to practice prior to the Effective Date (the “Prior IP”). The Prior IP is not assigned to
the Company under this Agreement, except to the extent that the Executive expressly assigns such
Prior IP to the Company under the terms of a separate written instrument. If no Prior IP is listed
on Exhibit A, the Executive represents that no Prior IP exists. The Executive recognizes
that the protection of the Intellectual Property of the Company against unauthorized disclosure and
use is of critical importance to the Company, and therefore, the Executive agrees to use his best
efforts and exercise utmost diligence to protect and safeguard the Intellectual Property of the
Company and its Affiliates, if any, and, except as may be expressly required by the Company in
connection with the Executive’s performance of his obligations to the Company under this Agreement,
the Executive shall not, either during the Term of this Agreement or thereafter, directly or
indirectly, use for his own benefit or for the benefit of another, or disclose to another, any of
such Intellectual Property.
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would affect the performance of his obligations hereunder. The Executive will not disclose to
or use on behalf of the Company any proprietary information of a third party without such party’s
consent.
(a) “Affiliates” means all persons and entities directly or indirectly controlling, controlled
by or under common control with the Company, where control may be by either management authority or
equity interest.
(b) “Confidential Information” means any and all information of the Company and its Affiliates
that is not generally known by others. Confidential Information includes without limitation such
information relating to (i) the development, research, testing, manufacturing, marketing and
financial activities of the Company and its Affiliates, (ii) the Products, (iii) the costs, sources
of supply, financial performance and strategic plans of the Company and its Affiliates, (iv) the
identity and special needs of the customers of the Company and its Affiliates and (v) the people
and organizations with whom the Company and its Affiliates have business relationships and those
relationships. Confidential Information also includes comparable information that the Company or
any of its Affiliates have received belonging to others or which was received by the Company or any
of its Affiliates with any understanding that it would not be disclosed.
(c) “Good Reason” means: (i) the relocation of the Executive’s principal office, without his
prior consent, to a location more than thirty (30) miles from its location on the day prior to the
Change in Control; (ii) failure of the Company to continue the Executive in the position held
immediately prior to the Change of Control; or (iii) material and substantial diminution in the
nature or scope of the Executive’s responsibilities, duties or authority; however, the Company’s
failure to continue the Executive’s appointment or election as a director or officer of any of its
Affiliates and any diminution of the business of the Company or any of its Affiliates, including
without limitation the sale or transfer of any or all of the assets of the Company or any of its
Affiliates, shall not constitute “Good Reason”.
(d) “Intellectual Property” means inventions, discoveries, developments, methods, processes,
compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) conceived, made, created, developed or reduced to practice by the Executive (whether
alone or with others, whether or not during normal business hours or on or off Company premises)
during the Executive’s employment and during the period of twelve (12) months immediately following
termination of his employment that relate to either the Products or any prospective activity of the
Company or any of its Affiliates.
(e) “Person” means an individual, a corporation, an association, a
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partnership, an estate, a trust and any other entity or organization, other than the Company
or any of its Affiliates.
(f) “Products” mean all products planned, researched, developed, under development, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any
of its Affiliates, together with all services provided or planned by the Company or any of its
Affiliates, during the Executive’s employment.
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24. Governing Law. This is a contract and shall be construed and enforced under and
be governed in all respects by the laws of the Commonwealth of Massachusetts, without regard to the
conflict of laws principles thereof.
[SIGNATURE PAGE FOLLOWS]
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THE EXECUTIVE: | ANTIGENICS INC., a Delaware corporation | |||||||
/s/ Xxxxx Xxxxxxx
|
By: | /s/ Xxxx X. Xxxxx | ||||||
Xxxxx Xxxxxxx |
||||||||
Name: | Xxxx X. Xxxxx | |||||||
Title: | Chairman and CEO | |||||||
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EXHIBIT A
LIST OF PRIOR IP
NONE
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