Exhibit 10.16

AGREEMENT

 

AGREEMENT made and entered into in Lexington, MA, by and between Agenus Inc.
(the “Company”), a Delaware corporation with a principal place of business at 3
Forbes Rd. Lexington, MA 02421, and Jean-Marie Cuillerot, MD (the “Executive”),
effective as of this 10th day of March, 2017 (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.  

WHEREAS, the operations of the Company and its Affiliates are a complex matter
requiring direction and leadership in a variety of arenas;

WHEREAS, the Executive is possessed of certain experience and expertise that
qualify him/her to provide the direction and leadership required by the Company;
and

WHEREAS, subject to the terms and conditions hereinafter set forth, the Company
therefore wishes to promote and continue to employ the Executive and the
Executive wishes to accept such promotion and continued employment;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree:

1. Employment.  Subject to the terms and conditions set forth in this Agreement,
the Company hereby offers and the Executive hereby accepts continued employment.

2. Term.This Agreement will continue in effect until terminated in accordance
with Section 5 hereof.  The term of this Agreement is hereafter referred to as
“Term”.

3. Capacity and Performance.

(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/her 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/her 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/her
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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4. Compensation and Benefits.  As compensation for all services performed by the
Executive under and during the Term hereof and subject to performance of the
Executive's duties and of the obligations of the Executive to the Company and
its Affiliates, pursuant to this Agreement or otherwise:

(a) Base Salary.  During the Term hereof, the Company shall pay the Executive a
minimum base salary at the rate of  four hundred thousand dollars ($400,000) per
annum, payable in accordance with the payroll practices of the Company for its
executives and subject to increase by the Board, in its sole discretion.  Such
base salary, as from time to time increased, is hereafter referred to as the
“Base Salary”.  The Board shall review the Base Salary no less than annually.

(b) Incentive and Bonus Compensation.  During the Term hereof, the Executive
shall be entitled to participate in the Company’s Executive Incentive Plan to
the extent eligible and in accordance with the terms thereof, as such terms may
be modified or amended by the Company from time to time; provided, however, that
nothing contained herein shall obligate the Company to continue such incentive
compensation program.  The Executive’s target incentive bonus under the
Executive Incentive Plan is 40% of his/her Base Salary, with the actual bonus,
if any, to be determined by the Board in accordance with the terms of the
Executive Incentive Plan. Such target may be modified by the Company from time
to time, in its sole discretion.  Any compensation paid to the Executive under
the Executive Incentive Plan shall be in addition to the Base Salary.  

(c) Stock Options.  At the discretion of the Compensation Committee of the
Board, the Executive may be granted additional options to purchase shares of
stock of the Company in the future.  Any existing or future grants shall be
governed by the terms of the applicable Company stock option plan, as amended
from time to time, and any stock option certificate, stock option agreement, and
other restrictions generally applicable to Company stock options.  

(d) Vacations.  During the Term hereof, the Executive shall be entitled to
accrue four weeks of vacation per annum, to be taken at such times and intervals
as shall be determined by the Executive, subject to the reasonable business
needs of the Company.  Vacation shall otherwise be governed by the policies of
the Company, as in effect from time to time.  

(e) Other Benefits.  During the Term hereof and subject to any contribution
therefor generally required of employees (including executives) of the Company,
the Executive shall be entitled to participate in any and all employee benefit
plans from time to time in effect for employees of the Company generally, except
to the extent such plans are in a category of benefit otherwise provided to the
Executive.  Such participation shall be subject to (i) the terms of the
applicable plan documents, (ii) generally applicable Company policies and (iii)
the discretion of the Board or any administrative or other committee provided
for in or contemplated by such plan.  The Company may alter, modify, add to or
delete its employee benefit plans at any time as it, in its sole judgment,
determines to be appropriate, without recourse by the Executive.  

 

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(f) Business Expenses.  The Company shall pay or reimburse the Executive for all
reasonable, customary and necessary business expenses incurred or paid by the
Executive in the performance of his/her duties and responsibilities hereunder,
subject to any maximum annual limit and other restrictions on such expenses as
set forth in the Company’s Travel Policy as may be amended from time to time,
and to such reasonable substantiation and documentation as may be specified by
the Company from time to time.  The Executive’s right to payment or
reimbursement for business expenses hereunder shall be subject to the following
additional rules: (i) the amount of expenses eligible for payment or
reimbursement during any calendar year shall not affect the expenses eligible
for payment or reimbursement in any other calendar year, (ii) payment or
reimbursement shall be made not later than December 31 of the calendar year
following the calendar year in which the expense or payment was incurred, and
(iii) the right to payment or reimbursement is not subject to liquidation or
exchange for any other benefit.

5. Termination of Employment and Severance Benefits.  Notwithstanding the
provisions of Section 2 hereof, but subject to Section 6 hereof, the Executive's
employment hereunder shall terminate prior to the expiration of the Term under
the following circumstances:

(a) Death.  In the event of the Executive's death during the Term hereof, the
Executive's employment hereunder shall immediately and automatically
terminate.  In the event of the Executive's death during the Term hereof, the
Company shall pay to the Executive's designated beneficiary or, if no
beneficiary has been designated by the Executive, to his/her estate, any earned
and unpaid Base Salary and accrued but unused vacation through the date of
his/her death (all of the foregoing, “Final Compensation”).  The Company shall
have no further obligation or liability to the Executive.

(b) Disability.  

(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/her 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/her 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/her employment,
whichever shall first occur.

 

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(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/her 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/her 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/her 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 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 Final Compensation due
to the Executive.  The Company shall have no further obligation or liability to
the Executive.

(c) By the Company for Cause.  The Company may terminate the Executive’s
employment hereunder for Cause at any time upon notice to the Executive setting
forth in reasonable detail the nature of such Cause.  The following, as
determined by the Company in its reasonable judgment, shall constitute Cause for
termination:

(i) The Executive’s failure to perform (other than by reason of disability), or
negligence in the performance of, his/her 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, or could reasonably be expected to
be, 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 any Final Compensation due to the Executive.

 

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(d) By the Company Other than for Cause.  The Company may terminate the
Executive's employment with the Company other than for Cause at any time upon
notice to the Executive.  In the event of such termination, in addition to any
Final Compensation due to the Executive, the Company shall provide the Executive
the following (in the aggregate, the “Severance Benefits”): (i) the Company will
continue to pay the Executive his/her Base Salary, at the rate in effect on the
date of termination, until the conclusion of a period of twelve (12) months
following the date of termination, (ii) the Company shall pay to the Executive
in one lump sum an amount equal to 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, (iii) the Company shall also, until the conclusion of a period of
twelve (12) months following the date of termination, pay the Executive an
amount equal to the full premium cost of the Executive's participation in the
Company's group medical and dental insurance plans pursuant to the federal law
known as COBRA, provided that the Executive is entitled to continue such
participation under applicable law and plan terms, and  (iv) 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.  Furthermore, at the sole discretion of the Compensation Committee of
the Board, any unvested options to purchase Company stock may be
accelerated.  Notwithstanding anything in the Agreement to the contrary, in the
event any provision contained in this Agreement regarding payment or assistance
to the Executive related to the continuation of healthcare coverage for the
Executive would cause the Company to violate the anti-discrimination rules of
the healthcare reform laws known as the Patient Protection and Affordable Care
Act, or would otherwise result in the imposition of taxes or penalties on the
Company, such provision shall be a nullity.

(e) By the Executive for a Compensation Reduction.  The Executive may terminate
his/her employment hereunder based on a material reduction in Base Salary or
benefits due in accordance with the terms of this Agreement (“Compensation
Reduction”), provided that Executive provides notice to the Company setting
forth in reasonable detail the nature of such Compensation Reduction, and
provided further that the Company shall have thirty (30) days from such notice
to cure such reduction.  In the event of termination in accordance with this
Section 5(e), the Executive will be entitled to receive the Severance Benefits
he/she would have been entitled to receive had he/she been terminated by the
Company other than for Cause pursuant to Section 5(d) above.  Notwithstanding
anything in this Section 5(e) to the contrary, this Section 5(e) shall only be
applicable if the Executive provides notice to the Company of the Compensation
Reduction within 30 days following the initial existence of the condition
claimed by the Executive to be a Compensation Reduction, and the Executive, in
fact, terminates employment with the Company within 90 days of the initial
existence of such condition.

 

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(f) By the Executive Other than for a Compensation Reduction.  The Executive may
terminate his/her employment hereunder at any time upon 120 days’ notice to the
Company, unless such termination would violate any obligation of the Executive
to the Company under a separate severance agreement.  In the event of
termination of the Executive pursuant to this Section 5(f), the Board may elect
to waive the period of notice, or any portion thereof, and, if the Board so
elects, the Company will pay the Executive his/her Base Salary for the notice
period (or for any remaining portion of the period so waived).  The Company
shall also pay the Executive any Final Compensation due him/her.

(g) Upon a Change in Control.

(i) If a Change in Control occurs, on the date of such Change in Control
fifty-percent (50%) of any stock options or shares of restricted stock of the
Company previously granted or issued to the Executive that are outstanding and
unvested as of the date of the Change in Control shall become vested,
exercisable and, in the case of shares of restricted stock, no longer subject to
forfeiture, provided that the Executive is employed by the Company on the date
of such Change in Control.

(ii) If a Change in Control occurs and within eighteen (18) months following
such Change in Control, the Company terminates the Executive’s employment other
than for Cause, or the Executive terminates his/her 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,
but in addition to any Final Compensation due to the Executive, the Company
shall provide the Executive the following (in the aggregate, the “Change in
Control Severance Benefits”):  (A) the Company shall pay to the Executive in one
lump sum an amount equal to (x) eighteen (18) months Base Salary at the rate in
effect on the date of termination, plus (y) 150% of the higher of (I) the
Executive’s target incentive bonus under the Executive Incentive Plan for the
year in which the Executive’s employment is terminated or (II) 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; (B) subject to the last sentence of Section 5(d), the
Company 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; (C) any (x) outstanding unvested options granted
or issued 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 and (y) shares of unvested restricted stock of the
Company granted or issued to the Executive as of the date of the Change in
Control shall become vested and no longer subject to forfeiture; and (D) 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.  

 

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(iii) In the event that it is determined that any payment or benefit provided by
the Company or any of its Affiliates to or for the benefit of Executive, either
under this Agreement or otherwise, would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code or any successor provision(s)
(“Section 4999”), the payments or benefits otherwise payable will be
automatically reduced to the extent necessary so that such excise tax shall not
be applicable.  The specific payments to be reduced for this purpose will be
determined at the Company’s discretion, but reductions shall first be applied to
payments that are in the form of cash payments (rather than accelerated vesting
of equity-based grants).  

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 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.

(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 January 25, 2017, 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 January
25, 2017 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

 

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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 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; notwithstanding the foregoing, no transaction or series of transactions
shall constitute a Change of Control unless such transaction or series of
transactions constitutes a “change in control event” within the meaning of
Treasury Regulation Section 1.409A-3(i)(5)(i).  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).

(h) 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).  

6. Effect of Termination.  The provisions of this Section 6 shall apply to
termination due to the expiration of the Term hereof, termination pursuant to
Section 5 or otherwise.

(a) Provision by the Company of any Severance Benefits or Change in Control
Severance Benefits 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 Severance Benefits or Change in Control Severance Benefits
hereunder, the Executive must first execute and return to the Company a timely
and effective a General Release of Claims in a form acceptable to the
Company.  The General Release of Claims must become effective, if at all, by the
sixtieth (60th) calendar day following the date the Executive’s employment is
terminated.  

(b) Except for medical and dental insurance coverage continued pursuant to
Section 5 hereof, or any right of the Executive to continue such plan
participation in accordance with applicable law, 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 Severance
Benefits or Change in Control Severance Benefits provided 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 and 9 hereof.  The obligation of the Company to provide Severance
Benefits or Change in Control Severance Benefits hereunder 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, no compensation is earned by, or in any way owing to,
Executive after termination of employment.

 

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(d) Subject to Section 6(e), (i) any payments to be made to the Executive (or to
the Executive’s designated beneficiary or estate) hereunder following the
Executive’s termination of employment, other than payments that are expressly
stated as paid in a series of installments, shall be paid in the form of a
single lump sum, which lump sum shall be paid to the Executive on the first
regular payday that follows the expiration of 60 days following the date of the
Executive’s termination of employment; and (ii) any payments to be made in a
series of installments to the Executive (or to the Executive’s designated
beneficiary or estate) hereunder following the Executive’s termination of
employment shall be paid in the form of salary continuation, payable in
accordance with the normal payroll practices of the Company, the first payment
of which shall be paid to the Executive on the first regular payday that follows
the expiration of 60 days following the date of termination; but that first
payment shall be retroactive to the day following the date the Executive’s
employment terminates.

(e) Notwithstanding anything to the contrary in this Agreement, if at the time
your employment terminates, you are a “specified employee,” as defined below,
any and all amounts payable under this Agreement on account of such separation
from service that would (but for this provision) be payable within six (6)
months following the date of termination, shall instead be paid on the next
business day following the expiration of such six (6) month period or, if
earlier, upon your death; except (A) to the extent of amounts that do not
constitute a deferral of compensation within the meaning of Treasury regulation
Section 1.409A-1(b) (including without limitation by reason of the safe harbor
set forth in Section 1.409A-1(b)(9)(iii), as determined by the Company in its
reasonable good faith discretion); (B) benefits which qualify as excepted
welfare benefits pursuant to Treasury regulation Section 1.409A-1(a)(5); or (C)
other amounts or benefits that are not subject to the requirements of Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).  

(f) For purposes of this Agreement, all references to “termination of
employment” and correlative phrases shall be construed to require a “separation
from service” (as defined in Section 1.409A-1(h) of the Treasury regulations
after giving effect to the presumptions contained therein), and the term
“specified employee” means an individual determined by the Company to be a
specified employee under Treasury regulation Section 1.409A-1(i).

(g) Each payment made under this Agreement shall be treated as a separate
payment and the right to a series of installment payments under this Agreement
is to be treated as a right to a series of separate payments.

(h) In no event shall the Company have any liability relating to the failure or
alleged failure of any payment or benefit under this Agreement to comply with,
or be exempt from, the requirements of Section 409A.

 

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7. Confidential Information.  

(a) The Executive acknowledges that the Company and its Affiliates continually
develop Confidential Information, that the Executive has developed and may
develop Confidential Information for the Company or its Affiliates and that the
Executive has learned and 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 (except as required by
applicable law or for the proper performance of his/her duties and
responsibilities to the Company and its Affiliates), or use for his/her own
benefit or gain, any Confidential Information obtained by the Executive incident
to his/her employment or other association with the Company or any of its
Affiliates.  The Executive understands that the restriction shall continue to
apply after his/her employment terminates, regardless of the reason for such
termination.  Nothing in this Agreement limits, restricts or in any other way
affects the Executive’s communicating with any governmental agency or entity, or
communicating with any official or staff person of a governmental agency or
entity, concerning matters relevant to the governmental agency or entity.  The
Executive cannot be held criminally or civilly liable under any federal or state
trade secret law for disclosing a trade secret (1) in confidence to a federal,
state, or local government official, either directly or indirectly, or to an
attorney, solely for the purpose of reporting or investigating a suspected
violation of law, or (2) in a complaint or other document filed under seal in a
lawsuit or other proceeding.  Notwithstanding this immunity from liability, the
Executive may be held liable if the Executive unlawfully accesses trade secrets
by unauthorized means.

(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/her 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.  The Executive also
agrees that, upon request of any duly authorized officer of the Company, the
Executive shall disclose all passwords and passcodes necessary or desirable to
obtain access to, or that would assist in obtaining access to, any information
which the Executive has password-protected on any computer equipment, network or
system of the Company or any of its Affiliates.

(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.  

 

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8. Restricted Activities.  The Executive agrees that the following restrictions
on his/her activities during and after his/her employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests of
the Company and its Affiliates:

(a) While the Executive is employed by the Company and for the greater of (i)
twelve (12) months after his/her employment terminates or (ii) the period during
which the Executive is receiving payments under Section 5 (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 in any geographic area in
which the Company or any of its Affiliates does business or is actively planning
to do business during the Executive’s employment, or with respect to the portion
of the Non-Competition Period that follows the termination of his/her
employment, at the time his/her employment terminates (the “Restricted Area”) or
undertake any planning for any business competitive with the Company or any of
its Affiliates in the Restricted Area.  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 all or any portion of the business of
the Company or any of its Affiliates as conducted or under consideration at any
time during the Executive's employment within the Restricted Area and further
agrees not to work for or provide services, in any capacity, whether as an
employee, independent contractor or otherwise, whether with or without
compensation, to any Person that is engaged in any business that is competitive
with all or any portion of the business of the Company or any of its Affiliates,
as conducted or in active planning during his/her employment with the Company
or, with respect to the portion of the Non-Competition Period that follows the
termination of his/her employment, at the time his/her employment
terminates.  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/her employment with the Company or any
Affiliate of the Company, he/she 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/her duties and obligations to the Company or any of its Affiliates.

(c) The Executive further agrees that while he/she is employed by the Company or
any Affiliate of the Company and thereafter during the Non-Competition Period,
except as required for the proper performance of his/her duties and
responsibilities to the Company and its Affiliates, 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/her
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

 

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such customer conducts or could conduct with the Company or any of its
Affiliates; provided, however, that these restrictions shall apply (y) only with
respect to those Persons who are or have been a customer or employee of the
Company or any of its Affiliates at any time within the immediately preceding
one-year period, and (z) only if the Executive has performed work for such
customer during his/her employment with the Company or one of its Affiliates or
been introduced to, or otherwise had contact with, such customer as a result of
his/her employment or other associations with the Company or one of its
Affiliates or has had access to Confidential Information which would assist in
the Executive in his/her solicitation of such customer.

9. Assignment of Rights to Intellectual Property.  The Executive shall promptly
and fully disclose, if he/she has not done so already, all Intellectual Property
to the Company.    The Executive shall maintain adequate records (whether
written, electronic, or otherwise) to document the Intellectual Property,
including without limitation the conception and reduction to practice of all
inventions, and shall make such records available to the Company upon
request.  The Company shall have sole ownership of all Intellectual Property and
all such records with respect thereto. The Executive hereby assigns, conveys,
and grants to the Company (or as otherwise directed by the Company), and agrees
to assign, convey and grant to the Company (or as otherwise directed by the
Company), all of his/her right, title, and interest in and to the Intellectual
Property and any and all patents, patent applications, and copyrights relating
to the Intellectual Property.   The Executive agrees to execute any and all
applications for domestic and foreign patents, copyrights or other proprietary
rights and to do such other acts (including without limitation the execution and
delivery of instruments of further assurance or confirmation) requested by the
Company to assign the Intellectual Property to the Company and to permit the
Company to enforce any patents, copyrights or other proprietary rights to the
Intellectual Property.  The Executive will not charge the Company for time spent
in complying with these obligations.  All copyrightable works that the Executive
creates shall be considered “work made for hire” and shall, upon creation, be
owned exclusively by the Company.

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 Executive’s
employment with the Company (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/her 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/her 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/her own
benefit or for the benefit of another, or disclose to another, any of such
Intellectual Property.

 

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10. Notification Requirement.  Until the conclusion of the Non-Competition
Period the Executive shall give notice to the Company of each new business
activity he/she plans to undertake, at least twenty-one (21) days prior to
beginning any such activity.   Such notice shall state the name and address of
the Person for whom such activity is undertaken and the nature of the
Executive's business relationship(s) and position(s) with such Person.  The
Executive shall provide the Company with such other pertinent information
concerning such business activity as the Company may reasonably request in order
to determine the Executive's continued compliance with his/her obligations under
Sections 7, 8 and 9 hereof.

11. Enforcement of Covenants.  The Executive acknowledges that he/she has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him/her pursuant to Sections 7 and 8
hereof.  The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the goodwill, Confidential Information and
other legitimate interests of the Company and its Affiliates and that each and
every one of the restraints is reasonable in respect to subject matter, length
of time and geographic area.  The Executive further acknowledges that, were
he/she to breach any of the covenants contained in Sections 7 or 8 hereof, the
damage to the Company would be irreparable.  The Executive therefore agrees that
the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by the Executive of any of said covenants, without having to
post bond, together with an award of its attorneys’ fees incurred in connection
with securing any relief hereunder.  The parties further agree that, in the
event that any provision of Section 7 or 8 hereof shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.  The Executive agrees that
the Non-Competition Period shall be tolled, and shall not run, during any period
of time in which he/she is in violation of the terms thereof, in order that the
Company and its Affiliates shall have all of the agreed-upon temporal protection
recited herein. Each of the Company’s Affiliates shall have the right to enforce
all of the Executive’s obligations to that Affiliate under this Agreement,
including without limitation pursuant to Section 7 or 8 hereof. No breach of any
provision of this Agreement by the Company, or any other claimed breach of
contract or violation of law, or change in the nature or scope of the
Executive’s employment or other relationship with the Company or any of its
Affiliates, shall operate to extinguish the Executive’s obligation to comply
with Sections 7 and 8 hereof.

12. Conflicting Agreements.  The Executive hereby represents and warrants that
the execution of this Agreement and the performance of his/her obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound and that the Executive is not now subject
to any covenants against competition or similar covenants, or any other
obligations under any court order, judgment or decree, that would affect the
performance of his/her 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.

 

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13. Indemnification.  The Company shall indemnify the Executive to the extent
provided in its then current Articles or By-Laws.  The Executive agrees to
promptly notify the Company of any actual or threatened claim arising out of or
as a result of his/her employment with the Company.

14. Definitions.  For purposes of this Agreement, the following definitions
apply:

(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 the public.  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 the nature and
substance of 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/her 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 in 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”.  Notwithstanding anything in this Agreement
to the contrary, termination of employment by the Executive shall not be
considered to be for “Good Reason” unless (i) the Executive provides notice to
the Company of the condition claimed to be “Good Reason” within 30 days
following the initial existence of such condition, (ii) the Company fails to
remedy such condition within 30 days following its receipt of such notice from
the Executive, and (iii) the Executive, in fact, terminates employment with the
Company within 90 days of the initial existence of such condition.  

 

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(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/her 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 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.

15. Withholding.  All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.

16. Assignment.  Neither the Company nor the Executive may make any assignment
of this Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however, that the
Company may assign its rights and obligations under this Agreement without the
consent of the Executive in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, an Affiliate or any other
Person or transfer all or substantially all of its properties, stock or assets
to an Affiliate or any other Person.  This Agreement shall inure to the benefit
of and be binding upon the Company and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.

17. Severability.  If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

18. Waiver.  No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party.  The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

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19. Notices.  Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person or deposited in the United States mail, postage prepaid,
registered or certified, and addressed to the Executive at his/her last known
personal address on the books of the Company or, in the case of the Company, at
its principal place of business, attention of Senior Attorney, or to such other
address as either party may specify by notice to the other actually received.

20. Entire Agreement.  This Agreement constitutes the entire agreement between
the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment, excluding any obligations with respect to the securities
of the Company or the grant of any stock options, all of which shall remain in
full force and effect in accordance with their terms; provided, however, that
this Agreement shall not supersede any effective assignment of any invention or
other intellectual property to the Company or any of its Affiliates in effect on
the Effective Date and shall not constitute a waiver by the Company or any of
its Affiliates of any right that any of them now has or may now have under any
agreement imposing obligations on the Executive with respect to confidentiality,
non-competition, non-solicitation of employees, customers or independent
contractors or like obligations.

21. Amendment.  This Agreement may be amended or modified only by a written
instrument signed by the Executive and by an expressly authorized representative
of the Company.

22. Headings.  The headings and captions in this Agreement are for convenience
only and in no way define or describe the scope or content of any provision of
this Agreement.

23. Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.

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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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company, by its duly authorized representative, and by the Executive, as of
the date first above written.

 

THE EXECUTIVE:

 

AGENUS INC., a Delaware corporation

 

 

 

 

 

 

/s/ Jean-Marie Cuillerot

 

By:

/s/ Garo H. Armen

 

Jean-Marie Cuillerot

 

 

 

 

 

 

Name:

Garo H. Armen, Ph.D.

 

 

 

 

 

 

 

 

Title:

Chairman and CEO

 

 

 

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