Exhibit 10.3

 

 

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KEY EMPLOYEE RETENTION INCENTIVE AGREEMENT

This Key Employee Retention Incentive Agreement (this “Agreement”) is made and
entered into effective as of November 4, 2014, 2014 (the “Effective Date”),
between Dendreon Corporation (the “Company”), and Greg Cox (“Employee”).

RECITALS

A. Employee occupies a key position with the Company. In order to ensure the
continued effective conduct of the Company’s business, the Company will require
the continuous services of Employee as the Company explores alternatives for
maximizing the Company’s value.

B. Employee has provided, and is expected to continue to provide, essential and
critical services necessary for the Company to maintain and preserve its value
and that the loss of Employee would adversely impact the Company’s ability to
execute on intended strategic alternatives.

C. The Company desires to offer Employee a retention incentive to encourage
Employee to remain with Dendreon throughout the transition process.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and with reference to the above recitals, the parties hereby
agree as follows:

1. Definitions. For purposes of this Agreement:

(a) “Board” shall mean the Company’s Board of Directors.

(b) “Cause” shall exist where, in the Company’s sole reasonable discretion, the
Company determines that (i) Employee has been insubordinate or refused or failed
to carry out the instructions of the Company or the Board relating to the
Company’s business and strategic plans for the Company; (ii) Employee has
engaged in misconduct or negligence in performing Employee’s duties and
responsibilities; (iii) Employee has engaged in conduct which is dishonest,
criminal, fraudulent, or otherwise involves moral turpitude, or which is
materially injurious to the Company; and/or (iv) Employee has engaged in
activity prohibited by any other agreement between Employee and the Company. For
the avoidance of doubt, this definition of Cause shall apply only to this
Agreement and shall have no effect on any other agreement, plan or policy of the
Company that may apply to the Employee and the definition of “cause” contained
in such agreement, plan or policy shall control.

(c) “Disability” shall have the meaning as provided under Section 409A.

(d) “Retention Incentive” shall mean a cash award as described in Section 2
hereof.

(e) “Net Retention Incentive” shall mean the Retention Incentive after reduction
for applicable withholding taxes and other deductions.

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(f) “Repayment Trigger” has the meaning specified in Section 2(b).

(g) “Section 409A” has the meaning specified in Section 10.

(h) “Transaction” shall mean the first to occur of the following: (i) a
transaction or series of transactions pursuant to which any Person acquires,
directly or indirectly, securities of the Company (not including the securities
beneficially owned by such Person or any securities acquired directly from the
Company or any affiliate thereof) representing 50% or more of the combined
voting power of the Company’s then outstanding securities; (ii) a merger,
amalgamation or consolidation of the Company with any other corporation, other
than a merger, amalgamation or consolidation which results in the voting
securities of the Company outstanding immediately prior to such merger,
amalgamation or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof) at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger, amalgamation or consolidation;
(iii) the sale or disposition by the Company of all or substantially all of the
Company’s assets (whether or not pursuant to Chapter 11 of Title 11 of the
United States Code), other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least fifty percent
(50%) of the combined voting power of the voting securities of which are owned
by shareholders of the Company following the completion of such transaction in
substantially the same proportions as their ownership of the Company immediately
prior to such sale; or (iv) a restructuring, reorganization (whether or not
pursuant to Chapter 11 of Title 11 of the United States Code) and/or
recapitalization of all or substantially all of the Company’s outstanding
indebtedness (including bank debt, bond debt, and other on and off balance sheet
indebtedness), trade claims, leases (both on and off balance sheet) or other
liabilities. For purposes of this Section 1(d), “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act of 1934, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include
(i) the Company or any subsidiary thereof, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of shares of the Company.

2. Retention Incentive.

(a) Payment of the Retention Incentive. The Company shall pay to Employee a
Retention Incentive, in a lump sum payment, in an amount equal to one hundred
and thirty-five thousand dollars ($135,000.00) no later than the first regular
scheduled payroll date following the Effective Date.

(b) Repayment of the Retention Incentive. Employee will be required to repay to
the Company the Net Retention Incentive, to the extent previously paid to
Employee in accordance with Section 2(a), in the event Employee’s employment
with the Company terminates for any reason prior to a Transaction in which case
Employee shall make such repayment no later than thirty (30) days following
Employee’s termination of employment (the “Repayment Trigger”); provided,
however, there shall be no Repayment Trigger for a termination by the Company
without Cause or due to the Employee’s death or Disability. If the Repayment
Trigger occurs in 2015 (except in the case of a termination of employment by the
Company for Cause), the Net Retention Incentive to be repaid shall be reduced by
the amount of taxes paid by Employee in respect of the Retention Incentive, if
any, that Employee is unable to recover plus any additional amount required to
put Employee in the same after-tax position as if the Retention Incentive had
not been paid, provided that Employee submits documentation in a form reasonably
acceptable to the Company supporting that Employee is unable to recover such
taxes.

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3. Withholding. The Retention Incentive payable to Employee shall be reported as
income on the Employee’s Form W-2 for the 2014 fiscal year and shall be subject
to applicable taxes and withholding.

4. Effect on Severance and Other Benefits. This Agreement shall not affect
Employee’s eligibility or entitlement to receive any benefits payable to
Employee under any severance, change of control or similar plan, policy or
agreement with the Company.

5. Other Rights and Agreements. This Agreement does not create any employment
rights not specifically set forth herein with respect to Employee. An Employee’s
employment remains at-will and can be terminated by the Company at any time and
for any reason, with or without cause. This Agreement contains the entire
understanding of the Company and Employee with respect to the subject matter
hereof.

6. Confidentiality. Employee agrees that the matters described in this Agreement
are highly confidential. Accordingly, except as required by applicable law,
Employee agrees and covenants that he will not disclose, reveal, publish,
disseminate, or discuss, directly or indirectly, to or with any other person or
entity the terms of this Agreement other than his immediate family, his/her
lawyer and his/her tax advisor and that any such disclosure, revelation,
publication, dissemination or discussion shall result in the immediate
forfeiture of the entire Retention Incentive.

7. Amendment. This Agreement may be amended or revised only by written agreement
signed by an authorized officer of the Company and Employee.

8. Binding Effect. This Agreement shall be binding on Employee, his/her
executor, administrator and heirs, but may not be assigned by him/her. This
Agreement may be transferred or assigned by the Company and shall be binding on
the transferee or assignee. This Agreement shall automatically be transferred or
assigned to and be binding upon any successor in interest to the Company,
whether by merger, consolidation, sale of stock, sale of assets or otherwise.

9. Applicable Law. This Agreement shall be construed and enforced in accordance
with the laws of the state of Delaware, without giving effect to the principles
of conflict of laws thereof.

10. Section 409A. The Company intends that the Retention Incentive is not
compensation paid under a “nonqualified deferred compensation plan” within the
meaning of section 409A of the Internal Revenue Code of 1986, as amended,
(“Section 409A”) , and this Agreement shall be interpreted, construed and
administered in a manner that reflects this intention.

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

DENDREON CORPORATION By:  

/s/ W. Thomas Amick

Name:   W. Thomas Amick Title:   President and Chief Executive Officer EMPLOYEE

/s/ Greg Cox

Greg Cox