Exhibit 10.55
IDM PHARMA, INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
Effective as of March 17, 1995
As Amended through December 31, 2008

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                              Page      
 
            1.   Purpose of the Plan     1   2.   Definitions     1      
2.1
  Account     1      
2.2
  Beneficiary     1      
2.3
  Benefit     1      
2.4
  Board     1      
2.5
  Code     2      
2.6
  Company     2      
2.7
  Compensation     2      
2.8
  Compensation Reductions     2      
2.9
  Deferred Compensation Agreement     2      
2.10
  Director     2      
2.11
  Effective Date     2      
2.12
  Eligible Director     2      
2.13
  Fair Market Value     2      
2.14
  Non-Employee Director     2      
2.15
  Participant     2      
2.16
  Plan     2      
2.17
  Plan Year     3      
2.18
  Post-2004 Deferrals     3      
2.19
  Pre-2005 Deferrals     3      
2.20
  Section 409A     3      
2.21
  Share     3      
2.22
  Termination of Service     3      
2.23
  Valuation Date     3   3.   Participation     3      
3.1
  Participation of Eligible Directors     3      
3.2
  Irrevocability of Participation During the Plan Year     4      
3.3
  Suspended Participation     4      
3.4
  Termination of Participation     5  

1

--------------------------------------------------------------------------------

 

                              Page      
 
            4.   Plan Accounts     5      
4.1
  Accounts     5      
4.2
  Investment of Accounts     5      
4.3
  Value of Accounts     5      
4.4
  Funds Unsecured     5   5.   Benefits     6      
5.1
  Termination Benefits- Distribution of Deferrals     6      
5.2
  Form of Distribution     6      
5.3
  Timing of Payments     6      
5.4
  Death Benefits     7      
5.5
  Acceleration of Payments     7      
5.6
  No Discretionary Distributions     8      
5.7
  Special Delay in Distribution Rules     8   6.   Source of Benefits     8   7.
  Administration     8      
7.1
  General     8      
7.2
  Procedures     8      
7.3
  Claims     8   8.   Amendment and Termination     9      
8.1
  Amendment or Termination     9      
8.2
  Accrued Benefits     9   9.   Adjustment of Shares; Sale or Merger of the
Company     10      
9.1
  Adjustment of Shares     10      
9.2
  Sale or Merger of the Company     10   10.   Miscellaneous     10      
10.1
  Benefits Fully Vested     10      
10.2
  No Right to Continue as Director     11      
10.3
  Successors and Assigns     11      
10.4
  Assignment or Alienation     11      
10.5
  Entire Agreement     11      
10.6
  Headings     11      
10.7
  Gender and Number     11      
10.8
  Governing Law     11  

2

--------------------------------------------------------------------------------

 

                              Page      
 
               
10.9
  Compliance with Section 409A of the Code     11      
10.10
  Scrievener’s Error     11      
10.11
  Plan Restatement Effective Date     12  

3

--------------------------------------------------------------------------------

 

IDM PHARMA, INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
(As Amended through December 31, 2008)
     IDM Pharma, Inc., a Delaware corporation (the “Company”), previously
adopted effective as of March 17, 1995 the IDM Pharma, Inc. Directors’ Deferred
Compensation Plan (the “Plan”) as an amendment and restatement of the Cytel
Corporation Directors’ Deferred Compensation Plan for the nonemployee directors
of the Company upon the terms and conditions set forth below.
     The Company believes that it is in its best interests to amend and restate
this Plan with respect to Post-2004 Deferrals for purposes of compliance with
Section 409A of the Internal Revenue Code of 1986, as amended, and its
regulations and other guidance thereunder.
     The benefits payable under the Plan are and at all times will be mere
unsecured contractual rights against the Company payable from the Company’s
general assets. It is intended that the Plan shall constitute an unfunded
deferred compensation arrangement for purposes of United States federal income
tax laws, and all documents, agreements or instruments made or given pursuant to
the Plan shall be interpreted so as to carry out this intent.
1. Purpose of the Plan
     The purpose of this Plan is to provide deferred compensation benefits to
nonemployee directors of the Company, payable by the Company. This Plan will
provide benefits derived from contributions by the Company hereunder of a
nonemployee director’s compensation as to which he or she has elected to defer
payment under the Plan.
2. Definitions
     The capitalized terms defined in this Section 2 shall have the meanings set
forth below:
     2.1 Account. A separate Plan account, which is a bookkeeping record,
established for each Participant to which shall be allocated Compensation
Reductions in accordance with Section 4.1.
     2.2 Beneficiary. The beneficiary or beneficiaries designated by a
Participant to receive any remaining Benefits due under the Plan after his or
her death. If the Participant has not designated a Beneficiary, the Beneficiary
shall be the Participant’s surviving spouse or, if none, the Participant’s
estate.
     2.3 Benefit. The benefit or benefits provided under this Plan, which for a
Participant shall be equal to the account balance of such Participant’s Account.
     2.4 Board. The Board of Directors of the Company.

1

--------------------------------------------------------------------------------

 

     2.5 Code. The Internal Revenue Code of 1986, as it may be amended from time
to time.
     2.6 Company. IDM Pharma, Inc., a Delaware corporation, or any successor
corporation.
     2.7 Compensation. All the non-equity fees (paid in cash or by check)
received by a Participant from the Company for a Plan Year for his or her
services as a Director, including but not limited to, the retainer fee and
meeting attendance fees.
     2.8 Compensation Reductions. The percentage of Compensation which a
Participant has elected to defer pursuant to a Deferred Compensation Agreement,
and that the Company and the Participant mutually agree shall be deferred in
accordance with the Plan. Participants may elect to defer any whole percentage
of Compensation up to 100% of Compensation.
     2.9 Deferred Compensation Agreement. An agreement by which a Participant
elects to reduce a selected whole percentage of his or her Compensation for a
Plan Year in order for the Company to make contributions to the Plan on his or
her behalf.
     2.10 Director. A member of the Board.
     2.11 Effective Date. March 17, 1995.
     2.12 Eligible Director. A Director who is not an employee of the Company.
     2.13 Fair Market Value. The fair market value of a share of Common Stock of
the Company is the closing sales price for such stock as quoted on a national
securities exchange or the NASDAQ National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System on the day of
determination, as reported in The Wall Street Journal or such other source as
the Company deems reliable.
     2.14 Non-Employee Director. A Director who either (i) is not a current
employee or officer of the Company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
of 1933, as amended (“Regulation S-K”)), does not possess an interest in any
other transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3
promulgated under the Exchange Act of 1934, as amended.
     2.15 Participant. Any Eligible Director who has elected to participate in
the Plan by entering into a Deferred Compensation Agreement.
     2.16 Plan. This IDM Pharma, Inc. Directors’ Deferred Compensation Plan, as
amended from time to time.

2

--------------------------------------------------------------------------------

 

     2.17 Plan Year. The calendar year.
     2.18 Post-2004 Deferrals. The portion of the Account other than Pre-2005
Deferrals. The Plan shall maintain separate accounting for Post-2004 Deferrals.
     2.19 Pre-2005 Deferrals. That portion of the Account determined as of
December 31, 2004, to which the Participant has a legally binding right to be
paid, and the right to which is earned and vested as of December 31, 2004, in
accordance with Section 409A and its regulations and other guidance thereunder,
plus earnings and losses allocable to such amounts. The Plan shall maintain
separate accounting for Pre-2005 Deferrals.
     2.20 Section 409A or Code Section 409A. Section 409A of the Internal
Revenue Code of 1986, as it may be amended from time to time, and the
regulations and other guidance thereunder.
     2.21 Share. A participating interest under the Plan, which shall be equal
to the Fair Market Value of a share of Common Stock of the Company.
     2.22 Termination of Service. A Participant’s termination of directorship
for any reason that is a “separation from service” from the Company for purposes
of Section 409A of the Code. The determination of whether a Participant has had
a Termination of Service shall be made in a manner consistent with Section 409A
of the Code and Treas. Reg § 1.409A-(1)(h) or as this definition may later be
modified by other regulatory pronouncements.
     2.23 Valuation Date. The last day of each calendar quarter, or such other
date as shall be established by the Company.
3. Participation
     3.1 Participation of Eligible Directors.
          (a) Each Eligible Director may begin to participate in the Plan on the
Effective Date; provided, however, that such Eligible Director completes and
signs a Deferred Compensation Agreement and returns such Deferred Compensation
Agreement to the designated representative of the Company prior to the Effective
Date or such earlier date established by the Company and announced to the
Eligible Director. Such Deferred Compensation Agreement shall be effective for
the period beginning on the Effective Date and ending on December 31, 1995.
          (b) Each Director who first becomes an Eligible Director after the
Effective Date may begin to participate in the Plan by completing and signing a
Deferred Compensation Agreement and returning such Deferred Compensation
Agreement to the designated representative of the Company; provided, however,
that such completion and return of the Deferred Compensation Agreement to the
Company occurs within thirty (30) days after the date that the Director first
becomes an Eligible Director. Such Deferred Compensation Agreement shall be
effective with respect to the portion of Compensation attributable to services
performed by the Director during the period beginning on the date the Eligible
Director completes and returns the Deferred Compensation Agreement to the
Company and ending on the last day of the

3

--------------------------------------------------------------------------------

 

Plan Year within which such participation begins, which will generally include
the retainer fees and meeting attendance fees that would otherwise have been
paid to the Eligible Director during the remainder of the Plan Year following
the return of the Deferred Compensation Agreement. Once the Eligible Director
completes and returns the Deferred Compensation Agreement to the Company within
the thirty (30) day period after the date that the Director first becomes an
Eligible Director, the election is irrevocable. Notwithstanding the foregoing,
any Deferred Compensation Agreement completed and returned to the Company on or
after December 19, 2005 shall continue to be effective for subsequent Plan Years
unless and until the Participant completes and returns a new Deferred
Compensation Agreement in accordance with Section 3.1(d) below.
          (c) An Eligible Director who did not become a Participant in
accordance with the terms of paragraph (a) or (b) may participate in the Plan
effective as of the beginning of any Plan Year following the Plan Year in which
he or she becomes an Eligible Director by completing and signing a Deferred
Compensation Agreement and returning such Deferred Compensation Agreement to the
designated representative of the Company prior to the beginning of the Plan Year
(or such earlier date established by the Company and announced to the Eligible
Director) for which deferral of Compensation is intended to commence. For
deferral elections made for the 2005 Plan Year and any previous Plan Years, such
Deferred Compensation Agreement shall be effective only for the Plan Year first
following the submission of the Deferred Compensation Agreement. For deferral
elections made for the 2006 Plan Year and any subsequent Plan Years, such
Deferred Compensation Agreement shall continue to be effective for subsequent
Plan Years unless and until the Participant completes and returns a new Deferred
Compensation Agreement in accordance with Section 3.1(d) below.
          (d) If a Participant wishes to commence deferrals of Compensation
under the terms of the Plan or change his or her elected percentage of deferred
Compensation for any Plan Year subsequent to the first Plan Year in which the
Participant began to participate in the Plan, such Participant must complete and
sign a new Deferred Compensation Agreement and return such Deferred Compensation
Agreement to the designated representative of the Company prior to the beginning
of the Plan Year (or such earlier date established by the Company and announced
to the Participant) for which such election is to be effective. For deferral
elections made for the 2005 Plan Year and any previous Plan Years, such Deferred
Compensation Agreement shall be effective only for that Plan Year. For deferral
elections made for the 2006 Plan Year and any subsequent Plan Years, such
Deferred Compensation Agreement shall continue to be effective for subsequent
Plan Years unless and until the Participant completes and returns a new Deferred
Compensation Agreement.
     3.2 Irrevocability of Participation During the Plan Year. A Participant may
not terminate or modify his or her Deferred Compensation Agreement with respect
to a Plan Year on or after the first day of such Plan Year.
     3.3 Suspended Participation. If a Participant ceases to be an Eligible
Director, but continues to be a Director, he or she shall not be eligible to
make future elections to defer Compensation under the Plan for subsequent Plan
Years. Distributions shall be made to such Participant as would otherwise be
permitted in accordance with the distribution provisions under this Plan. If
such Participant again becomes an Eligible Director in a Plan Year following the

4

--------------------------------------------------------------------------------

 

last Plan Year for which a Deferred Compensation Agreement was in effect, such
Participant may elect to participate in the Plan by following the procedures
specified in Section 3.1(c).
     3.4 Termination of Participation. A Participant shall cease to be a
Participant as of the date he or she ceases serving as a Director.
4. Plan Accounts
     4.1 Accounts. The Company shall maintain or cause to be maintained for each
Participant an Account with respect to which the Company shall allocate amounts
equal to the Participant’s Compensation Reductions for each Plan Year, effective
as of the date such Compensation Reductions would have been paid to the
Participant as Compensation in the absence of a Deferred Compensation Agreement.
     4.2 Investment of Accounts.
          (a) Each Compensation Reduction allocated to a Participant’s Account
shall be converted into that number of Shares that equal the amount of such
Compensation Reduction divided by the Fair Market Value of the Common Stock of
the Company as of the date such Compensation Reduction would have been paid to
the Participant as Compensation in the absence of a Deferred Compensation
Agreement. The calculation of the number of Shares need not be rounded to the
nearest whole Share, so that a fraction of a Share (calculated to the nearest
one-hundredth of a Share) may be allocated to a Participant’s Account.
          (b) In the event any dividends or distributions are made with respect
to the Common Stock of the Company, the Company shall allocate an amount to the
Participant’s Account that is equal to the amount of such dividends or
distributions that would have been made with respect to the Shares allocated to
a Participant’s Account if they were shares of the Common Stock of the Company.
Such dividend/distribution allocations shall be converted into that number of
whole and/or fractional Shares that equal the amount of such allocation divided
by the Fair Market Value of the Common Stock of the Company as of the date such
dividends or distributions are made with respect to the Common Stock of the
Company to the Company’s stockholders of record.
     4.3 Value of Accounts. The value of a Participant’s Account as of any
Valuation Date shall be equal to the number of Shares allocated to a
Participant’s Account multiplied by the Fair Market Value of one share of the
Common Stock of the Company.
     4.4 Funds Unsecured. Notwithstanding any other provisions of this Plan, all
Benefits payable under the Plan are subject to the claims of the general
creditors of the Company. No trust shall be established to hold any assets which
may be set aside by the Company to pay the Benefits under the Plan and the
Company shall be under no obligation to set aside any amounts to pay Benefits.
The maintenance of separate Accounts by the Company as provided herein shall
neither require nor be considered a segregation of any funds or property from
the Company’s general assets. Participants shall have no preferred claim on or
beneficial ownership interest in any assets of the Company prior to the time
actual payments of Benefits are received, and all rights of the Participants to
Benefits are mere unsecured contractual rights against the Company.

5

--------------------------------------------------------------------------------

 

5. Benefits
     5.1 Termination Benefits—Distribution of Deferrals.
          (a) For Pre-2005 Deferrals, when a Participant ceases serving as a
Director, the Participant shall be entitled to receive the value of his or her
Account determined as of the Valuation Date coinciding with or next preceding
the date of the distribution.
          (b) For Post-2004 Deferrals, when a Participant has a Termination of
Service, the Participant shall be entitled to receive the value of his or her
Account determined as of the Valuation Date coinciding with or next preceding
the date of the distribution.
     5.2 Form of Distribution.
          (a) If at the time the Participant is entitled to a distribution
pursuant to Section 5.1, the total distributable amount is less than $50,000,
the distribution shall be paid out by the Company in cash (or by check) in a
single lump sum payment in accordance with Section 5.3.
          (b) If at the time the Participant is entitled to a distribution
pursuant to Section 5.1, the total distributable amount is at least $50,000, the
distribution shall be paid out by the Company in cash (or by check) in equal
annual installments (by reference to the number of Shares allocated to a
Participant’s Account) as follows. The number of installment payments shall be
the lesser of (i) ten (10) or (ii) two (2) times the number of Plan Years the
Participant elected to defer Compensation under the Plan.
          (c) Notwithstanding the foregoing, to the extent permitted by
Section 409A of the Code and the regulations and other guidance thereunder, the
Administrator may, in it sole discretion, override or modify the timing of
payment of a Participant’s Benefits under this Plan at any time and for any
reason to either accelerate or delay the timing of payment of such Benefits in
whole or in part. Such modifications may apply to some or all one or more
Participant Accounts, as determined in the Administrator’s discretion, even as
to future installments payable to a Participant under a distribution that has
already commenced pursuant to Section 5.2(b).
     5.3 Timing of Payments. If a Participant ceases serving as a Director on or
before June 30 of any Plan Year, the lump sum payment or the first installment
payment shall be paid by the Company no later than the last day of such Plan
Year. If the Participant ceases serving as a Director on or after July 1 of any
Plan Year, the lump sum payment or the first installment payment shall be paid
by the Company no later than January 31 of the following Plan Year. If the
payment of a Participant’s Account is made in installment payments, the second
installment payment shall be paid during January of the Plan Year following the
Plan Year in which the first installment payment was paid and all remaining
installment payments shall be paid annually in the month of January. The value
of an installment shall be determined by multiplying the number of Shares to be
paid out in such installment by the Fair Market Value of one share of the
Company’s Common Stock on the last trading day immediately preceding such
installment payment.

6

--------------------------------------------------------------------------------

 

     5.4 Death Benefits. In the event the Participant dies prior to receiving
all of his or her Benefits, his or her remaining Benefits shall be paid by the
Company in cash (or by check) to the Participant’s Beneficiary in a lump sum
payment as soon as administratively feasible after the Participant’s death, but
in no event later than ninety (90) days after the Participant’s death.
     5.5 Acceleration of Payments. Except as provided in Section 5.2(c),
payments under the Plan may be accelerated only upon the occurrence of an event
specified in this Section 5.3.
          (a) Domestic Relations Order. A payment may be accelerated if such
payment is made to an alternate payee pursuant to and following the receipt and
qualification of a domestic relations order as defined in Section 414(p) of the
Code.
          (b) Compliance with Ethics Agreements and Legal Requirements. A
payment may be accelerated as may be necessary to comply with ethics agreements
with the Federal government or as may be reasonably necessary to avoid the
violation of Federal, state, local or foreign ethics law or conflicts of
interest law, in accordance with the requirements of Section 409A.
          (c) Divestiture. payment may be accelerated as may be necessary to
comply with a certificate of divestiture as defined in Section 1043(b)(2) of the
Code.
          (d) Section 409A Additional Tax. A payment may be accelerated to the
extent required to pay any income tax imposed under Section 409A of the Code
(the “Section 409A Amount”) if at any time the Participant’s deferred
compensation arrangement fails to meet the requirements of Section 409A of the
Code. The total payment under this Section 5.5 may not exceed the Section 409A
Amount.
          (e) A payment may be accelerated in the Administrator’s discretion in
connection with any of the following events, in accordance with the requirements
of Section 409A of the Code and the regulations and other guidance thereunder:
          (1) a corporate dissolution taxed under Section 331 of the Code,
          (2) with the approval of a bankruptcy court pursuant to 11 U.S.C.
Section 503(b)(1)(A);
          (3) a change in control event for purposes of Section 409A of the
Code, as defined in Treas. Reg. § 1.409A-3(i)(5), or as these definitions may
later be modified by other regulatory pronouncements;
          (4) the termination of the Plan and all other plans that would be
aggregated with the Plan for purposes of Section 409A of the Code; and
          (5) such other events and conditions as permitted by Section 409A of
the Code and the regulations and other guidance thereunder.

7

--------------------------------------------------------------------------------

 

          (f) Offset. A payment may be accelerated in the Administrator’s’s
discretion as satisfaction of a debt of the Participant to the Company, where
such debt is incurred in the ordinary course of the service relationship between
the Participant and the Company, the entire amount of the reduction in any of
the Company’s taxable years does not exceed $5,000, and the reduction is made at
the same time and in the same amount as the debt otherwise would have been due
and collected from the Participant.
     5.6 No Discretionary Distributions. Except as expressly provided herein,
the Administrator shall not exercise discretion with respect to the timing or
form of distribution of Benefits from the Plan, but shall make distributions at
the time and in the manner elected by the Participant on the Deferred
Compensation Agreement or as otherwise specified in the Plan.
     5.7 Special Delay in Distribution Rules. Notwithstanding anything to the
contrary set forth herein, the Administrator retains the right, in its sole
discretion, to delay distributions under the Plan to the extent permitted by
Section 409A of the Code and its regulations and other guidance thereunder.
6. Source of Benefits
     Benefits payable under this Plan shall be paid out of the Company’s general
assets and allocated as payments out of the appropriate Participant’s Account
under the Plan.
7. Administration
     7.1 General. This Plan shall be administered by the Board of Directors of
the Company, unless and until the Board delegates administration to a committee
composed of not fewer than two members of the Board. All members of such
committee shall be Non-Employee Directors, unless the Board expressly declares
otherwise. The Board or, if applicable, such committee (the “Administrator”)
shall exercise all administrative powers and duties under the Plan in accordance
with the terms and purposes of the Plan. The Administrator shall determine the
amount of the Benefits due to each Participant or Beneficiary from this Plan and
shall cause them to be paid accordingly in accordance with the Plan.
     7.2 Procedures. The Administrator may adopt such rules and regulations not
inconsistent with the provisions of the Plan as deemed necessary or appropriate
for the proper administration of the Plan and shall have the authority, in the
Administrator’s sole discretion, to interpret and construe any provision of the
Plan. To the extent permitted by law, (i) all such rules, regulations,
interpretations and constructions shall be final and binding on the Company and
all Participants and their legal representatives, beneficiaries, successors, and
assigns, subject to review as provided in Section 7.3, (ii) the Administrator
shall not be subject to any individual liability with respect to the Plan and
(iii) the Administrator shall be indemnified by the Company for any action or
omission made with respect to the Plan which does not demonstrate bad faith,
willful misconduct, criminal act, or gross negligence.
     7.3 Claims. Any denial by the Administrator of a claim for benefits under
the Plan by a Participant or Beneficiary shall be stated in writing by the
Administrator and delivered or mailed to the Participant or Beneficiary. Such
notice shall set forth the specific reasons for the denial, written to the best
of the Administrator’s ability in a manner that may be understood

8

--------------------------------------------------------------------------------

 

without legal counsel. In addition, the Administrator shall afford a reasonable
opportunity to any Participant or Beneficiary whose claim for benefits has been
denied for a review of the decision denying the claim. In the event of further
disagreement following any further decision of the Administrator after such a
review, either the Participant or the Administrator may appeal to the full
Board, which decision shall be final.
8. Amendment and Termination
     8.1 Amendment or Termination. While the Company intends and expects the
Plan to continue to fulfill its purposes and serve the best interests of the
Company in its present form, the Company reserves the right to amend or
terminate the Plan at any time and for any reason, subject to the provisions in
this Section 8.1, Section 8.2, and Section 9.
          (a) The Administrator may determine that a Participant who has not had
a Termination of Service shall no longer be eligible to participate in the Plan.
If the Administrator terminates a Participant’s eligibility to participate in
the Plan prior to the Participant’s Termination of Service, then the
Participant’s Account balance, if any, shall remain in the Plan and will be paid
out in accordance with the terms of this Plan and the applicable deferral
election.
          (b) Notwithstanding any provision of the Plan to the contrary, in the
event that the Company determines that any provision of the Plan may cause
amounts deferred under the Plan to become immediately taxable to any Participant
under Section 409A of the Code, the Company may (i) adopt such amendments to the
Plan and appropriate policies and procedures, including amendments and policies
with retroactive effect, that the Company determines necessary or appropriate to
preserve the intended tax treatment of the Plan benefits provided by the Plan
and/or (ii) take such other actions as the Company determines necessary or
appropriate to comply with the requirements of Section 409A of the Code.
     8.2 Accrued Benefits.
          (a) No termination of the Plan or any amendments thereto which affect
Benefits under the Plan shall, without the written consent of a Participant,
eliminate or reduce any Benefit of the Participant under the Plan to which, as
of the date of such termination or amendment, such Participant would be entitled
under the provisions of Section 5 had he or she ceased serving as a Director
immediately prior to such date.
          (b) In the event of any amendment of the Plan which affects the amount
of Benefits payable under the Plan, Participants shall be entitled to receive
the greater of (i) the Benefit provided under the Plan as amended, or (ii) the
Benefit described above in Section 8.2(a).
          (c) For Pre-2005 Deferrals, upon termination of the Plan, all Deferred
Compensation Agreements shall terminate immediately and all Participants’ full
Compensation on a non-deferred basis will be restored. Each and every
Participant shall receive payment of the value of his or her Account in
accordance with the provisions of Section 5 as if such Participant had ceased
serving as a Director on the date of the Plan’s termination.

9

--------------------------------------------------------------------------------

 

          (d) For Post-2004 Deferrals, upon termination of the Plan, all
Deferred Compensation Agreements shall terminate immediately and all
Participants’ full Compensation on a non-deferred basis will be restored.
Additionally, with respect to Post-2004 Deferrals, the Plan may be terminated
and liquidated at any time by the Company and payment of distributions may be
accelerated, provided that, to the extent required by Section 409A (i) the
termination and liquidation does not occur proximate to a downturn in the
financial health of the Company; (ii) all other plans are terminated with
respect to all Participants, (iii) no Participant Account balances are paid,
other than those otherwise payable under the terms of the Plan absent a
termination of the Plan, within 12 months of the termination of the Plan,
(iv) all Participant Account balances are paid within 24 months of the
termination of the Plan, and (v) the Company does not adopt another Account
Balance Plan with respect to the Plan’s Participants at any time for a period of
three years following the date of termination of the Plan.
9. Adjustment of Shares; Sale or Merger of the Company
     9.1 Adjustment of Shares. If any change is made in the Common Stock of the
Company pursuant to which the value of a Share is determined, without the
receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the number of Shares
held in a Participant’s Account will be appropriately adjusted. The Board shall
make such adjustments, and its determination shall be final, binding and
conclusive. For this purpose, the conversion of any convertible securities of
the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.
     9.2 Sale or Merger of the Company. In the event of a sale, merger,
reorganization, consolidation or other similar transaction (a “Change of
Ownership Transaction”) involving the Company, no Participant in the Plan will
be considered to have ceased serving as a Director for purposes of the Plan, nor
will any such Participant be entitled to receive Benefits pursuant to Section 5,
until such Participant actually ceases serving as Director of the Company or any
acquiring or successor company or entity. Notwithstanding the foregoing, to the
extent permitted by Section 409A of the Code and the regulations and other
guidance thereunder, in connection with a Change of Ownership Transaction,
immediate payment of Benefits may be directed by the Administrator of the Plan.
In any event, no Change of Ownership Transaction involving the Company shall,
without the written consent of a Participant, eliminate or reduce any Benefit of
the Participant under the Plan to which, as of the date of such Change of
Ownership Transaction, such Participant would be entitled under the provisions
of Section 5 had he or she ceased serving as a Director immediately prior to
such date.
10. Miscellaneous
     10.1 Benefits Fully Vested. All Benefits under the Plan, to the extent
accrued, shall be fully vested at all times hereunder.

10

--------------------------------------------------------------------------------

 

     10.2 No Right to Continue as Director. Nothing contained in this Plan or in
any agreement or instrument executed pursuant to the Plan shall be construed as
conferring upon any Participant the right to continue serving as a Director.
     10.3 Successors and Assigns. This Plan shall be binding upon the Company
and its successors and assigns as well as each Participant and his or her
representatives, successors, heirs, assigns, and Beneficiary.
     10.4 Assignment or Alienation. To the extent permitted by law, benefits of
Participants under this Plan may not be anticipated, assigned (either by law or
in equity), transferred, alienated or subject to attachment, garnishment, levy,
execution or other legal or equitable process.
     10.5 Entire Agreement. The Plan and a Participant’s Deferred Compensation
Agreement, and any subsequently adopted amendment to either of these documents,
shall constitute the total agreement or contract between the Company and such
Participant regarding the Plan. No oral statement regarding the Plan may be
relied upon by the Participant. If there are any conflicts between the terms of
the Plan and a Participant’s Deferred Compensation Agreement, the terms of the
Plan shall control.
     10.6 Headings. The headings herein are for reference only. In the event of
a conflict between a heading and content of a Section of this Plan, the content
of the Section shall control.
     10.7 Gender and Number. Whenever used herein, the masculine shall be
interpreted to include the feminine and neuter, the neuter to include the
masculine and feminine, the singular to include the plural and the plural to
include the singular, unless the context requires otherwise.
     10.8 Governing Law. The place of administration of this Plan shall
conclusively be deemed to be within the State of California, and the Plan shall
be governed by and in all respects construed in accordance with the substantive
laws of the State of California, except where such laws are superseded by
federal laws.
     10.9 Compliance with Section 409A of the Code. This Plan is intended to
comply with the requirements of Section 409A of the Code and regulations and
other guidance thereunder. The Administrator shall interpret the Plan provisions
with respect to Post-2004 Deferrals in a manner consistent with the requirements
of Section 409A of the Code and regulations and other guidance thereunder. To
the extent one or more provisions of this Plan do not comply with Section 409A
of the Code, such provision shall be automatically and immediately voided, and
shall be amended as soon as administratively feasible and shall be administered
to so comply.
     10.10 Scrivener’s Error. Notwithstanding any other provision of this Plan
to the contrary, if there is a scrivener’s error in properly transcribing this
Plan document, it shall not be a violation of the Plan terms to operate the Plan
in accordance with its proper provisions, rather than in accordance with the
terms of the Plan document, pending correction of the Plan document through an
amendment. In addition, any provisions of the Plan document improperly added as
a result of scrivener’s error shall be considered null and void as of the date
such error occurred.

11

--------------------------------------------------------------------------------

 

     10.11 Plan Restatement Effective Date. This Restatement of the Plan shall
be effective with respect to all Participants, Beneficiaries and any person
claiming benefits under the Plan on or following January 1, 2005, except as
otherwise expressly indicated to the contrary.
     In Witness Whereof, the Company has executed this Restatement of the Plan
as of this 31st day of December, 2008.

            IDM Pharma, Inc.
      By:   /s/ Robert J. De Vaere         Title: Senior Vice President, Finance
and                  Administration and Chief Financial Officer     

12

--------------------------------------------------------------------------------

 

DEFERRED COMPENSATION AGREEMENT AND
2009 PLAN YEAR ELECTION FORM
UNDER THE IDM PHARMA, INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
     This Deferred Compensation Agreement is entered into by IDM Pharma, Inc., a
Delaware corporation (the “Company”), and                     (the
“Participant”) to be effective commencing with the Plan Year that begins on
January 1, 2009.
     Whereas, the Company has established the IDM Pharma, Inc. Directors’
Deferred Compensation Plan (the “Plan”) to provide benefits payable by the
Company to nonemployee directors of the Company, which benefits to Participants
under the Plan are based on compensation that the Participant has elected to
defer payment until the time that he or she is no longer providing services to
the Company.
     Whereas, pursuant to Section 3 of the Plan, the Participant is eligible to
participate in the Plan;
     Whereas, under the Plan the Participant must enter into an agreement in
order to elect to defer his or her receipt of a selected percentage of his or
her director’s retainer and meeting fees; and
     Whereas, under the Plan, the Participant must enter into such agreement
either (i) within 30 days of the Participant first becoming an Eligible
Director, or (ii) prior to the first day of the first Plan Year for which this
Agreement is to commence to be effective, whichever is applicable.
     Now, Therefore, in consideration of the terms and conditions set forth
herein, the Company and the Participant agree as follows:
     1. All of the various terms and conditions of the Plan, including any
amendments made to the Plan from time to time, shall be incorporated into and be
considered a part of this Agreement and shall be binding upon the parties.
Capitalized terms used, but not defined, in this Agreement shall have the
meaning set forth in the Plan.
     2. This Agreement shall be binding upon the parties, any successor to the
Company, any representative, successor, assign or heir of the Participant, and
any surviving spouse or Beneficiary of the Participant. In accordance with the
terms of the Plan, no interest under this Agreement may be assigned, alienated
or disposed of in any manner by the Participant or any surviving spouse,
representative, successor, assign, heir, or Beneficiary of the Participant.
     3. This Agreement is intended to be a Deferred Compensation Agreement as
defined in the Plan.
     4. Subject to the provisions of Section 5 of this Agreement, the
Participant agrees to irrevocably defer receipt of the percentage of his or her
Compensation specified below in order

 

--------------------------------------------------------------------------------

 

to have such amounts contributed by the Company to his or her Account under the
Plan as Compensation Reductions, or hereby elects to cease deferrals of his or
her Compensation, as applicable. The Participant agrees that the following
election will remain effective for all subsequent Plan Years unless and until
the Participant makes a new election for such subsequent Plan Years. The Company
agrees to reduce the Participant’s Compensation by the percentage specified
below (if any) and to contribute such amounts to the Participant’s Account
established under the terms of the Plan.
(               %) The Participant hereby elects to defer the foregoing
percentage of his or her Compensation to the Plan. (Select any whole percentage
of your Compensation between 1% and 100%.
OR
                    (initial) The Participant hereby elects to cease deferrals
of Compensation to the Plan.
     5. This Agreement shall apply only to Compensation payable with respect to
the Participant’s services as a Director on or after the Participant signs and
returns this Agreement to the Company.
     6. This Agreement may not be revoked. This Agreement may be amended by the
Company and the Participant in writing; provided, however, that no amendment may
be made which would alter the terms of the Participant’s election to defer
Compensation in force at the time of such amendment.
     7. The benefits to which the Participant is entitled under this Agreement
are based on the value of the Participant’s Account under the Plan. The amounts
deferred under this Agreement and credited to the Participant’s Account under
the Plan shall be converted to Shares and valued in accordance with the terms of
the Plan.
     8. The Participant understands and hereby acknowledges that amounts
contributed to the Plan hereunder will not be available until he or she ceases
providing services to the Company. The Company shall pay to the Participant,
after the Participant ceases providing services to the Company, the value of his
or her Account under the Plan in a single lump sum if the total distributable
amount is less than $50,000. If the total distributable amount is $50,000 or
more, it will be distributed in annual installments, with the number of
installments to be the lesser of (i) 10, or (ii) two times the number of years
that the Participant elected to defer his or her Compensation under the Plan.
     9. The Participant shall have the right to designate, on the form provided
by the Company, a Beneficiary to receive any Benefits due under the Plan which
may remain unpaid at the Participant’s death and shall have the right at any
time to revoke such designation and to substitute another such Beneficiary. In
the event of the Participant’s death prior to receiving the value of his or her
Account, the entire value of the Participant’s Account shall be paid to the
Participant’s Beneficiary (or if the Participant has not designated a
Beneficiary, to the Participant’s surviving spouse, or if none, the
Participant’s estate) in a single lump sum payment.

 

--------------------------------------------------------------------------------

 

     10. The distribution to the Participant of some or all of the value of the
Participant’s Account under the Plan shall discharge the Company of all
obligations to the Participant under this Agreement to the extent of the amount
of such distribution.
     11. The Participant understands that all payments under this Agreement
shall be subject to all applicable withholding for foreign, state, federal and
local income or employment taxes.
     12. The Participant understands that except as otherwise provided by the
Plan, the entire value of the Participant’s Account under the Plan shall be
subject to the claims of creditors of the Company and neither the Participant
nor any Beneficiary shall have any legal or equitable interest in any of the
Plan’s assets, or any other asset of the Company. The Participant is a general
unsecured creditor of the Company with respect to the promises of the Company
made herein, except as otherwise expressly provided by the Plan.
     13. Nothing contained in this Agreement or the Plan shall be construed as
conferring upon the Participant the right to continue serving as a Director of
the Company.
     14. This Agreement constitutes the entire understanding and agreement
between the Company and the Participant with respect to the subject matter
contained herein, and there are no agreements, understandings, restrictions,
representations or warranties among the Participant and the Company other than
those as set forth or provided for in this Agreement and the Plan. The terms of
this Agreement and the Plan shall control and take precedence over the terms of
any other materials which describe the Plan and this Agreement and which might
be argued to be inconsistent with the terms of the Plan or this Agreement. In
the event of a conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.
     15. This Agreement shall be governed by the substantive laws of the State
of California.
     In Witness Whereof, the Company has caused this Agreement to be executed by
a duly authorized representative and Participant has executed this Agreement
effective as of the date written above.

             
 
      IDM Pharma, Inc.:    
 
           
 
Date
     
 
By: Robert J. De Vaere    
 
           
 
      Vice President & CFO    
 
           
 
      Title    
 
           
 
      Participant:    
 
           
 
           
Date