exv10w3







Exhibit 10.3




June 30, 2008




Bonnie J. Mills, Ph.D.

32071 Via Buho

Coto de Caza, California 92679




	 	 	 
	Re:

	 	Separation Agreement






Dear Bonnie:




     This letter sets forth the substance of our agreement (the “Agreement”) regarding your
separation from IDM Pharma, Inc. (the “Company”). This Agreement shall be effective on the
“Effective Date” specified in Section 13 below.



     1. Separation. You have resigned effective June 3, 2008 (the “Separation Date”) . The
Company and you dispute whether your resignation was for good reason pursuant to the employment
agreement between you and the Company made and entered into as of June 6, 2005, and said dispute is
fully and finally compromised and released by this Agreement without admission or concession by
either party hereto.



     2. Consultancy. You agree to provide consulting services to the Company, upon the request of
the Company, under the terms specified below.



          a. Consulting Period. The consulting period shall commence on July 1, 2008 and continue until
September 30, 2008.




          b. Consulting Services. You agree to make yourself available to provide consulting services
in any area of your expertise, up to a maximum of twenty (20) hours per month (the “Consulting
Services”). You will perform Consulting Services only if specifically requested in writing to do
so by the Chief Medical Officer (CMO) of the Company. You agree to exercise the highest degree of
professionalism and utilize your expertise and creative talents to the fullest in performing any
Consulting Services that may be requested. The Company shall have no obligation to request that
you perform any Consulting Services.




          c. Consulting Fees. You will be paid for any Consulting Services rendered pursuant to
Section 2b above at the rate of $200 per hour.




          d. Protection of Confidential and Proprietary Information. You agree that, during the
Consulting Period and thereafter, you will not use or disclose any confidential or



 









 






proprietary information or materials of the Company which you obtain or develop in the course of
performing any Consulting Services, except with the written permission of the President and CEO
(CEO). Any and all work product you create in connection with any Consulting Services will be the
sole and exclusive property of the Company. You hereby assign to the Company all right, title, and
interest in all inventions, techniques, processes, materials, and other intellectual property
developed in the course of performing any Consulting Services.




          e. Authority and Facilities Usage During Consulting Period. After the Separation Date, you
have no authority, in the absence of the express written consent of the CEO, to bind the Company
(or to represent that you have authority to bind the Company) to any contractual obligations,
whether written, oral or implied. You hereby agree that after the Separation Date, you will not
represent or purport to represent the Company in any manner whatsoever to any third party unless
authorized to do so in writing by the CEO. Access to and use of Company facilities or equipment to
perform any Consulting Services will be coordinated through the CMO. You will be permitted to
maintain the laptop computer issued to you by the Company during the Consulting Period. At the
conclusion of the Consulting Period you will return all property belonging to the Company,
including the laptop computer and any documentation in your possession belonging to the Company, to
the Company.




     3. Severance. In exchange for your promises and releases herein, the Company agrees to pay
you the equivalent of nine (9) months of your base salary in effect as of the Separation Date, less
required deductions. This payment shall be made in three equal installments, as follows: i)
installment one shall be made within three (3) business days of the Effective Date of this
Agreement; ii) installment two shall be made on or before the three-month anniversary of the
Effective Date of this Agreement; and iii) installment three shall be made on or before the
six-month anniversary of the Effective Date of this Agreement.



     4. Accrued Salary and Vacation. You acknowledge that on the Separation Date, the Company paid
you accrued salary, and all accrued and unused vacation, earned through the Separation Date,
subject to standard payroll deductions and withholdings.



     5. Health Insurance. In exchange for your promises and releases in this Agreement, the
Company shall, in the event that you timely elect and are eligible for continued health care
insurance coverage pursuant to the federal COBRA law or, if applicable, state insurance laws, pay
the premiums for such continuation coverage until the earlier of: i) twelve (12) months following
the Separation Date; or ii) the date upon which you become employed by another organization
offering group health insurance coverage.



     6. Stock Options. Your Company stock options (“Options”) ceased vesting as of the Separation
Date. All terms, conditions, and limitations applicable to your Options will remain in full force
and effect pursuant to the applicable stock option agreements between you and the Company, the
applicable stock option plan documents, and any other documents applicable to the Options. You are
advised by the Company to seek independent legal advice with respect to tax and securities law
issues regarding your Options and any sale of Company stock you may make.



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     7. Other Compensation or Benefits. You acknowledge that, except as expressly provided in this
Agreement, you will not receive any additional compensation, severance or benefits after the
Separation Date.



     8. Expense Reimbursement. You agree that you have submitted your final documented expense
employee reimbursement statement reflecting all business expenses you incurred through the
Separation Date, if any, for which you seek reimbursement. The Company will reimburse you for
these expenses pursuant to its regular business practice.



     9. Return of Company Property. You hereby represent that you have returned to the Company all
Company documents (and all copies thereof) and other Company property in your possession or
control, including, but not limited to, Company files, correspondence, memoranda, notes, notebooks,
drawings, books and records, plans, forecasts, reports, proposals, studies, agreements, financial
information, personnel information, sales and marketing information, research and development
information, systems information, specifications, computer-recorded information, tangible property
and equipment, credit cards, entry cards, identification badges and keys; and any materials of any
kind that contain or embody any proprietary or confidential information of the Company (and all
reproductions thereof in whole or in part) (“Company Property”). You also represent that you have
performed a good faith search to ensure that you are no longer in possession or control of any
Company Property.



     10. Proprietary Information Obligations. You hereby acknowledge that you have had access to
confidential and proprietary information and trade secrets of the Company in connection with your
relationship therewith. You hereby acknowledge that such information includes, but is not limited
to: (a) inventions, developments, designs, applications, improvements, trade secrets, formulae,
know-how, methods or processes, discoveries, techniques, plans, strategies and data (hereinafter
“Inventions”); and (b) plans for research, development, new products, marketing and selling,
information regarding business plans, budgets and unpublished financial statements, licenses,
prices and costs, information concerning potential and existing suppliers and customers and
information regarding the skills and compensation of employees of the Company (collectively, with
Inventions, hereinafter referred to as “Proprietary Information”). In view of the foregoing, you
hereby agree, warrant and acknowledge that:



          a. You will deliver to the Company no later than July 7, 2008 all documents, notes,
laboratory notebooks, drawings, specifications, calculations, sequences, data and other materials
of any nature pertaining to your work with the Company, and any documents or data of any
description (or any reproduction of any documents or data) containing or pertaining to any of the
foregoing Proprietary Information.




          b. You have held and will continue to hold in confidence and trust all Proprietary
Information and shall not use or disclose any Proprietary Information or anything related to such
information without the prior written consent of the Company.




          c. You have assigned and hereby assign to the Company your entire right, title and interest
in and to any and all Inventions (and all proprietary rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made, conceived of,



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reduced to practice, or learned, by you, either alone or jointly with others, during the course of
your relationship with the Company.




          d. You will assist the Company in every proper way to obtain, and from time to time enforce,
United States and foreign proprietary rights relating to Inventions in any and all countries. To
that end you will execute, verify and deliver such documents and perform such other acts (including
appearances as a witness) as the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such proprietary rights and the assignment
thereof. In addition, you will execute, verify and deliver assignments of such proprietary rights
to the Company or its designee. Your obligation to assist the Company with respect to proprietary
rights relating to such Inventions in any and all countries shall continue beyond the termination
of your employment, but the Company shall compensate you at a reasonable rate after your
termination for the time actually spent by you at the Company’s request on such assistance.




          e. In the event the Company is unable for any reason, after reasonable effort, to secure your
signature on any document needed in connection with the actions specified in the preceding
paragraph, you hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as your agents and attorneys in fact, which appointment is coupled with an
interest, to act for and in your behalf to execute, verify and file any such documents and to do
all other lawfully permitted acts to further the purposes of the preceding paragraph with the same
legal force and effect as if executed by you. You hereby waive and quitclaim to the Company any
and all claims, of any nature whatsoever, which you now or may hereafter have for infringement of
any proprietary rights assigned hereunder to the Company.




          f. Your breach of the foregoing agreements and acknowledgments will result in unique and
special harm to the Company and therefore the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other equitable relief
without prejudice to any other rights and remedies that the Company may have for a breach of this
Agreement.




          g. You acknowledge your continuing obligation to comply with the proprietary information and
inventions agreement (“PIIA”) between you and the Company (attached as Exhibit 1), both before and
after the Separation Date. Additionally, you represent that you have not violated and will not
violate the PIIA prior to the Effective Date.




     11. Nondisparagement. You agree not to disparage the Company, its officers, directors,
employees, shareholders and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation; provided that you may respond accurately and fully to
any question, inquiry or request for information when required by law.



     12. Release. In exchange for the consideration provided to you by this Agreement that you are
not otherwise entitled to receive, you hereby generally and completely release the Company and its
directors, officers, employees, shareholders, members, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all
claims, liabilities and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to your signing this Agreement.
This general release includes, but is not limited to: (1) all claims arising out of or in any way
related to your employment with the Company or the termination of that employment;



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(2) all claims arising from or related to the employment agreement between you and the Company
made and entered into as of June 6, 2005; (3) all claims related to your compensation or benefits
from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other
ownership interests in the Company; (4) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (5) all tort claims, including,
but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (6) all federal, state, and local statutory claims, including, but not limited
to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising
under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities
Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and
the California Fair Employment and Housing Act (as amended).




     13. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and releasing
any rights you may have under ADEA, and that the consideration given for the waiver and release in
the preceding paragraph is in addition to anything of value to which you were already entitled.
You further acknowledge that you have been advised by this writing that: (a) your waiver and
release do not apply to any rights or claims that may arise after the execution date of this
Agreement; (b) you should consult with an attorney prior to executing this Agreement (and you
acknowledge that you have done so); (c) you have twenty-one (21) days to consider this Agreement
(although you may choose to voluntarily execute this Agreement earlier); (d) you have seven (7)
days following the execution of this Agreement by the parties to revoke the Agreement; and (e) this
Agreement will not be effective until the date upon which the revocation period has expired without
being exercised (the “Effective Date”) and you will not receive benefits under this Agreement
unless and until it becomes effective.



     14. Section 1542 Waiver. In granting the release herein, you hereby acknowledge that you have
read and understand Section 1542 of the California Civil Code: “A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially affected his or her
settlement with the debtor.” You hereby expressly waive and relinquish all rights and benefits
under that section and any law of any jurisdiction of similar effect with respect to your release
of claims hereby.



     15. Arbitration. To ensure rapid and economical resolution of any disputes which may arise
under this Agreement, you and the Company agree that any and all disputes or controversies of any
nature whatsoever (with the sole exception of disputes involving relating to Sections 9 and 10 of
this Agreement), arising from or regarding the interpretation, performance, enforcement or breach
of this Agreement shall be resolved by confidential, final and binding arbitration (rather than
trial by jury or court or resolution in some other forum) conducted by Judicial Arbitration and
Mediation Services, Inc. (“JAMS”) in San Diego, California, under the then-existing JAMS rules.
The prevailing party in such arbitration proceedings shall be entitled to recover from the other
party reasonable attorneys’ fees and other recoverable costs incurred in connection with such
arbitration proceeding unless prohibited by law. Nothing in this Agreement shall prevent either
party from seeking to obtain injunctive relief in court to preserve the status quo or prevent
irreparable harm pending the conclusion of any such arbitration. Notwithstanding the foregoing,
you and the Company each have the right to resolve any issue or



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dispute involving confidential, proprietary or trade secret information, or intellectual property
rights, by Court action instead of arbitration.




     16. Miscellaneous. This Agreement, including Exhibit 1, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with regard to this
subject matter. It is entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other such promises,
warranties or representations. This Agreement may not be modified or amended except in a writing
signed by both you and a duly authorized officer of the Company. This Agreement will bind the
heirs, personal representatives, successors and assigns of both you and the Company, and inure to
the benefit of both you and the Company, their heirs, successors and assigns. The failure to
enforce any breach of this Agreement shall not be deemed to be a waiver of any other or subsequent
breach. For purposes of construing this Agreement, any ambiguities shall not be construed against
either party as the drafter. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any other provision of this
Agreement and the provision in question will be modified so as to be rendered enforceable in a
manner consistent with the intent of the parties insofar as possible. This Agreement will be
deemed to have been entered into and will be construed and enforced in accordance with the laws of
the State of California as applied to contracts made and to be performed entirely within
California. This Agreement may be executed in counterparts or with facsimile signatures, which
shall be deemed equivalent to originals.



***continued on next page




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If this Agreement is acceptable to you, please sign below and return one original to me.



I wish you all the best in your future endeavors.



Sincerely,



IDM Pharma, Inc.




	 	 	 	 	 
	By:

	 	/s/ Timothy P. Walbert
	 	 
	 

	 	 	 	 
	 

	 	Timothy P. Walbert,	 	 
	 

	 	President and Chief Executive Officer	 	 






	 	 	 	 	 
	Agreed and Accepted:

	 	 	 	 
	 
	 	 	 	 
	/s/ Bonnie J. Mills

	 	     June 9, 2008	 	 
	 

	 	 	 	 
	Bonnie J. Mills

	 	          Date	 	 






	 	 	 	 	 
	cc:

	 	Robert De Vaere
	 	 
	 

	 	Jeff Sherman	 	 
	 

	 	Jackie Fritz	 	 







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