exv10w53






Exhibit 10.53




IDM PHARMA, INC.

AMENDED AND RESTATED EMPLOYMENT AGREEMENT




     This AMENDED & RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of December
11, 2008 (the “Effective Date”), by and between 
IDM Pharma Inc., a Delaware corporation
(the “Company”), and Timothy C. Melkus (the “Executive”). This Agreement shall replace and
supersede that certain Employment Agreement between Executive and the Company entered into
effective as of December 3, 2007 (the “Prior Agreement”). The Company and the Executive are
hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party.”




Recitals




     A. The Company and Executive previously entered into the Prior Agreement and desire to amend
and restate the Prior Agreement in its entirety as set forth herein, effective as of the Effective
Date, in order to clarify the application of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations and other guidance thereunder and any state law of
similar effect (collectively “Section 409A”), to the benefits provided to Executive under the Prior
Agreement.



     B. The Company desires to retain the Executive’s experience, skills, abilities, background and
knowledge and is willing to engage the Executive’s services on the terms and conditions set forth
in this Agreement.



     C. The Executive desires to be in the employ of the Company and is willing to accept such
employment on the terms and conditions set forth in this Agreement.



Agreement




     In consideration of the foregoing Recitals and the mutual promises and covenants herein
contained, and for other good and valuable consideration, the Parties, intending to be legally
bound, agree as follows:



     1. Employment.



          1.1 Term. The Company hereby employs the Executive, and the Executive hereby accepts
employment by the Company, upon the terms and conditions set forth in this Agreement. Executive’s
employment under this Agreement shall continue until it is terminated pursuant to Section 4 herein
(the “Term”).




          1.2 Title. The Executive shall have the title of Senior Vice President, Business Development
and Operations of the Company and shall serve in such other capacity or capacities as the President
and Chief Executive Officer of the Company may from time to time prescribe.




1.









 





          1.3 Duties. The Executive shall do and perform all services, acts or things necessary or
advisable to manage and conduct the business of the Company and which are normally associated with
the position of Senior Vice President, Business Development and Operations. The Executive shall
report to the President and Chief Executive Officer.




          1.4 Policies and Practices. The employment relationship between the Parties shall be governed
by the policies and practices established by the Company and the Board. The Executive will
acknowledge in writing that he has read the Company’s Employee Handbook that will govern the terms
and conditions of his employment with the Company, along with this Agreement. In the event that
the terms of this Agreement differ from or are in conflict with the Company’s policies or practices
or the Company’s Employee Handbook, this Agreement shall control.




     2. Loyal and Conscientious Performance; Noncompetition.



          2.1 Loyalty. During the Executive’s employment by the Company, the Executive shall devote
Executive’s full business energies, interest, abilities and productive time to the proper and
efficient performance of Executive’s duties under this Agreement.




          2.2 Covenant not to Compete. During the term of this Agreement, and during any period in
which the Executive receives severance benefits from the Company, the Executive shall not engage in
competition with the Company and/or any of its controlled Affiliates (as defined below), either
directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate,
promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member
of any association or otherwise, in any phase of the business of developing, manufacturing and
marketing of products or services that are in the same field of use or which otherwise compete with
the products or services of the Company, except with the prior written consent of the Company’s
Board. For purposes of this Agreement, “Affiliate,” means, with respect to any specific entity,
any other entity that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such specified entity. Ownership by the Executive,
in professionally managed funds over which the Executive does not have control or discretion in
investment decisions, or as a passive investment, of less than two percent (2%) of the outstanding
shares of capital stock of any corporation with one or more classes of its capital stock listed on
a national securities exchange or publicly traded on the Nasdaq Stock Market or in the
over-the-counter market shall not constitute a breach of this Section 2.2.




          2.3 Agreement not to Participate in Company’s Competitors. During the Term, the Executive
agrees not to acquire, assume or participate in, directly or indirectly, any position, investment
or interest known by Executive to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise or in any company, person or entity that is, directly or
indirectly, in competition with the business of the Company or any of its Affiliates. Ownership by
the Executive, in professionally managed funds over which the Executive does not have control or
discretion in investment decisions, or as a passive investment, of less than two percent (2%) of
the outstanding shares of capital stock of any corporation with one or more classes of its capital
stock listed on a national securities exchange or publicly traded




2.









 





on the Nasdaq Stock Market or in the over-the-counter market shall not constitute a breach of
this Section 2.3.




     3. Compensation of the Executive.



          3.1 Base Salary. The Company shall pay the Executive a base salary at the annualized rate of
two hundred twenty thousand dollars ($235,000) per year (“Base Salary”), less payroll deductions
and all required withholdings, payable in regular periodic payments in accordance with the
Company’s normal payroll practices.




          3.2 Discretionary Bonus. Provided the Executive meets the conditions stated in this Section
3.2, the Executive shall be eligible for an annual discretionary bonus (“Bonus”) target of thirty
percent (30%) of his annual salary, based on the Board’s determination, in its sole discretion, of
whether the Executive has met such performance milestones as are established for the Executive by
the Board in consultation with the Executive (“Performance Milestones”). The Performance
Milestones will be based on certain factors including, but not limited to, the Executive’s
performance and the Company’s financial performance. The Board will have the sole discretion to
award any Bonus and to determine the amount of any such Bonus. The Executive must be employed on
the date the Bonus is awarded to be eligible for the Bonus. No pro-rata Bonus will be available.
Any Bonus will be paid no later than March 15 of the calendar year following the year in which the
Bonus is awarded.




          3.3 Changes to Compensation. The Executive’s compensation may be changed from time to time by
mutual agreement of the Executive and the Company.




          3.4 Employment Taxes. All of the Executive’s compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be collected or
withheld by the Company.




          3.5 Benefits. The Executive shall, in accordance with Company policy and the terms of the
applicable plan documents, continue to be eligible to participate in benefits under any executive
benefit plan or arrangement which may be in effect from time to time and made available to the
Company’s executive or key management employees, provided however, that the Executive shall be
entitled to at least four (4) weeks of paid vacation annually.




     4. Termination.



          4.1 Termination By the Company. The Executive’s employment with the Company may be terminated
under the following conditions:




               4.1.1 Termination for Death or Disability. The Executive’s employment with the Company shall
terminate effective upon the date of the Executive’s death or “Complete Disability” (as defined in
Section 4.4.1), provided, however, that this Section 4.1.1 shall in no way limit the Company’s
obligations to provide such reasonable accommodations to Executive as may be required by law.



3.









 





               4.1.2 Termination by the Company For Cause. The Company may terminate the Executive’s
employment under this Agreement for “Cause” (as defined in Section 4.5.3) by delivery of written
notice to the Executive specifying the Cause or Causes relied upon for such termination, provided
that such notice is delivered within two (2) months following the occurrence of any event or events
constituting “Cause”. Any notice of termination given pursuant to this Section 4.1.2 shall effect
termination as of the date of the notice or such date as specified in the notice.



               4.1.3 Termination by the Company Without Cause. The Company may terminate the Executive’s
employment under this Agreement at any time and for any reason, or no reason. Such termination
shall be effective on the date the Executive is so informed or as otherwise specified by the
Company.



          4.2 Termination By The Executive. The Executive may terminate his employment with the Company
at any time and for any reason or no reason, including, but not limited, under the following
conditions:




               4.2.1 Good Reason. The Executive may terminate his employment under this Agreement for “Good
Reason” (as defined below in Section 4.5.2) by delivery of written notice to the Company specifying
the “Good Reason” relied upon by the Executive for such termination, provided that such notice is
delivered within sixty (60) days following the occurrence of any event or events constituting Good
Reason.



               4.2.2 Without Good Reason. The Executive may terminate the Executive’s employment hereunder
for other than Good Reason upon thirty (30) days written notice to the Company.



          4.3 Termination by Mutual Agreement of the Parties. The Executive’s employment pursuant to
this Agreement may be terminated at any time upon a mutual agreement in writing of the Parties.
Any such termination of employment shall have the consequences specified in such agreement.




          4.4 Compensation Upon Termination.




               4.4.1 Death or Complete Disability. If the Executive’s employment shall be terminated by
death or Complete Disability as provided in Section 4.1.1, the Company shall pay to the Executive,
and/or Executive’s heirs, the Executive’s Base Salary and accrued and unused vacation benefits
earned through the date of termination at the rate in effect at the time of termination, less
standard deductions and withholdings, and the Company shall thereafter have no further obligations
to the Executive and/or Executive’s heirs under this Agreement, except to the extent that the
Executive and/or Executive’s heirs is/are eligible for benefits pursuant to any insurance policies
maintained by the Company in connection with his death or Complete Disability, and except as
otherwise provided by law.



               4.4.2 With Cause or Without Good Reason. If the Executive’s employment shall be terminated by
the Company for Cause, or if the Executive terminates
employment hereunder without Good Reason, the Company shall pay the Executive’s Base



4.









 







Salary
and accrued and unused vacation benefits earned through the date of termination at the rate in
effect at the time of termination, less standard deductions and withholdings, and the Company shall
thereafter have no further obligations to the Executive under this Agreement, except as provided by
law.



               4.4.3 Without Cause or For Good Reason. If the Company terminates the Executive’s employment
without Cause or the Executive terminates his employment for Good Reason, the Company shall pay the
Executive’s Base Salary and accrued and unused vacation earned through the date of termination, at
the rate in effect at the time of termination subject to standard deductions and withholdings. In
addition, subject to the limitations stated in Section 4.4.5 herein and upon the Executive’s
furnishing an effective Release within the applicable time period set forth therein, but in no
event later than forty-five (45) days following termination of employment and permitting the
Release Effective Date to occur as provided by Section 4.7 of this Agreement, the Executive shall
be entitled to:



               (i) the equivalent of the Executive’s annual Base Salary in effect at the time of termination
for a period of six (6) months (the “Severance Period”), less standard deductions and withholdings,
to be paid over a period of six (6) months after the date of termination pursuant to the Company’s
standard payroll practices; and



               (ii) in the event the Executive elects continued coverage under COBRA, the Company will pay
the same portion of Executive’s COBRA health insurance premium as the percentage of health
insurance premiums that it paid during the Executive’s employment up until the earlier of either
(i) the last day of the Severance Period or, (ii) the date on which the Executive begins full-time
employment with another company or business entity which provides comparable health insurance
coverage to the Executive; provided, however, that



               (iii) if such termination shall occur on or after the first anniversary of the effective date
of the Prior Agreement, the Severance Period shall be increased to twelve (12) months for purposes
of calculating the benefits owed to the Executive pursuant to 4.4.3 (i) and (ii).



               4.4.4 Equity Award Acceleration.



               (i) Not in connection with a Change in Control. In the event that the Executive’s employment
is terminated without Cause or for Good Reason before the first anniversary of the effective date
of the Prior Agreement, and such termination is not effected within the ninety (90) days
immediately preceding or the twelve (12) months immediately following a Change in Control (as
defined in Section 4.5.3), the vesting of the Stock Award shall be accelerated such that the Stock
Award shares shall be fully vested and immediately exercisable.



               (ii) In connection with a Change in Control. In the event that the Executive’s employment is
terminated without Cause or for Good Reason within the ninety (90) days immediately preceding or
the twelve (12) months immediately following a Change in Control of the Company which Change in
Control is consummated after the first anniversary of the
effective date of the Prior Agreement, the vesting of the Stock Award shall be fully



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accelerated
such that on the effective date of such termination one hundred percent (100%) of the Stock Award
shares shall be fully vested and immediately exercisable. Further, in the event that the
Executive’s employment is terminated without Cause or for Good Reason within the ninety (90) days
immediately preceding or the twelve (12) months immediately following a Change in Control of the
Company which Change in Control is consummated on or before the first anniversary of the effective
date of the Prior Agreement, the vesting of the Stock Award shall be accelerated such that on the
effective date of such termination the Stock Award shares that are unvested as of the effective
date of such termination shall be fully vested and immediately exercisable.



               (iii) Release and waiver. Any acceleration pursuant to this Section 4.4.4 shall be
conditioned upon and subject to the Executive’s delivery to the Company of a fully effective
Release in accordance with the terms specified in Section 4.7 hereof and such acceleration shall be
in addition to the benefits provided by Section 4.4.3 hereof.



               4.4.5 Conditions. Notwithstanding any provisions in this Agreement to the contrary, the
Company’s obligations and the Executive’s rights pursuant to Section 4.4.3 shall cease and be
rendered a nullity immediately should the Executive violate any provision of Section 2.2 herein, or
should the Executive violate the terms and conditions of the Executive’s Proprietary Information
and Inventions Agreement.



          4.5 Definitions. For purposes of this Agreement, the following terms shall have the following
meanings:




               4.5.1 Complete Disability. “Complete Disability” shall mean the inability of the Executive to
perform the Executive’s duties under this Agreement, whether with or without reasonable
accommodation, because the Executive has become permanently disabled within the meaning of any
policy of disability income insurance covering employees of the Company then in force. In the
event the Company has no policy of disability income insurance covering employees of the Company in
force when the Executive becomes disabled, the term “Complete Disability” shall mean the inability
to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months. Determination of Disability shall be a final and
binding determination made by the Board, based upon medical advice or an opinion provided by a
licensed physician acceptable to the Board in a manner consistent with its definition as provided
in Treasury Regulations Section 1.409A-3(i)(4)(i). The date such determination is made shall be
the date of such Complete Disability for purposes of this Agreement.



               4.5.2 Good Reason. “Good Reason” for the Executive to terminate the Executive’s employment
hereunder shall mean the occurrence of any of the following events without the Executive’s consent:



               (i) a material reduction in the Executive’s duties, authority, or responsibilities relative to
the duties, authority, or responsibilities in effect immediately prior to such reduction;



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               (ii) the relocation of the Company’s executive offices or principal business location to a
point more than thirty (30) miles from Irvine, California;



               (iii) the relocation of the Executive’s principal place of business to a point more than
thirty (30) miles from the Irvine, California; or



               (iv) a material reduction by the Company of the Executive’s base salary as initially set forth
herein or as the same may be increased from time to time, provided that if such reduction occurs in
connection with a Company-wide decrease in Executive salaries and the percent decrease in the
Executive’s base salary does not exceed the percent decrease in base salary of any other executive
of the Company such reduction will not constitute Good Reason to terminate Executive’s employment
for purposes of this Agreement.


Provided however that, such termination by the Executive shall only be deemed for Good Reason
pursuant to the foregoing definition if (i) the Company is given written notice from the Executive
within thirty (30) days following the first occurrence of the condition that you consider to
constitute Good Reason describing the condition and the Company fails to remedy such condition
within thirty (30) days following such written notice, and (ii) the Executive terminates employment
within thirty (30) days following the end of the period within which the Company was entitled to
remedy the condition constituting Good Reason but failed to do so.




               4.5.3 Cause. “Cause” for the Company to terminate Executive’s employment hereunder shall mean
the occurrence of any of the following events, as determined reasonably and in good faith by the
Board or a committee designated by the Board:



               (i) the Executive’s willful and habitual failure to attend to his duties as assigned by the
Board of Directors or officers of the Company to whom he reports;



               (ii) misconduct by the Executive which materially and adversely reflects upon his ability to
perform his duties for the Company;



               (iii) the Executive’s conviction of a felony involving moral turpitude that is likely to
inflict or has inflicted material injury on the business of the Company;



               (iv) the Executive’s engaging or in any manner participating in any activity which violates
any provisions of Section 2 hereof or the Executive’s Proprietary Information and Inventions
Agreement with the Company; or



               (v) the Executive’s commission of any fraud against the Company, its controlled Affiliates,
employees, agents or customers or use or intentional appropriation for his personal use or benefit
of any funds or properties of the Company not authorized by the Board to be so used or
appropriated.



               4.5.4 Change in Control. For purposes of this Agreement, “Change in Control” means: (i) a
sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in
which the Company is not the surviving entity and in which the holders of the Company’s outstanding
voting stock immediately prior to such transaction own, immediately



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after such transaction, securities representing less than fifty percent (50%) of the voting power of
the entity surviving such transaction or, where the surviving entity is a wholly-owned subsidiary
of another entity, the surviving entity’s parent; (iii) a reverse merger in which the Company is
the surviving entity but the shares of Common Stock outstanding immediately preceding the merger
are converted by virtue of the merger into other property, whether in the form of securities of the
surviving entity’s parent, cash or otherwise, and in which the holders of the Company’s outstanding
voting stock immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the Company or, where
the Company is a wholly-owned subsidiary of another entity, the Company’s parent; or (iv) an
acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity
controlled by the Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of securities of the Company
representing at least seventy five percent (75%) of the combined voting power entitled to vote in
the election of Directors; provided, however, that nothing in this paragraph shall apply to a sale
of assets, merger or other transaction effected exclusively for the purpose of changing the
domicile of the Company.



          4.6 Survival of Certain Sections. Sections 2.2, 4.4.5, 5, and 16 of this Agreement will
survive the termination of this Agreement.




          4.7 Release. In order to be eligible to receive benefits under the Plan, the Executive must
execute and return to the Company a general waiver and release in substantially the form attached
hereto as Exhibit A (the “Release”) within the time frame set forth therein but in no event later
than 45 days following the termination of the Executive’s employment, and permit such Release to
become fully effective in accordance with its terms, (the date the Executive’s Release becomes
fully effective, the “Release Effective Date”), provided, however, no such Release shall require
the Executive to forego any unpaid salary or any accrued but unpaid vacation pay. The Company has
the authority, in its discretion, to modify the form of the release as necessary to comply with
changes in applicable law and shall determine the form of the required release, which may be
incorporated into a termination agreement or other agreement with the Executive.




          4.8 Parachute Payment. If any payment or benefit the Executive would receive pursuant to this
Agreement (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G
of the Internal Revenue Code (the “Code”), and (ii) but for this sentence, be subject to the excise
tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to
the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment
that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest
portion of the Payment, which such amount, after taking into account all applicable federal, state
and local employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute
payments” is necessary so that the



8.









 






Payment equals
the Reduced Amount, reduction shall occur in the following order: reduction of cash payments;
cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event
that acceleration of vesting of stock award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of the Executive’s stock
awards.




     The accounting firm then engaged by the Company for general audit purposes shall perform the
foregoing calculations. The Company shall bear all expenses with respect to the determinations by
such accounting firm required to be made hereunder.



     The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Executive and the Company
within fifteen (15) calendar days after the date on which the Executive’s right to a Payment is
triggered (if requested at that time by the Executive or the Company) or such other time as
requested by the Executive or the Company. If the accounting firm determines that no Excise Tax is
payable with respect to a Payment, either before or after the application of the Reduced Amount, it
shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive
that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of
the accounting firm made hereunder shall be final, binding and conclusive upon the Executive and
the Company.



          4.9 Application of Internal Revenue Code Section 409A. Notwithstanding anything to the
contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance
Benefits”) that constitute “deferred compensation” within the meaning of Section 409A shall not
commence in connection with Executive’s termination of employment unless and until Executive has
also incurred a “separation from service” (as such term is defined in Treasury Regulation Section
1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts
may be provided to Executive without causing Executive to incur the additional 20% tax under
Section 409A.




          It is intended that each installment of the Severance Benefits payments provided for in this
Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).
For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in
this Agreement satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto)
determines that the Severance Benefits constitute “deferred compensation” under Section 409A and
Executive is, on the termination of Executive’s service, a “specified employee” of the Company or
any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code,
then, solely to the extent necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed
until the earlier to occur of: (i) the date that is six months and one day after Executive’s
Separation From Service or (ii) the date of Executive’s death (such applicable date, the “Specified
Employee Initial Payment Date”), and the Company (or the successor entity thereto, as applicable)
shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments
that Executive would otherwise have received through the Specified




9.









 





Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had
not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance
Benefits in accordance with the applicable payment schedules set forth in this Agreement.




          Except to the extent that payments may be delayed until the Specified Employee Initial Payment
Date pursuant to the preceding paragraph, on the first regular payroll pay day following the
effective date of the Release, the Company will pay Executive the Severance Benefits Executive
would otherwise have received under the Agreement on or prior to such date but for the delay in
payment related to the effectiveness of the Release, with the balance of the Severance Benefits
being paid as originally scheduled. All amounts payable under the Agreement will be subject to
standard payroll taxes and deductions.




     5. Confidential And Proprietary Information.



          As a condition of employment the Executive agrees to execute and abide by the Company’s
standard form of proprietary information and inventions agreement.



     6. Assignment and Binding Effect.



          This Agreement shall be binding upon and inure to the benefit of the Executive and the
Executive’s heirs, executors, personal representatives, assigns, administrators and legal
representatives. Because of the unique and personal nature of the Executive’s duties under this
Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be
assignable by the Executive. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives. Any such successor of the Company
will be deemed substituted for the Company under the terms of this Agreement for all purposes. For
this purpose, “successor” means any person, firm, corporation or other business entity which at any
tie, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially
all of the assets or business of the Company.




     7. Notices.



          All notices or demands of any kind required or permitted to be given by the Company or the
Executive under this Agreement shall be given in writing and shall be personally delivered (and
receipted for) or faxed during normal business hours or mailed by certified mail, return receipt
requested, postage prepaid, addressed as follows:




If to the Company:



IDM Pharma Inc.

9 Parker

Suite 100

Irvine, California 92618

Attention: President & Chief Executive Officer




10.









 





If to the Executive:




Timothy C. Melkus

c/o IDM Pharma Inc.

9 Parker

Suite 100

Irvine, California 92618





     Any such written notice shall be deemed given on the earlier of the date on which such
notice is personally delivered or three (3) days after its deposit in the United States mail
as specified above. Either Party may change its address for notices by giving notice to the
other Party in the manner specified in this section.



     8. Choice of Law.



          This Agreement is made in the State of California. This Agreement shall be construed and
interpreted in accordance with the internal laws of the State of California.




     9. Integration.



          This Agreement, including Exhibit A, the Plan, as well as the Employee Handbook contain the
complete, final and exclusive agreement of the Parties relating to the terms and conditions of the
Executive’s employment and the termination of Executive’s employment, and supersedes all prior and
contemporaneous oral and written employment agreements or arrangements between the Parties.




     10. Amendment.



          This Agreement cannot be amended or modified except by a written agreement signed by the
Executive and the Company.




     11. Waiver.



          No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived,
except with the written consent of the Party against whom the wavier is claimed, and any waiver or
any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.




     12. Severability.



          The finding by a court of competent jurisdiction of the unenforceability, invalidity or
illegality of any provision of this Agreement shall not render any other provision of this
Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or
replace the invalid or unenforceable term or provision with a valid and enforceable term or
provision, which most accurately represents the Parties’ intention with respect to the invalid or
unenforceable term, or provision.





11.









 








     13. Interpretation; Construction.



          The headings set forth in this Agreement are for convenience of reference only and shall not
be used in interpreting this Agreement. This Agreement has been drafted by legal counsel
representing the Company, but the Executive has been encouraged to consult with, and has consulted
with, Executive’s own independent counsel and tax advisors with respect to the terms of this
Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and any rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.




     14. Representations and Warranties.



          The Executive represents and warrants that Executive is not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms and covenants
contained in this Agreement, and that Executive’s execution and performance of this Agreement will
not violate or breach any other agreements between the Executive and any other person or entity.




     15. Counterparts.



          This Agreement may be executed in two counterparts, each of which shall be deemed an original,
all of which together shall contribute one and the same instrument.




     16. Arbitration.



          To ensure the rapid and economical resolution of disputes that may arise in connection with
the Executive’s employment with the Company, the Executive and the Company agree that any and all
disputes, claims, or causes of action, in law or equity, arising from or relating to Executive’s
employment, or the termination of that employment, will be resolved, to the fullest extent
permitted by law, by final, binding and confidential arbitration in Orange County or San Diego
County, California conducted by the Judicial Arbitration and Mediation Services/Endispute, Inc.
(“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; provided
that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution
of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision including the arbitrator’s essential findings and conclusions and a
statement of the award. Accordingly, the Executive and the Company hereby waive any right to a
jury trial. Both the Executive and the Company shall be entitled to all rights and remedies that
either the Executive or the Company would be entitled to pursue in a court of law. The Company
shall pay any JAMS filing fee and shall pay the arbitrator’s fee. Nothing in this Agreement is
intended to prevent either the Executive or the Company from obtaining injunctive relief in court
to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding the
foregoing, the Executive and the Company each have the right to resolve any issue or dispute
involving confidential, proprietary or
trade secret information, or intellectual property rights, by Court action instead of
arbitration.





12.









 








     17. Trade Secrets Of Others.



          It is the understanding of both the Company and the Executive that the Executive shall not
divulge to the Company and/or its subsidiaries any confidential information or trade secrets
belonging to others, including the Executive’s former employers, nor shall the Company and/or its
Affiliates seek to elicit from the Executive any such information. Consistent with the foregoing,
the Executive shall not provide to the Company and/or its Affiliates, and the Company and/or its
Affiliates shall not request, any documents or copies of documents containing such information.




     18. Advertising Waiver.



          For so long as he remains employed, the Executive agrees to permit the Company, and persons or
other organizations authorized by the Company to use, publish and distribute advertising or sales
promotional literature concerning the products and/or services of the Company, or the machinery and
equipment used in the provision thereof, in which the Executive’s name and/or pictures of the
Executive taken in the course of the Executive’s provision of services to the Company appear. The
Executive hereby waives and releases any claim or right the Executive may otherwise have arising
out of such use, publication or distribution.




     In Witness Whereof, the Parties have executed this Agreement as of the date first
above written.



	 	 	 	 	 
	IDM Pharma Inc.

 	 	 
	By:  	/s/ Robert J. De Vaere
 	 	 
	Name: 	Robert J. De Vaere 	 	 
	Its: 	Vice President, Finance and Administration and Chief Financial Officer 	 	 



	 	 	 	 	 
	Dated:  	December 30, 2008



	

Executive:

 	 	 
	/s/ Timothy C. Melkus
 	 	 
	TIMOTHY C. MELKUS 	 	 
	
Dated:  	
December 30, 2008 	 	 
	 




13.









 








EXHIBIT A




RELEASE AND WAIVER OF CLAIMS




TO BE SIGNED FOLLOWING TERMINATION WITHOUT CAUSE

OR FOR GOOD REASON





     In consideration of the payments and other benefits set forth in the Amended and Restated
Employment Agreement of December 11, 2008 to which this form is attached, I, Timothy C. Melkus
hereby furnish IDM Pharma Inc. (the “Company”), with the following release and waiver
(“Release and Waiver”).



     In exchange for the consideration provided to me by the Employment Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release the Company and its
directors, officers, employees, shareholders, 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 my signing this Release and
Waiver. This general release includes, but is not limited to: (1) all claims arising out of or in
any way related to my employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock
options, or any other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all
tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation
of public policy; and (5) all federal, state, and local statutory claims, including 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).



     I also acknowledge that I have read and understand Section 1542 of the California Civil Code
which reads as follows: “A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the debtor.” I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any jurisdiction of similar
effect with respect to any claims I may have against the Company.



     I acknowledge that, among other rights, I am waiving and releasing any rights I may have under
ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for
this Release and Waiver is in addition to anything of value to which I was already entitled as an
executive of the Company. If I am 40 years of age or older upon execution of this Release and
Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit
Protection Act, that: (a) the release and waiver granted herein does not relate to claims under
the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an
attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the
date of termination of my employment with the Company in which to consider this Release and Waiver
(although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven
(7) days following the execution of this Release and Waiver to



1.









 







revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective
until the seven (7) day revocation period has expired.



     I acknowledge my continuing obligations under my Proprietary Information and Inventions
Agreement. Pursuant to the Proprietary Information and Inventions Agreement I understand that
among other things, I must not use or disclose any confidential or proprietary information of the
Company and I must immediately return all Company property and documents (including all embodiments
of proprietary information) and all copies thereof in my possession or control. I understand and
agree that my right to the severance pay I am receiving in exchange for my agreement to the terms
of this Release and Waiver is contingent upon my continued compliance with my Proprietary
Information and Inventions Agreement.



     This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire
agreement between the Company and me with regard to the subject matter hereof. I am not relying on
any promise or representation by the Company that is not expressly stated herein. This Release and
Waiver may only be modified by a writing signed by both me and a duly authorized officer of the
Company.



	 	 	 	 	 
	 	 	 
	Date: ____________	By:  	 
 	 
	 	 	Timothy C. Melkus 	 
	 	 	 	 
	 




2.