Document:

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                                                                   EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of July 30, 2004 ("Employment Agreement"), by and
between MKS Instruments, Inc., a Massachusetts Corporation (the "Corporation"),
and Gerald G. Colella, of Lowell, MA (the "Employee").

WHEREAS, the Corporation and the Employee entered into an Amended and Restated
Employment Agreement dated December 15, 1995 (the "Original Employment
Agreement"); and

WHEREAS, the Corporation intends to provide certain supplemental retirement
benefits to the Employee as more particularly set forth herein; and

WHEREAS, the Corporation and the Employee intend that this Employment Agreement
shall supercede the Original Employment Agreement and that as of the date
hereof, the Original Employment Agreement shall be of no further force and
effect;

NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the Corporation and the Employee hereby agree as follows:

      (1) Term of Employment: The Corporation hereby employs the Employee, and
the Employee hereby accepts employment with the Corporation, for a period
commencing as of July 30, 2004 and continuing from month to month thereafter
until terminated as provided in this Section (1). Either the Corporation or the
Employee may terminate the employment of the Employee under this Employment
Agreement at any time after July 30, 2004 by giving written notice to the other
party stating its or his election to terminate the employment of the Employee
under this Employment Agreement. The employment of the Employee under this
Employment Agreement shall terminate thirty (30) days after the date of receipt
by the other party of such notice; provided, however, that the employment of the
Employee under this Employment Agreement is subject to prior termination as
hereinafter provided in Section (5). Notwithstanding the above, the Corporation
shall be entitled, at its sole discretion, to waive the obligation of the
Employee to continue to work during the thirty (30) day notice period.

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      (2) Capacity: The Employee shall serve as Vice President of Global
Business and Service Operations and shall have such authority and will perform
such duties as are delegated to him by the President & COO of the Corporation or
his designee that are consistent with this position and his training and
experience for the term of employment under this Employment Agreement.

      (3) Extent of Services: During the term of employment of the Employee
under this Employment Agreement, the Employee shall devote his full time to, and
use his best efforts in the furtherance of, the business of the Corporation and
shall not engage in any other business activity whether or not such business
activity is pursued for gain or any other pecuniary advantage, without the prior
written consent of the Corporation.

      (4) Compensation: In consideration of the services to be rendered by the
Employee under this Employment Agreement, the Corporation agrees to pay, and the
Employee agrees to accept, the following compensation:

            (a) Base Salary: A base salary at the rate of two hundred fifty
thousand seven hundred and eighteen dollars ($250,718) per year for the term of
employment of the Employee under this Employment Agreement. The base salary
shall be payable in equal biweekly installments, subject to usual withholding
requirements, and will be subject to any changes in pay policies that may be
established by the Corporation. The base salary will be reviewed regularly
according to the practices of the Corporation. No overtime pay will be paid to
the Employee by the Corporation.

            (b) MKS Instruments Profit Sharing and Retirement Savings Plan: The
Employee shall be eligible to become a participant under the profit sharing plan
of the Corporation on fulfilling the conditions set forth in the MKS Instruments
Profit Sharing and Retirement Savings Plan.

            (c) Vacation: The Employee shall be entitled to an annual vacation
leave of twenty-five (25) days at full pay during each year of this Employment
Agreement, subject to the Employee arranging such vacation so as not to affect
adversely the ability of the Corporation to transact its necessary business.

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            (d) Life Insurance: The Corporation shall provide, and pay all of
the premiums for, term life insurance for the Employee during the term of
employment of the Employee under this Employment Agreement in accordance with
the term life insurance plan of the Corporation.

            (e) Medical/Dental Insurance: The Corporation shall provide group
medical/dental insurance for the Employee under the plans of the Corporation
applicable to the Employee during the term of employment of the Employee under
this Employment Agreement.

            (f) Retirement Benefits: The Employee shall be eligible to
participate in supplemental retirement benefits according to the terms and
conditions set forth in Appendix A of this Employment Agreement.

            (g) Other Benefits: The Corporation shall provide other benefits for
the Employee under the plans of the Corporation applicable to the Employee
during the term of employment of the Employee under this Employment Agreement.

      (5) Termination: The employment of the Employee under this Employment
Agreement shall terminate:

            (a) On the expiration of the period of employment as provided in
                Section (1).

            (b) Upon the death of the Employee.

            (c) At the election of the Corporation (i) if the Employee shall
refuse to perform the services required of him under this Employment Agreement,
or (ii) if the Employee shall fail, or refuse, to perform the other covenants
and agreements required of him under this Employment Agreement, or (iii) for
"cause", which term shall mean conviction for the commission of a felony,
willful failure by the Employee to perform his responsibilities to the
Corporation, or willful misconduct by the Employee.

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      (6) Payment Upon Termination:

            (a) If the employment of the Employee is terminated by the
Corporation other than pursuant to Section 5 (c) hereof, the Corporation (i)
shall continue to pay Employee the Base Salary in effect immediately prior to
the time of such termination for six (6) months after the last full day Employee
works under this Agreement at its normal payroll payment dates; (ii) shall
reimburse Employee for the premiums (if any) he pays for continuation of life
insurance should he elect to exercise the conversion feature of the
Corporation's group life policy then in effect for six (6) months after the last
full day Employee works under this Agreement; and (iii) continue to pay for such
medical/dental/vision insurance as Employee may then receive for six (6) months
after the last full day Employee works under this Agreement (such payments of
Base Salary and payments or reimbursements of insurance premiums by the
Corporation, the "Severance Benefits).Employee agrees that, (a) his eligibility
for or entitlement to the foregoing Severance Benefits shall be subject to
Employee's execution and delivery of a release, in such form as the Corporation
may require, that, among other things, may be a general release of any and all
claims Employee may have against Employer, (b) Employee shall have no rights or
remedies in the event of his or her termination by the Corporation without Cause
and other than as a result of Disability or death except for those set forth in
this Agreement and (c) Employee's right to receive any of the foregoing
Severance Benefits shall be expressly conditioned upon Employee's full
compliance with the Confidentiality Agreement, pursuant to its continued
effectiveness, and Employee's full cooperation with the Corporation in both
fulfilling the terms of this Agreement and the Confidentiality Agreement and
otherwise performing such actions as the Corporation may request in
transitioning Employee from his employment with the Corporation and upon any
breach of either such agreement by Employee, Employee's rights to any continued
payment of Severance Benefits shall immediately cease and Employee shall be
obligated to repay to the Corporation all amounts paid by the Corporation for
the Severance Benefits except for the amount of $1,000, which Employee shall be
entitled to retain.

            (b) If the employment of the Employee is terminated by death, the
Corporation shall pay to the estate of the Employee the compensation which would
otherwise be payable to the Employee at the end of the month in which his death
occurs.

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            (c) In the event the employment of the Employee is terminated at the
election of the Corporation pursuant to Section (5) (c) hereof, the Employee
shall only be entitled to his base salary through the last day of actual
employment or the date of termination, whichever is earlier.

            (d) In the event the Employee voluntarily terminates his employment
on the expiration of the period of employment as provided in Section (1), the
Employee shall not be entitled to any compensation, and the Corporation shall
have no obligation to pay the Employee any compensation, except as is provided
in this Employment Agreement.

      (7) Trade Secrets: The Employee covenants and agrees that he will
communicate to the Corporation, and will not divulge or communicate to any other
person, partnership, corporation or other entity without the prior written
consent of the Corporation, any trade secrets of the Corporation or confidential
information relating to the business of the Corporation or any one connected
with the Corporation, and that such trade secrets and confidential information
shall not be used by the Employee either on his own behalf or for the benefit of
others or disclosed by the Employee to any one, except to the Corporation,
during or after the term of employment of the Employee under this Employment
Agreement.

      (8) Inventions and Patents:

            (a) The Employee shall make prompt full disclosure in writing to the
Corporation of all inventions, improvements and discoveries, whether or not
patentable, which the Employee conceives, devises, makes, discovers, develops,
perfects or first reduces to practice, either alone or jointly with others,
during the term of employment of the Employee under this Employment Agreement,
which relate in any way to the fields, products or business of the Corporation,
including development and research, whether during or out of the usual hours of
work or on or off the premises of the Corporation or by use of the facilities of
the Corporation or otherwise and whether at the request or suggestion of the
Corporation or otherwise (all such inventions, improvements and discoveries
being hereinafter called the "Inventions"), including any Inventions, whether or
not patentable, conceived, devised, made, discovered, developed, perfected or
first reduced to practice by the Employee after the employment of the Employee
under this Employment Agreement is terminated if the Inventions were conceived
by the Employee

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during the term of employment of the Employee under this Employment Agreement.
Any Inventions, whether or not patentable, conceived, devised, made, discovered,
developed, perfected or first reduced to practice by the Employee within six (6)
months of the date of termination of the employment of the Employee under this
Employment Agreement shall be conclusively presumed to have been conceived
during the term of employment of the Employee under this Employment Agreement.

            (b) The Employee agrees that the Inventions shall be the sole and
exclusive property of the Corporation.

            (c) The Employee agrees to assist the Corporation and its nominees
in every reasonable way (entirely at its or their expense) to obtain for the
benefit of the Corporation letters patent for the Inventions and trademarks,
trade names and copyrights relating to the Inventions, and any renewals,
extensions or reissues thereof, in any and all countries, and agrees to make,
execute, acknowledge and deliver, at the request of the Corporation, all written
applications for letters patent, trademarks, trade names and copyrights relating
to the Inventions and any renewals, extensions or reissues thereof, in any and
all countries, and all documents with respect thereto, and all powers of
attorney relating thereto and, without further compensation, to assign to the
Corporation or its nominee all the right, title and interest of the Employee in
and to such applications and to any patents, trademarks, trade names or
copyrights which shall thereafter issue on any such applications, and to
execute, acknowledge and deliver all other documents deemed necessary by the
Corporation to transfer to or vest in the Corporation all of the right, title
and interest of the Employee in and to the Inventions, and to such trademarks,
trade names, patents and copyrights together with exclusive rights to make, use,
license and sell them throughout the world.

            (d) The Employee agrees that even though his employment is
terminated under this Employment Agreement he will, at any time after such
termination of employment, carry out and perform all of the agreements of
Subsections (8) (a) and (8) (c) above, and will at any time and at all times
cooperate with the Corporation in the prosecution and/or defense of any
litigation which may arise in connection with the Inventions, provided, however,
that should such services be rendered after termination of employment of the
Employee under this Employment Agreement, the Employee shall be paid reasonable
compensation on a per diem basis.

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            (e) The Employee agrees to make and maintain adequate and current
written records of all Inventions in the form of notes, sketches, drawings, or
reports relating thereto, which records shall be and remain the property of, and
available to, the Corporation at all times.

            (f) The Employee agrees that he will, upon leaving the employment of
the Corporation, promptly deliver to the Corporation all originals and copies of
disclosures, drawings, prints, letters, notes, and reports either typed,
handwritten or otherwise memorialized, belonging to the Corporation which are in
his possession or under his control and the Employee agrees that he will not
retain or give away or make copies of the originals or copies of any such
disclosures, drawings, prints, letters, notes or reports.

      (9) Property of Corporation: All files, records, reports, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Corporation, whether prepared by the Employee or otherwise coming into
his possession, shall remain the exclusive property of the Corporation and shall
not be removed by the Employee from the premises of the Corporation under any
circumstances whatsoever without the prior written consent of the Corporation.

      (10) Non-Competition:

            (a) During the term of employment of the Employee under this
Employment Agreement, and during a period of one (1) year after termination of
employment of the Employee under this Employment Agreement without regard to the
cause of termination of employment and whether or not such termination of
employment was caused by the Employee or by the Corporation, (i) the Employee
shall not engage, either directly or indirectly, in any manner or capacity, in
any business or activity which is competitive with any business or activity
conducted by the Corporation; (ii) the Employee shall not work for or employ,
directly or indirectly, or cause to be employed by another, any person who was
an employee, officer or agent of the Corporation or of any of its subsidiaries
at any time during a period of twelve (12) months prior to the termination of
the employment of the Employee under this Employment Agreement nor shall the
Employee form any partnership with, or establish any business venture in
cooperation with, any such person which is competitive with any business or
activity of the Corporation; (iii) the Employee shall not give, sell or lease
any goods or services

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competitive with the goods or services of the Corporation or its subsidiaries to
any person, partnership, corporation or other entity who purchased goods or
services from the Corporation or its subsidiaries within one (1) year before the
termination of the employment of the Employee under this Employment Agreement;
(iv) the Employee shall not have any material financial interest, or participate
as a director, officer, 5% stockholder, partner, employee, consultant or
otherwise, in any corporation, partnership or other entity which is competitive
with any business or activity conducted by the Corporation.

            (b) The Corporation and the Employee agree that the services of the
Employee are of a personal, special, unique and extraordinary character, and
cannot be replaced by the Corporation without great difficulty, and that the
violation by the Employee of any of his agreements under this Section (10) would
damage the goodwill of the Corporation and cause the Corporation irreparable
harm which could not reasonably or adequately be compensated in damages in an
action at law, and that the agreements of the Employee under this Section (10)
may be enforced by the Corporation in equity by an injunction or restraining
order in addition to being enforced by the Corporation at law.

            (c) In the event that this Section (10) shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too great a range of activities, it shall
be interpreted to extend only over the maximum period of time or range of
activities as to which it may be enforceable.

      (11) Non-Solicitation: The Employee shall not, on his own behalf or in the
service or on behalf of others, directly or indirectly:

            (a) solicit, entice or induce any Customer (as defined below) to
become a customer, distributor or supplier of any other person, firm or
corporation with respect to products and/or services sold or under development
by the Corporation during his employment at the Corporation, or to cease doing
business with the Corporation, and the Employee shall not contact or approach
any such person, firm or corporation for such purpose or authorize or knowingly
approve the taking of such actions by any other person for a period of twelve
(12) months from the date of the termination of employment of the Employee under
this Employment Agreement; or

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            (b) solicit, recruit or hire (or attempt to solicit, recruit or
hire) any employee, officer or agent of the Corporation or contractor engaged by
the Corporation (whether or not such person is a full-time employee or whether
or not such employment is pursuant to a written agreement or at-will) to
terminate such person's employment or engagement with the Corporation or work
for a third party other than the Corporation for a period of twelve (12) months
after the date of the termination of employment of the Employee under this
Employment Agreement, or engage in any activity that would cause such employee
or contractor to violate any agreement with the Corporation, nor shall the
Employee form any partnership with, or establish any business venture in
cooperation with, any such person.

            (c) For the purposes of this Section (11), a "Customer" means any
person or entity which as of the date of the termination of employment of the
Employee under this Employment Agreement was, within two (2) years prior to such
time, a customer, distributor or supplier of the Corporation, and references to
the Corporation shall be deemed to include any affiliate or subsidiary of the
Corporation.

      (12) Notice: Any and all notices under this Employment Agreement shall be
in writing and, if to the Corporation, shall be duly given if sent to the
Corporation by registered or certified mail, postage prepaid, return receipt
requested, at the address of the Corporation set forth under its name below or
at such other address as the Corporation may hereafter designate to the Employee
in writing for the purpose, and, if to the Employee, shall be duly given if
delivered to the Employee by hand or if sent to the Employee by registered or
certified mail, postage prepaid, return receipt requested, at the address of the
Employee set forth under his name below or at such other address as the Employee
may hereafter designate to the Corporation in writing for the purpose.

      (13) Assignment: The rights and obligations of the Corporation under this
Employment Agreement shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Corporation. The rights and obligations of the
Employee under this Employment Agreement shall inure to the benefit of, and
shall be binding upon, the heirs, executors and legal representatives of the
Employee.

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      (14) Entire Agreement and Severability:

            (a) This Employment Agreement, and the attached Appendix A,
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of the Employee by the Corporation
and contains all of the covenants and agreements between the parties with
respect to such employment. Each party to this Employment Agreement acknowledges
that no representations, inducements, promises or agreements, oral or otherwise,
have been made by any party, or any one acting on behalf of any party, which are
not embodied herein, and that no other agreement, statement or promise not
contained in this Employment Agreement, and the attached Appendix A, shall be
valid and binding. Any modification of this Employment Agreement, and the
attached Appendix A, will be effective only if it is in writing signed by both
parties to this Employment Agreement.

            (b) If any provision in this Employment Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.

            (c) All pronouns used herein shall include the masculine, feminine,
and neuter gender as the context requires.

      (15) Governing Law: This Employment Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts
applicable to contracts made and to be performed entirely within The
Commonwealth of Massachusetts without regard to its conflict of laws principles.

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IN WITNESS WHEREOF, the parties hereto have executed, in The Commonwealth of
Massachusetts, this Employment Agreement as a sealed instrument, all as of the
day, month and year first written above.

MKS INSTRUMENTS, INC.

By: /s/ John R. Bertucci
    --------------------------------
    Chairman & CEO

    90 Industrial Way
    Wilmington, MA  01887

    /s/ Gerald G. Colella
    --------------------------------
    Legal Signature

    Gerald G. Colella
    Address:

    61 Heritage Drive
    --------------------------------
    Lowell, Mass 01852
    --------------------------------

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                                                             _____GERALD COLELLA

                                   APPENDIX A

                        SUPPLEMENTAL RETIREMENT BENEFITS

1. PURPOSE. (a) GENERAL: The purpose of this Appendix A is to provide Employee
with supplemental retirement benefits to encourage his continued employment with
the Corporation. Benefits will be payable only if Employee fully complies with
all of the requirements of this Appendix A.

(b): For Benefit of Employee Only: Benefits under this Appendix A are provided
for the benefit of Employee only. No other employee shall accrue any rights of
any kind as a result of the existence of the arrangement described in this
Appendix A. Supplemental retirement benefits may be provided to an employee only
as specifically authorized by the Board of Directors of the Corporation.

2. DEFINITIONS. As used in this Appendix A, the following terms have the
meanings set forth below, unless a different meaning is required by the context:

2.1. "Actuarially Equivalent" means a benefit of equivalent value to another
benefit, determined on the following basis:

      Interest Rate: The average annual interest rate on 10-year Treasury
      securities as published in the Internal Revenue Bulletin for the calendar
      quarter immediately preceding the calendar quarter in which the
      actuarially equivalent benefit is being determined plus 25 basis points;
      and

      Mortality: The most recent "applicable mortality table" prescribed by
      Section 417(e)(3)(A)(ii) of the Internal Revenue Code (or a successor
      provision as determined by the Corporation).

2.2. "Base salary" means base salary as defined in the Employment Agreement,
before any pre-tax salary reductions for participation in any benefits plan of
the Corporation.

2.3. "Beneficiary" means one or more persons, trusts, estates or other entities,
designated by Employee to receive death benefits under Sections 5.1(b), 5.2(b)
or 6.1(b) of this Appendix A upon Employee's death. If Employee fails to
designate a Beneficiary or if all designated

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Beneficiaries predecease Employee or die prior to complete distribution of
Employee's benefits under Section 5.1(b) or 5.2(b), then such death benefits
shall be payable to the executor or personal representative of Employee's
estate.

Employee shall designate his Beneficiary by completing and signing a beneficiary
designation form prescribed by the Corporation, and returning it to the
Corporation or its designated agent. Employee shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the
beneficiary designation form and the Corporation's rules and procedures, as in
effect from time to time. Upon the acceptance by the Corporation of a new
beneficiary designation form, all Beneficiary designations previously filed
shall be canceled. The Corporation shall be entitled to rely on the last
beneficiary designation form filed by Employee and accepted by the Corporation
prior to his or her death. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in writing by the
Corporation or its designated agent. If the Corporation has any doubt as to the
proper Beneficiary to receive payments pursuant to this Appendix A, the
Corporation shall have the right, exercisable in its discretion, to withhold
such payments until this matter is resolved to the Corporation's satisfaction.

2.4. "Bonus" means a bonus paid under the Corporation's Management Incentive
Program.

2.5. "Change in Control" means the first to occur of any of the following
events:

      (a) Any "person" (as that term is used in Section 13 and 14(d)(2) of the
      Securities Exchange Act of 1934 ("Exchange Act")) becomes the beneficial
      owner (as that term is used in Section 13(d) of the Exchange Act),
      directly or indirectly, of fifty percent (50%) or more of the
      Corporation's capital stock entitled to vote in the election of directors;

      (b) The shareholders of the Corporation approve any consolidation or
      merger of the Corporation, other than a consolidation or merger of the
      Corporation in which the holders of the common stock of the Corporation
      immediately prior to the consolidation or merger hold more than fifty
      percent (50%) of the common stock of the surviving corporation immediately
      after the consolidation or merger;

      (c) The shareholders of the Corporation approve any plan or proposal for
      the liquidation or dissolution of the Corporation; or

      (d) The shareholders of the Corporation approve the sale or transfer of
      all or substantially all of the assets of the Corporation to parties that
      are not within a

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      "controlled group of corporations" (as defined in Code Section 1563) in
      which the Corporation is a member.

2.6. "Corporation" means MKS Instruments, Inc.. and any corporation, trust,
association or enterprise which is required to be considered, together with the
Corporation, as one employer pursuant to the provisions of Sections 414(b),
414(c), 414(m) or 414(o) of the Code.

2.7. "Compensation" for any calendar year means the sum of Employee's Base
Salary for such year plus any Bonus paid in such year.

2.8. "Early Retirement Benefit" means the Retirement benefit determined under
Section 5.2 of this Appendix A upon Employee's Retirement prior to his Normal
Retirement Date.

2.9. "Employment Agreement" means the Employment Agreement between Employee and
the Corporation that contains this Appendix A.

2.10. "Final Average Pay" means, for purposes of Section 5 the average of
Employee's three (3) highest years of Compensation during the ten (10) calendar
year period immediately preceding the calendar year in which Employee Retires,
and for purposes of determining death benefits under Section 6 the average of
Employee's three (3) highest years of Compensation during the ten (10) calendar
year period immediately preceding the calendar year containing Employee's date
of death. The foregoing notwithstanding, any calendar year in which Employee has
no Compensation from the Corporation shall be ignored in determining such ten
calendar year period.

2.11. "Normal Retirement Age" means Employee's 62nd birthday.

2.12. "Normal Retirement Benefit" means the Retirement benefit determined under
Section 5.1 of this Appendix A upon Employee's Retirement on or after his Normal
Retirement Date.

2.13. "Normal Retirement Date" means the first day of the month in which
Employee attains Normal Retirement Age.

2.14. "Permanent and Total Disability" means disability as defined in Section
216(i)(1) of the Social Security Act (in general, 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 has lasted or can
be expected to last for a continuous period of not less than

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12 months, or blindness). Employee shall be conclusively presumed to be
Permanently and Totally Disabled upon determination that he is disabled by the
Social Security Administration.

2.15. "Retires" or "Retired" means Employee's termination of employment with the
Corporation upon or after satisfying the vesting requirements of Section 4.1.
Employee shall be deemed to have Retired with a fully vested Normal Retirement
Benefit on the earliest of the date he becomes Permanently and Totally Disabled,
the date the Corporation terminates Employee's employment with the Corporation
for any reason other than Termination for Cause, the date of Employee's death
while employed by the Corporation, or the date of Employee's qualifying
termination of employment in connection with a Change in Control in accordance
with the provisions of Section 7 of this Appendix A.

2.16. "Retirement Date" means the date Employee Retires or is deemed to have
Retired in accordance with Section 2.15 of this Appendix A. The term "Retirement
Date" shall include Employee's Early Retirement Date as defined in Section 5.2
of this Appendix A.

2.17. "Termination of Employment" means Termination for Cause, or Employee's
voluntary severance from employment with the Corporation for any reason other
than Retirement.

2.18. "Termination for Cause" means, solely for purposes of this Appendix A,
termination of Employee's employment by the Corporation as a result of
Employee's conviction for the commission of a felony, material breach of any
employment or other agreements between Employee and the Corporation, or willful
failure to perform the material responsibilities of his position with the
Corporation.

2.19. "Trust" means the Trust established pursuant to Section 10 of this
Appendix A.

3. ELIGIBILITY FOR RETIREMENT BENEFITS.

3.1. General: Subject to Sections 4.2, 4.3, 4.4, and 4.5 the Corporation shall
pay the retirement benefits described in this Appendix A if Employee Retires
from employment with the Corporation upon or after satisfying the vesting
requirements set forth in Section 4.1. 3.2. Disability: Solely for purposes of
determining eligibility for benefits payable under this Appendix A, Employee
shall be deemed to be an employee of the Corporation during any period for which
Employee receives benefits under any short term or long term disability plan of
the Corporation but is not Permanently and Totally Disabled, and during such
period Employee shall continue to accrue service for purposes of the vesting
requirements set forth in

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Section 4.1. If Employee remains disabled on the date he satisfies the vesting
requirements set forth in Section 4.1, he shall be deemed to have Retired from
employment from the Corporation on that date for purposes of this Appendix A.
This Section 3.2 shall have no bearing on whether Employee remains an employee
of the Corporation for any other purpose.

4. VESTING.

4.1 General: Except as provided in Sections 4.2, 4.3, 4.4, and 4.5, and subject
to Section 10.2, Employee's benefits under this Appendix A shall be fully vested
and nonforfeitable if Employee satisfies both (a) and (b) while employed with
the Corporation:

      (a) attains age 60, and

      (b) has 25 years of service with the Corporation. Employee shall have 25
      years of service on the 25th anniversary of Employee's original hire date.

The foregoing notwithstanding, Employee shall be fully vested in his benefit
under this Appendix A on the earliest of the date (a) Employee dies while
employed by the Corporation, (b) Employee becomes Permanently and Totally
Disabled, (c) the Corporation terminates Employee's employment with the
Corporation for any reason other than Termination for Cause as defined in
Section 2.18 of this Appendix A, or (d) of Employee's qualifying termination of
employment in connection with a Change in Control in accordance with the
requirements of Section 7 of this Appendix A. Death benefits shall be determined
in accordance with Section 6.

4.2. Termination for Cause: All benefits shall be forfeited, and no amount shall
be payable under this Appendix A, in the event of Employee's Termination for
Cause.

4.3. Compliance with Noncompete, Nondisclosure, and Nonsolicitation Agreements.
All benefits under this Appendix A are expressly conditioned upon Employee's
compliance with the terms of any noncompetition, nondisclosure, or
nonsolicitation provisions contained in the Employment Agreement, or in any
other agreement between Employee and the Corporation. All benefits payable under
this Appendix A shall be forfeited, and no amount shall be payable, in the event
Employee violates the terms of any such provisions. If Employee violates the
terms of any such provisions, and benefit payments have commenced to Employee,
any such payments shall cease, and Employee shall repay all previously paid
benefits to the Corporation upon demand. If Employee fails to repay such amounts
upon demand, the

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Corporation shall have the right to take any action necessary to recover such
payments from Employee.

4.4. Notice of Intent to Retire. Benefits payable under this Appendix A are
specifically conditioned upon Employee providing to the Corporation written
notice of Employee's intent to Retire at least six months prior to Employee's
Retirement date. In the event Employee terminates employment with the
Corporation for any reason other than death without satisfying the notice
requirements of this Section 4.4 all benefits shall be forfeited, and no amount
shall be payable under this Appendix A. The foregoing notwithstanding, the
Corporation, in its sole and absolute discretion, may elect to waive the notice
requirement of this Section 4.4. The foregoing notwithstanding, this Section 4.4
shall not apply to death benefits payable under Section 6 of this Appendix A, or
to Retirement benefits payable under Section 5 as a result of Employee's deemed
Retirement under Section 2.15 or Section 7 of this Appendix A.

4.5. Release. Benefits payable under this Appendix A (other than death benefits
payable under Section 6) are specifically conditioned upon and provided in
exchange for Employee signing a separation agreement that releases the
Corporation from any liabilities that may have arisen as a result of Employee's
employment and/or termination of employment with the Corporation. In the event
Employee terminates employment with the Corporation for any reason other than
death without satisfying the requirements of this Section 4.5 all benefits shall
be forfeited, and no amount shall be payable under this Appendix A.

4.6. Termination of Employment Prior to Satisfying Vesting Requirements. No
benefits are payable under this Appendix A upon Employee's Termination of
Employment with the Corporation prior to satisfying the vesting requirements set
forth in Section 4.1.

5. RETIREMENT BENEFITS.

5.1. Normal Retirement Benefit. This Section 5.1 describes the Retirement
benefit payable by the Corporation in the event Employee Retires (or is deemed
to have Retired in accordance with Section 2.15 or Section 7 of this Appendix A)
on or after his Normal Retirement Date. Employee's Normal Retirement Benefit
shall be paid in the form of an Actuarially Equivalent lump sum, as set forth in
Section 5.3(a), unless Employee makes the election described in Section 5.3(b).

(a) Married on Retirement Date: If Employee is married on his Retirement Date,
Employee's Normal Retirement Benefit shall be:

                                        6
<PAGE>

            50% times Final Average Pay

payable annually for the life of Employee with 50% of such amount continuing
after Employee's death to his spouse for her life. Payments shall commence as
soon as administratively practicable following Employee's Retirement Date, and
subsequent payments shall be made as soon as administrative practicable
following each anniversary of Employee's Retirement Date (payments shall not,
however, commence earlier than the date permitted by federal law). Solely for
purposes of this Section 5.1, "Spouse" shall mean the spouse to whom Employee is
married on his Retirement Date (regardless of whether that is the same spouse to
whom he is married on his date of death), unless the Corporation is directed by
a court of competent jurisdiction to treat someone else as Employee's "spouse."
If the spouse to whom Employee is married on his Retirement Date does not
survive Employee, no survivor death benefit shall be payable under this Section
5.1, without regard to whether employee is married on his date of death.

(b) Not Married on Retirement Date: If Employee is not married on his Retirement
Date, Employee's Normal Retirement Benefit shall be:

            50% times Final Average Pay

payable annually for the life of Employee with a ten year certain guarantee.
Payments shall commence as soon as administratively practicable following
Employee's Retirement Date, and subsequent payments shall be made as soon as
administrative practicable following each anniversary of Employee's Retirement
Date (payments shall not, however, commence earlier than the date permitted by
federal law). If Employee dies before receiving 10 annual installments, the
Corporation shall pay a lump sum benefit to Employee's Beneficiary that is
Actuarially Equivalent to the additional benefit that would have been payable to
Employee had he continued to receive annual installments up to a total of 10
annual installments.

5.2. Early Retirement Benefit. This Section 5.2 describes the Retirement benefit
payable by the Corporation in the event Employee Retires prior to his Normal
Retirement Date. Employee may Retire from employment with the Corporation prior
to his Normal Retirement Date on the first day of any month coincident with or
next following the date he satisfies the vesting requirements of section 4.1.
The date on which Employee Retires under this Section 5.2 shall be his Early
Retirement Date. Employee's Early Retirement Benefit shall be paid in the form
of an Actuarially Equivalent lump sum, as set forth in Section 5.3(a), unless
Employee makes the election described in Section 5.3(b).

                                        7
<PAGE>

(a) Married on Early Retirement Date: If Employee is married on his Early
Retirement Date, Employee's Early Retirement Benefit shall be:

                        50% times Final Average Pay

multiplied by the applicable percentage as set forth in the following schedule:

<TABLE>
<S>                                  <C>        <C>      <C>
Age at which                          62        61       60
Early Retirement
Benefits Commence

Applicable Percentage                100%       90       80
</TABLE>

payable annually for the life of Employee with 50% of such amount continuing
after Employee's death to his spouse for her life. Payments shall commence as
soon as administratively practicable following Employee's Early Retirement Date,
and subsequent payments shall be made as soon as administrative practicable
following each anniversary of Employee's Early Retirement Date (payments shall
not, however, commence earlier than the date permitted by federal law). Solely
for purposes of this Section 5.2, "Spouse" shall mean the spouse to whom
Employee is married on his Early Retirement Date (regardless of whether that is
the same spouse to whom he is married on his date of death), unless the
Corporation is directed by a court of competent jurisdiction to treat someone
else as Employee's "spouse." If the spouse to whom Employee is married on his
Early Retirement Date does not survive Employee, no survivor death benefit shall
be payable under this Section 5.2, without regard to whether employee is married
on his date of death.

(b) Not Married on Early Retirement Date: If Employee is not married on his
Early Retirement Date, Employee's Early Retirement Benefit shall be:

                        50% times Final Average Pay

multiplied by the applicable percentage as set forth in the following schedule:

<TABLE>
<S>                                  <C>        <C>      <C>
Age at which                          62        61       60
Early Retirement
Benefits Commence

Applicable Percentage                100%       90       80
</TABLE>

                                       8
<PAGE>

payable annually for the life of Employee with a ten year certain guarantee.
Payments shall commence as soon as administratively practicable following
Employee's Early Retirement Date, and subsequent payments shall be made as soon
as administrative practicable following each anniversary of Employee's Early
Retirement Date (payments shall not, however, commence earlier than the date
permitted by federal law). If Employee dies before receiving 10 annual
installments, the Corporation shall pay a lump sum benefit to Employee's
Beneficiary that is Actuarially Equivalent to the additional benefit that would
have been payable to Employee had he continued to receive annual installments up
to a total of 10 annual installments.

5.3. Form of Payment:

(a) Unless Employee makes the election described in Section 5.3(b) below,
Employee's Normal Retirement Benefit or Early Retirement Benefit, determined in
accordance with section 5.1 or 5.2 as applicable, shall be paid in the form of a
single lump sum that is Actuarially Equivalent to such Normal Retirement Benefit
or Early Retirement Benefit.

Such lump sum shall be paid as soon as administratively practicable following
Employee's retirement (or, if later, the earliest date permitted by Federal
law).

(b) In lieu of payment of his Normal Retirement Benefit or Early Retirement
Benefit in the form of a lump sum as described in Section 5.3(a), Employee may
elect, in the manner prescribed by the Corporation, to receive payment of his
retirement benefit in the form described in Section 5.1 or 5.2 as applicable.
Any such election must be submitted to and accepted by the Corporation no later
than the 13th month prior to Employee's Retirement Date.

5.4. Death While Employed by the Corporation. In the event Employee dies while
employed by the Corporation, any benefits payable under this Appendix A shall be
determined in accordance with Section 6.

6. DEATH WHILE EMPLOYED BY THE CORPORATION.

6.1. General. In the event Employee dies while employed by the Corporation the
death benefit payable under this Appendix A shall be as follows:

                                        9
<PAGE>

      (a) if Employee is married on his date of death, 50% of the lump sum that
      is Actuarially Equivalent to the Normal Retirement Benefit determined
      under Section 5.1(a) of this Appendix A, such lump sum benefit to be
      determined as if Employee Retired on his date of death after reaching
      Normal Retirement Age; or

      (b) if Employee is not married on his date of death, 50% of the lump sum
      that is Actuarially Equivalent to the Normal Retirement Benefit determined
      under Section 5.1(b) of this Appendix A, such lump sum benefit to be
      determined as if Employee Retired on his date of death after reaching
      Normal Retirement Age.

The death benefit shall be payable in a lump sum as soon as administratively
practicable following Employee's date of death.

6.2. Payee. This death benefit shall be payable to Employee's (a) surviving
spouse if Employee is married on his date of death, or (b) Beneficiary if
Employee is not married on his date of death. "Surviving spouse" for purposes of
this Section 6.2 means the spouse to whom Employee is married on his date of
death.

7. EFFECT OF A CHANGE IN CONTROL OF THE CORPORATION. Anything in this Appendix A
to the contrary notwithstanding, this Section 7 shall apply in the event of a
Change in Control. If, within three years after the date of a Change in Control
Employee's employment with the Corporation is involuntarily terminated by the
Corporation for any reason (other than Cause), or Employee voluntarily
terminates employment with the Corporation for Good Reason, and employee is not
otherwise eligible for Retirement, then Employee shall be deemed to have Retired
with a fully vested Normal Retirement Benefit on the date of such termination of
employment. Employee's Normal Retirement Benefit shall be determined as of such
deemed Retirement Date, and shall be payable in a lump sum, calculated pursuant
to Sections 5.1 and 5.3, as soon as administratively practicable following such
deemed Retirement Date.

Solely for purposes of this Section 7, "Good Reason" shall mean termination of
Employee's employment by Employee within 90 days following (i) a material
diminution in Employee's positions, duties and responsibilities from those
described in this Employment Agreement (ii) a reduction in Employee's Base
Salary (other than a reduction which is part of a general salary reduction
program affecting senior executives of the Corporation) (iii) a material
reduction in the aggregate value of the pension and welfare benefits provided to
Employee from those in effect prior to the Change in Control (other than a
reduction which is proportionate to the reductions applicable to other senior
executives pursuant to a cost-saving plan that includes all

                                       10
<PAGE>

senior executives), (iv) a material breach of any provision of this Employment
Agreement by the Corporation, (v) the Corporation's requiring Employee to be
based at a location that creates for Employee a one way commute in excess of 60
miles from his primary residence, except for required travel on the
Corporation's business to an extent substantially consistent with the business
travel obligations of Employee under this Employment Agreement. Notwithstanding
the foregoing, a termination shall not be treated as a termination for Good
Reason (i) if Employee shall have consented in writing to the occurrence of the
event giving rise to the claim of termination for Good Reason or (ii) unless
Employee shall have delivered a written notice to the Corporation within 30 days
of his having actual knowledge of the occurrence of one of such events stating
that he intends to terminate his employment for Good Reason and specifying the
factual basis for such termination, and such event, if capable of being cured,
shall not have been cured within 30 days of the receipt of such notice.

8. EFFECT OF TERMINATION OF EMPLOYMENT AND REHIRE. Upon Employee's termination
of employment with the Corporation the benefit payable under this Appendix A, if
any, shall be determined by the Corporation and such determination shall be
conclusive and binding (subject to Section 14). If Employee is subsequently
reemployed by the Corporation such reemployment, additional service, and
additional compensation shall not result in a re-determination of the benefits
due under this Appendix A. If, upon reemployment, Employee is receiving
installment payments pursuant to Section 5 those payments shall not be suspended
during any period of reemployment.

9. ADMINISTRATION.

9.1. Powers of the Corporation: The Board of Directors of the Corporation (the
"Board") shall have the sole authority to act on behalf of the Corporation under
this Appendix A (subject to Section 9.3), and shall have all the powers
necessary to administer the benefits under this Appendix A, including, without
limitation, the power to interpret the provisions of this Appendix A and to
establish rules and prescribe any forms required to administer benefits under
this Appendix A

9.2. Actions of the Board: All determinations, interpretations, rules, and
decisions of the Board shall be conclusive and binding upon all persons having
or claiming to have any interest or right under this Appendix A.

9.3. Delegation: The Board shall have the power to delegate specific duties and
responsibilities to officers or other employees of the Corporation or other
individuals or

                                       11
<PAGE>

entities. Any delegation by the Board may allow further delegations by the
individual or entity to whom the delegation is made. Any delegation may be
rescinded by the Board at any time. Each person or entity to whom a duty or
responsibility has been delegated shall be responsible for the exercise of such
duty or responsibility and shall not be responsible for any act or failure to
act of any other person or entity.

9.4. Reports and Records: The Board and those to whom the Board has delegated
duties under Section 9.3 shall keep records of all their proceedings and actions
and shall maintain books of account, records, and other data as shall be
necessary for the proper administration of this Appendix A and for compliance
with applicable law.

9.5. Costs: The costs of providing and administering the benefits under this
Appendix A shall be borne by the Corporation.

10. UNFUNDED BENEFITS; ESTABLISHMENT OF TRUST.

10.1. Unfunded Status. This Appendix A shall be unfunded for tax purposes and
for purposes of Title 1 of ERISA.

10.2. Establishment of Trust. The Corporation shall not be required to set aside
any funds to discharge its obligations hereunder, but may set aside such funds
to informally fund all or part of its obligations hereunder if it chooses to do
so, including without limitation the contribution of assets to a "rabbi trust"
(the Trust). Any setting aside of amounts, or acquisition of any insurance
policy or any other asset, by the Corporation with which to discharge its
obligations hereunder in trust or otherwise, shall not be deemed to create any
beneficial ownership interest in Employee, his surviving spouse, or Beneficiary,
and legal and equitable title to any funds so set aside shall remain in the
Corporation, and any recipient of benefits hereunder shall have no security or
other interest in such funds. The rights of Employee and his surviving spouse
and Beneficiary(ies) under this Appendix A shall be no greater than the rights
of a general unsecured creditor of the Corporation. Any and all funds so set
aside by the Corporation shall remain the general assets of the Corporation, and
subject to the claims of its general creditors, present and future.

10.3. Interrelationship of this Appendix A and the Trust. The provisions of this
Appendix A shall govern the rights of Employee to receive distributions pursuant
to the provisions of this Appendix A. The provisions of the Trust shall govern
the rights of the Corporation, Employee, and creditors of the Corporation to the
assets transferred to the Trust. The Corporation shall at all times remain
liable to carry out its obligations under this Appendix A.

                                       12
<PAGE>

10.4. Distributions from the Trust. The Corporation's obligations under this
Appendix A may be satisfied with Trust assets distributed pursuant to the terms
of the Trust, and any such distribution shall reduce the Corporation's
obligation under this Appendix A.

11. PAYMENT OF BENEFIT FOR DISABLED OR INCAPACITATED PERSON. If the Corporation
determines, in its discretion, that Employee or Employee's Beneficiary or
surviving spouse is under a legal disability or is incapacitated in any way so
as to be unable to manage his financial affairs, the Corporation shall make
payment to such person or to his legal representative or to a friend or relative
of such person as the Corporation considers advisable. Any payment under this
Section 11 shall be a complete discharge of any liability for the making of such
payment under this Appendix A. Nothing contained in this Section 11 however,
should be deemed to impose upon the Corporation any liability for paying a
benefit to any person who is under such a legal disability or is so
incapacitated unless it has received notice of such disability or incapacity
from a competent source.

12. NONASSIGNABILITY. Neither Employee nor any other person shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate, alienate or convey in advance of actual
receipt, the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are expressly declared to be, unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure, attachment, garnishment or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by Employee or any
other person, be transferable by operation of law in the event of Employee's or
any other person's bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise. The Corporation is authorized to
make any payments directed by court order.

13. CLAIM PROCEDURE.

13.1. Presentation of Claim. Employee, or the surviving spouse of Employee after
Employee's death, or Employee's Beneficiary (such Employee, surviving spouse, or
Beneficiary being referred to below as a "Claimant") may deliver to the
Corporation a written claim for a determination with respect to the amounts
distributable to such Claimant under this Appendix A. If such a claim relates to
the contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other claims
must be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.

                                       13
<PAGE>

13.2. Notification of Decision. The Corporation shall consider a Claimant's
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim. If the Corporation determines that special circumstances
require an extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of the
initial ninety (90) day period. In no event shall such extension exceed a period
of ninety (90) days from the end of the initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the
date by which the Corporation expects to render the benefit determination. The
Corporation shall notify the Claimant in writing:

      (a) that the Claimant's requested determination has been made, and that
      the claim has been allowed in full; or

      (b) that the Corporation has reached a conclusion contrary, in whole or in
      part, to the Claimant's requested determination, and such notice must set
      forth in a manner calculated to be understood by the Claimant:

            (i) the specific reason(s) for the denial of the claim, or any part
            of it;

            (ii) specific reference(s) to pertinent provisions of this Appendix
            A upon which such denial was based;

            (iii) a description of any additional material or information
            necessary for the Claimant to perfect the claim, and an explanation
            of why such material or information is necessary;

            (iv) an explanation of the claim review procedure set forth in
            Section 13.3 below; and

            (v) a statement of the Claimant's right to bring a civil action
            under ERISA Section 502(a) following an adverse benefit
            determination on review.

13.3. Review of a Denied Claim. On or before sixty (60) days after receiving a
notice from the Corporation that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file with the
Corporation a written request for a review of the denial of the claim. The
Claimant (or the Claimant's duly authorized representative):

      (a) may, upon request and free of charge, have reasonable access to, and
      copies of, all

                                       14
<PAGE>

      documents, records and other information relevant to the claim for
      benefits;

      (b) may submit written comments or other documents; and/or

      (c) may request a hearing, which the Corporation, in its sole discretion,
      may grant.

13.4. Decision on Review. The Corporation shall render its decision on review
promptly, and no later than sixty (60) days after the Corporation receives the
Claimant's written request for a review of the denial of the claim. If the
Corporation determines that special circumstances require an extension of time
for processing the claim, written notice of the extension shall be furnished to
the Claimant prior to the termination of the initial sixty (60) day period. In
no event shall such extension exceed a period of sixty (60) days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the
Corporation expects to render the benefit determination. In rendering its
decision, the Corporation shall take into account all comments, documents,
records and other information submitted by the Claimant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination. The decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:

      (a) specific reasons for the decision;

      (b) specific reference(s) to the pertinent provisions of this Appendix A
      upon which the decision was based;

      (c) a statement that the Claimant is entitled to receive, upon request and
      free of charge, reasonable access to and copies of, all documents, records
      and other information relevant (as defined in applicable ERISA
      regulations) to the Claimant's claim for benefits; and

      (d) a statement of the Claimant's right to bring a civil action under
      ERISA Section 502(a).

13.5. LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
this Article 13 is a mandatory prerequisite to a Claimant's right to commence
any legal action with respect to any claim for benefits under this Appendix A.

14. TAX WITHHOLDING AND REPORTING; SECTION 280G EXCISE TAXES.

                                       15
<PAGE>

(a) General. The Corporation shall have the right to deduct any required
withholding taxes from any payment made under this Appendix A. Except as
provided in Section 14(b), the Corporation shall not be obligated to pay or
reimburse Employee, or his surviving spouse or Beneficiary, for any income or
other taxes or penalties that may be imposed on such person by the Internal
Revenue Service or any state or other taxing authority as a result of benefits
paid under this Appendix A.

(b) Excise Tax Payment. In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code")), to Employee or for his benefit paid or payable or distributed or
distributable pursuant to the terms of this Employment Agreement (including this
Appendix A) or otherwise in connection with, or arising out of, his employment
with the Corporation or a Change in Control of the Corporation (a "Payment" or
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Employee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then Employee
will be entitled to immediately receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Employee of all taxes
(including any interest or penalties, other than interest and penalties imposed
by reason of Employee's failure to file timely a tax return or pay taxes shown
due on his return, imposed with respect to such taxes and the Excise Tax),
including any Excise Tax imposed upon the Gross-Up Payment, Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

15. SUCCESSORS. The provisions of this Appendix A shall bind and inure to the
benefit of the Corporation and its successors and assigns and Employee and
Employee's surviving spouse and designated beneficiaries.

16. AMENDMENT. This Appendix A may be amended only by written agreement between
Employee and the Corporation.

17. LEGEND

      The securities represented by this supplemental retirement benefit have
      not been registered under the Securities Act of 1933, as amended, and may
      not be sold, transferred or otherwise disposed of in the absence of an
      effective registration statement under such Act or an opinion of counsel
      satisfactory to the corporation to the effect that such registration is
      not required.

                                       16<PAGE>
                                                                    CONFIDENTIAL

                                                                    Exhibit 10.1

This Agreement is dated June 21, 2004 and is made between Antigenics
Therapeutics Limited having its registered offices at 25/28 North Wall Quay,
Dublin 1 Registered No. 381308 ("The Company") and Peter Thornton of Dublin,
Ireland ("Chief Financial Officer")

IT IS HEREBY AGREED as follows:

1.    EMPLOYMENT

      The Chief Financial Officer shall be employed by the Company under a Fixed
      Term Contract, and such employment shall be upon the terms and subject to
      the conditions hereinafter appearing.

2.    DUTIES AND RESPONSIBILITIES

2.1.  The Chief Financial Officer is hereby being employed to serve the Company
      as its Sr. Vice President and Chief Financial Officer, and shall perform
      the duties and be entitled to exercise the powers with respect to the
      Company, which are from time to time assigned to him or vested in him,
      whether or not such duties shall be of a nature normally performed by an
      employee holding the positions of the Sr. Vice President or the Chief
      Financial Officer. The Chief Financial Officer shall obey all lawful and
      reasonable directions of the Chairman and Chief Executive Officer of
      Antigenics Inc., a Delaware corporation and the parent corporation of the
      Company (the "Chairman"). The Chief Financial Officer shall report
      directly to and will keep the Chairman properly and fully informed (in
      writing if so requested) on a regular basis of his work and provide such
      explanations as may be required.

2.2.  Chief Financial Officer shall, for the remuneration detailed in clause 4,
      unless prevented by illness, devote the whole of his business time and
      attention to his duties, working such hours as may reasonably be required
      to perform his duties hereunder and shall well and faithfully serve and
      use his best endeavours to promote the interests of the Company at all
      times, and shall not knowingly do or omit to do, or permit or suffer
      anything to be done or omitted, to the prejudice, loss or injury of the
      Company.

2.3.  The Chief Financial Officer shall not directly or indirectly receive or
      give gifts, incentives or inducements from or to any person, company or
      firm in the carrying out of any activity in connection with the Company.

3.    DURATION

3.1.  The Chief Financial Officer's employment hereunder with the Company shall
      be for a fixed term and will expire on 1159pm (Easter Standard Time) of
      the day the Chief Financial Officer is granted the work authorization Visa
      H1-B, or such later date as the Company and the Chief Financial Officer
      may agree in writing (the "Employment Expiration"), subject always to the
      provisions for earlier termination hereinafter provided in this Agreement.
      Upon the Employment Expiration, the Chief Financial Officer will then
      relocate to the USA and the Employment Agreement attached in Schedule 1
      hereto will apply

                                       1
<PAGE>

                                                                    CONFIDENTIAL

      and be in substitution for this Agreement, which shall be deemed to be
      expired.

3.2.  The Unfair Dismissals Act 1977 - 2001 (as amended) shall not apply to a
      dismissal consisting only of the expiry of the fixed term of this
      Agreement without renewal hereof. In such circumstances, the Chief
      Financial Officer shall not be entitled to continued or alternative
      employment with the Company in any capacity.

4.    REMUNERATION

4.1.  During the term of the Chief Financial Officer's employment hereunder, the
      Company shall pay to the Chief Financial Officer a basic salary of
      $250,000.00 (United States dollars) per annum gross, payable monthly in
      arrear subject to such statutory and other deductions and the net sum
      shall be paid directly into the Chief Financial Officer's nominated bank
      account at the end of each calendar month.

4.2.  During the term of the Chief Financial Officer's employment hereunder, the
      Company shall reimburse the Chief Financial Officer for reasonable travel
      insurance premiums. Such travel insurance shall be maintained in the
      amounts customary for an individual who will be travelling internationally
      on a periodic basis.

4.3.  In the event of the Chief Financial Officer being absent by reason of
      sickness or injury from work or unable to perform his duty under this
      Agreement the Company's policy on sick leave pay will apply subject always
      to the terms and conditions of this Agreement.

5.    ANNUAL HOLIDAYS

5.1.  The Chief Financial Officer is entitled to 20 working days (and prorate
      for any lesser period) to be taken at times to be agreed with the
      Chairman. Public holiday entitlements are in addition to annual holidays.

6.    PLACE OF WORK AND RELOCATION

6.1.  The Employee shall not have a fixed or main place of work but will be
      required to perform his functions under this contract at a variety of
      locations both in Ireland and abroad. He may, on a regular basis, be
      required to attend meetings and undertake other business-related
      activities in such other countries as may from time to time be specified
      by the Company.

7.    CONFIDENTIALITY

7.1   The Chief Financial Officer shall be bound by the Company confidentiality
      policy (as from time to time amended) in all matters and shall not during
      his employment hereunder (save in the proper exercise of his duties) nor
      at any time thereafter utilise for his own purpose or divulge, publish,
      communicate or reveal to any person any information whatsoever concerning
      the business, organisation, finances, dealings, transactions, or affairs
      of the Company and shall use his best endeavours to prevent the disclosure
      of any publication of any such matters by others and shall keep with
      complete secrecy all confidential information entrusted to him, and shall
      not use or attempt to use any such information in any manner which may
      injure or cause loss either directly or indirectly to the Company or their
      businesses or may be likely to do so. For the avoidance of doubt it is
      agreed that the provisions of this

                                       2
<PAGE>

                                                                    CONFIDENTIAL

      clause do not apply to any information which is in the public domain
      through no act, neglect or default on the part of the Chief Financial
      Officer.

7.2   Unless otherwise agreed to by the Company, on the expiry of the fixed term
      of this Agreement or earlier termination of the Chief Financial Officer's
      employment, he shall deliver up to the Company all documents, papers,
      notes and other media of any description (including, without limitation
      computer programmes) in his possession or under his control which relate
      in any way to the affairs of the Company or to property in which the
      Company has an interest and shall not retain any copies thereof and the
      Chief Financial Officer's duties of confidentiality shall continue to
      apply after termination of employment.

7.3   The Company may provide the Chief Financial Officer with access to the
      internet and email systems for business use and the Chief Financial
      Officer shall be bound by the Company's internet usage policy, messages
      may be read by IT personnel and while internet activity may not be tracked
      on a continuous basis it may be monitored to ensure that this technology
      is not being used for personal or for other than business purposes save as
      may be allowed in accordance with the Company policy. When passwords are
      used the Company reserves the right to override these for the purposes of
      retrieving information and/or the monitoring of email and/or internet
      usage. When using Company computer systems the Chief Financial Officer is
      required to adhere to the Company's computer security policy and under no
      circumstances may he introduce his own software. The Chief Financial
      Officer may use software developed by the Company or provided by the
      developer to the Company. Copyright of all this software developed within
      the Company by staff or contractors is vested in the Company.

8.    CONFLICT OF INTERESTS

8.1.  During his employment hereunder the Chief Financial Officer shall not
      render advice or services whether solely or jointly with or as a director,
      manager, consultant or agent for any other person directly or indirectly
      carry on or be engaged or be concerned or interested in any activity,
      business, trade or calling other than in the course of his duties
      hereunder, without the prior written consent of the Company

9.    DATA PROTECTOIN

9.1.  The Company may from time to time in the course of administrating need to
      process both personal data (including, for example, any information from
      which you may be identified) any sensitive personal data (including, for
      example, information relating to health) in relation to the Chief
      Financial Officer. The Company will process such data with the then
      applicable data protection legislation. By signing this letter the Chief
      Financial Officer consents to the processing of personal data by the
      Company.

10.   COPYRIGHT

10.1. The Chief Financial Officer shall promptly disclose to the Company all
      copyright works or designs originated, conceived, written or made by him,
      whether alone or with others, relating to the Company provided that same
      originated or were conceived, written or made by him during the fixed term
      of his

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                                                                    CONFIDENTIAL

      employment and in the course of his work with the Company.

10.2. The Chief Financial Officer hereby assigns to the Company by way of future
      assignment all copyrights, design rights and other similar rights for the
      full terms thereof throughout the world arising in any works or material
      originated, conceived, written or made by him (except only those works or
      designs that the Company is satisfied originated or were conceived,
      written or made by him wholly outside his normal working hours which are
      wholly unconnected with the Company and/or his employment with the
      Company) during the period of his employment by the Company insofar as the
      rights in such works and material do not automatically vest in the Company
      as a result of the employment.

11.   INVENTIONS

11.1. If at any time during the Chief Financial Officer's employment he makes or
      discovers or participates in the discovery of any invention, secret
      process, operational procedure or any improvement upon or addition to any
      invention or any secret process or contrivance or design or appliance or
      method of operation or other intellectual property which is applicable to
      or in any way affects the business for the time being carried on by the
      Company the same will be immediately communicated by him to the Company
      and will, unless the Board otherwise resolves, be the absolute property of
      the Company and at the request and expense of the Company he will give and
      supply all such information, data and drawings as may be needed to enable
      the Company to exploit such invention, improvement or addition to the best
      advantage and will execute all such documents and do all such things as
      may be necessary or desirable for obtaining patent or similar protection
      for the same in such part or parts of the world as may be specified by the
      Company and for vesting the same in the Company.

11.2. The Chief Financial Officer hereby irrevocably appoints the Chairman to be
      his attorney in his name and on his behalf to execute documents, to use
      his name and to do all things which may be necessary or desirable for the
      Company to obtain for itself or its nominee the full benefits of the
      provisions of Clause 11.1 and a certificate in writing signed by any
      member of the Board of the Company that any instrument or act falls within
      the authority hereby conferred shall be conclusive evidence that such is
      the case so far as any third party is concerned.

11.3. The Chief Financial Officer will do nothing (whether by commission or
      omission) during his employment or at any time after the termination of
      his employment to affect or imperil the validity of any intellectual
      property rights obtained, applied for or to be applied for by the Company
      or its nominee. In particular, without limitation he will not disclose the
      subject matter of any invention which may be patentable before the Company
      has had an opportunity to apply for any patent or patents.

12.   PERFORMANCE

      The Chief Financial Officer's performance of his job duties and
      responsibilities with the Company will be reviewed regularly. In the
      course of such reviews the Company will discuss his performance and
      identify strengths and weaknesses. If the Company requires him to improve
      and/or make any adjustments in his performance, these will be communicated
      to him. Should he fail to make adequate improvements, the Company reserves
      the right to take all necessary steps including termination of his
      employment. The

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                                                                    CONFIDENTIAL

      steps involved in this review process shall be applied fairly and
      reasonably.

13.   GRIEVANCE PROCEDURE

In the event of any dispute or disagreement between the Chief Financial Officer
and the Company in relation to his employment, the Chief Financial Officer
should bring such dispute or disagreement to the attention of the Chairman or
the Vice President of Human Resources in instances where the dispute or
disagreement is with the Chairman, who will endeavour to resolve it.

14.   DISCIPLINARY PROCEDURE

      In the event of any disciplinary issue arising in relation to the Chief
      Financial Officer's conduct or performance during his employment it will
      be dealt with in the following manner:

14.1. the disciplinary issue will be investigated properly by such person or
      persons as the Chairman may nominate for such purpose and during any such
      investigation the Chief Financial Officer may be suspended on full pay
      pending its outcome;

14.2. any allegations made will be communicated to the Chief Financial Officer
      at or (as may be appropriate) prior to a specially convened disciplinary
      meeting and he will be given an opportunity to respond. The Chief
      Financial Officer will be entitled to be accompanied by a fellow staff
      member at that meeting;

14.3. following investigation the Company will decide whether any allegations
      made have been proven and if so what sanction to apply in the
      circumstances. For minor misconduct, sanctions may include a verbal
      warning or a written warning where appropriate. A verbal warning may be
      imposed by the Chairman without convening a disciplinary meeting. For more
      serious misconduct or if the Chief Financial Officer fails, following
      warnings, to improve his performance the Chairman may issue him with a
      final written warning, demote him or terminate his employment. If
      termination is considered to be the appropriate sanction, then this
      Agreement may be terminated in accordance with Clause 15;

14.4. the Chief Financial Officer may appeal against the sanction within five
      (5) days of notification thereof to the lead Director for the time being
      of the Board of the Company (who shall not have been involved in the
      disciplinary procedure prior to the appeal stage).

15.   TERMINATION

15.1  TERMINATION BY NOTICE

      Either party may terminate the Chief Financial Officer's employment
      hereunder at any time prior to the Employment Expiration by giving the
      other party sixty (60) days notice, or in the case of the Company where
      such termination is without cause and solely at the sole election of the
      Company, by the payment of twelve (12) months basic salary remuneration in
      lieu of notice.

15.2  The Chief Financial Officer agrees that the Company shall in the event of
      notice by the Chief Financial Officer be entitled in its absolute
      discretion to require the Chief Financial Officer not to attend at work
      and/or not to undertake all or any of his duties during any period of
      notice. However during the notice period the Chief Financial Officer will
      continue to be required to hold himself available to assist as may
      reasonably be required by the Company, for example, by answering any
      questions or dealing with other matters relating to the Chief Financial
      Officer's work. During the notice period the Company shall

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                                                                    CONFIDENTIAL

      continue to pay the Chief Financial Officer's basic salary and any
      relevant contractual benefits. The Chief Financial Officer will not be
      entitled to take up new employment until such time as the Chief Financial
      Officer's term of employment with the Company expires or terminates, in
      accordance with this agreement, unless otherwise mutually agreed in
      writing.

15.3  Where the Chief Financial Officer is incapacitated through accident, or
      ill health or otherwise from attending to his duties under the terms of
      this Agreement for a period of six (6) consecutive calendar months or
      more, the Company shall be entitled to terminate this Agreement by giving
      notice of termination (or pay in lieu of notice as aforesaid) in
      accordance with the provisions of this Agreement.

15.3  SUMMARY TERMINATION

      The Company may without notice and without any payment in lieu of notice
      terminate this Agreement with immediate effect if the Chief Financial
      Officer:

            15.3.1  is in serious default or wilful neglect of his duties under
                    this Agreement or commits any serious breach or
                    non-observance or continues (after warning) to commit
                    repeated breaches or non-observance of his obligations under
                    this Agreement, including (without limitation) material
                    failure after warnings to meet the performance levels set in
                    the scheme under the provisions of this Agreement or of any
                    rules and regulations made by the Company;

            15.3.2  commits any act of gross misconduct or serious default or is
                    guilty of any conduct which in the reasonable opinion of the
                    Company brings him, the Company or any of the Companies into
                    disrepute or affects the business of the Company;

            15.3.3  becomes bankrupt or makes any arrangement or composition
                    with his creditors generally; or

            15.3.4  is convicted of any criminal offence other than an offence,
                    under the Road Traffic Acts for which a penalty of
                    imprisonment is not imposed, and which in the reasonable
                    opinion of the Company does not affect his position as Chief
                    Financial Officer's of the Company.

      The Company shall be entitled to suspend the Chief Financial Officer with
      full pay pending the expeditious investigation of any of the matters
      referred to in this Clause.

16.   RECONSTRUCTION OR AMALGAMATION

      If before the expiry of the fixed term of this Agreement, or the expiry of
      any renewed term, the employment of the Chief Financial Officer hereunder
      shall terminate by reason of the liquidation of the Company for the
      purpose of reconstruction or amalgamation, or as part of any arrangement
      for the amalgamation or re-structuring of the undertaking of the Company
      not involving liquidation, the Chief Financial Officer shall be offered a
      suitable alternative position with the amalgamating or reconstructed
      Company for a period of not less than the then unexpired term of this
      Agreement, or the expiry of any renewed term, and on terms not less
      favourable than the terms and conditions of employment then applying.

                                       6
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                                                                    CONFIDENTIAL

17.   OBLIGATIONS FOLLOWING TERMINATION OF EMPLOYMENT

17.1  The Chief Financial Officer is likely to obtain, in the course of his
employment, confidential information and personal knowledge of and influence
over persons interacting with the Company. Therefore, the Chief Financial
Officer hereby agrees and covenants with the Company and without prejudice to
other restrictions imposed upon the Chief Financial Officer by law:

            17.1.1. that the Chief Financial Officer will not during the period
                    of six (6) months from the date on which his employment
                    terminates with the Company canvass or solicit or endeavour
                    to canvass or solicit (whether on his own account or for any
                    other person, company, firm or organisation) in competition
                    with the Company or with its Affiliates ("Affiliates"
                    defined as a party that directly or indirectly controls, or
                    is controlled by, or is under common control, with the party
                    specified) in the field of biotechnolgy or pharmaceutical
                    products, for the custom of any person, firm, company or
                    organisation who at any time during the last twelve (12)
                    months of his service with the Company was a customer of, or
                    in the habit of dealing with, the Company or its Affiliates
                    in the field of biotechnology and pharmaceutical products
                    for and with whom the Chief Financial Officer shall have
                    been personally involved;

            17.1.2. that the Chief Financial Officer will not during the period
                    of six (6) months from the date on which his employment
                    terminates with the Company either on his own behalf or for
                    any other person, company, firm or organisation, be employed
                    or engaged however with any person, business, organisation,
                    firm or company that competes with the Company or its
                    Affiliates in the field of biotechnology or pharmaceutical
                    products, in all or any of the Republic of Ireland, Northern
                    Ireland, England, Scotland or Wales;

            17.1.3. that the Chief Financial Officer will not during the period
                    of one (1) year from the date on which his employment
                    terminates with the Company either on his own behalf or for
                    any other person, company, firm or organisation solicit or
                    endeavour to entice away from the Company or its Affiliates
                    any person who was, to the Chief Financial Officer's
                    knowledge, at any time during the last twelve (12) months of
                    his service with the Company, a director, officer, manager,
                    employee or associate of such company who has specialised or
                    significant knowledge and skill and with whom the Chief
                    Financial Officer had dealings during the course of his
                    employment with the Company.

17.2. While the restrictions imposed in this Clause are considered by the
parties to be reasonable in all the circumstances, it is agreed that each of the
foregoing restrictions are separate and severable so that if any one or more of
such restrictions shall either taken by itself or themselves together be
adjudged by a court of competent jurisdiction to go beyond what is reasonable in
all the circumstances for the protection of the Company's legitimate interests,
but would be adjudged reasonable if any particular restriction or restrictions
were deleted or if any part or parts of the wording thereof were deleted,
restricted or limited in a particular manner then the said restrictions shall
apply with such deletions, restrictions or limitations as the case may be.

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                                                                    CONFIDENTIAL

18    NOTICE

18.1. Any notice or other communication given or made under this Agreement shall
be in writing and may be delivered to the relevant party or sent by pre-paid
registered post to the address of that party specified in this Agreement or such
other address as may be notified hereunder by that party from time to time for
this purpose and will be effective notwithstanding any change of address not so
notified.

18.2. Unless the contrary is proved, each such notice or communication will be
deemed to have been given or made and delivered (if by post) forty-eight (48)
hours after posting or (if by delivery) when left at the relevant address.

19.   MISCELLANEOUS

19.1. Headings are inserted for convenience only and do not affect the
      construction of this Agreement.

19.2. Words importing the singular include the plural and vice versa and words
      importing persons include corporations.

19.3. This Agreement supersedes all prior representations, arrangements,
      understandings and agreements between the parties hereto relating to the
      subject-matter hereof, and sets forth the entire, complete and exclusive
      agreement and understanding between the parties relating to the subject
      matter hereof, being a contract for a Chief Financial Officer of the
      Company. No party has relied on any representation, arrangement,
      understanding or agreement (whether written or oral) not expressly set out
      or referred to in this Agreement.

19.4. The references in this Agreement to an Act of Oireachtas shall be deemed
to include any statutory modification or re-enactment whenever made.

19.5. The expiration or the termination of this Agreement howsoever arising
shall not operate to effect such of the provisions hereof as, in accordance with
the terms thereof, are expressed to operate or have effect thereafter.

19.6.   This Agreement will be governed by and construed in accordance with the
laws of Ireland, including its rules as to the conflict of laws and is subject
to the exclusive jurisdiction of the Courts of the Republic of Ireland.

                                       8
<PAGE>

                                                                    CONFIDENTIAL

IN WITNESS whereof this Agreement has been entered into the day and year first
herein written:

Signed on behalf of the Company
in the presence of Peter Thornton

Signature    /s/ Garo Armen
             -----------------------

Title        Chairman and CEO

Signed by the Chief Financial Officer
in the presence of Garo Armen

Signature    /s/ P. Thornton
             -----------------------

Title        Chief Financial Officer

                                       9
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                                                                    CONFIDENTIAL

                                   SCHEDULE 1

1.    Employment Agreement

                                       10
<PAGE>
                                                                   CONFIDENTIAL

                                    AGREEMENT

      AGREEMENT made and entered into in New York, New York, by and between
Antigenics, Inc. (the "Company"), a Delaware corporation with a principal place
of business at 630 Fifth Ave. Suite 2100 New York, NY, and Peter Thornton of
Dublin, Ireland (the "Executive"), effective as of the 21st day of June, 2004
(the "Agreement").

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

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

      WHEREAS, the Executive is serving as the Senior Vice President and Chief
Financial Officer of Antigenics Therapeutics Ltd, a wholly owned subsidiary of
the Company, as per that certain agreement of even date herewith and, in such
capacity, has responsibilities that would generally be associated with the role
of Chief Financial Officer of the Company; and

      WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company therefore wishes to employ the Executive as its Senior Vice President &
Chief Financial Officer and the Executive wishes to accept such employment;

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

      1.    Employment. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts employment
commencing on 12:00 am (Eastern Standard Time) on the day after the Executive is
granted the work authorization Visa H1-B, or such later date as the Company and
the Executive may agree in writing (the "Start Date").

      2.    Term. Subject to earlier termination as hereafter provided, this
Agreement shall have an original term of one year commencing on the effective
date hereof and shall be automatically extended thereafter for successive terms
of one year each, unless either party provides notice to the other at least
ninety (90) days prior to the expiration of the original or any extension term
that the Agreement is not to be extended. The term of this Agreement, as from
time to time extended or renewed, is hereafter referred to as "the term of this
Agreement" or "the term hereof".

      3.    Capacity and Performance.

            (a)   Commencing on the Start Date and continuing thereafter during
the term hereof, the Executive shall serve the Company as its Senior Vice
President & Chief Financial Officer and shall report to the Chief Executive
Officer. In addition, and without further compensation, the Executive shall
serve as a director and/or officer of one or more of the Company's Affiliates if
so elected or appointed from time to time.

<PAGE>

            (b)   Commencing on the Start Date and continuing thereafter during
the term hereof, the Executive shall be employed by the Company on a full-time
basis and shall perform such duties and responsibilities on behalf of the
Company and its Affiliates as may be designated from time to time consistent
with his position as Senior Vice President & Chief Financial Officer.

            (c)   Commencing on the Start Date and continuing thereafter during
the term hereof, the Executive shall devote his best efforts, business judgment,
skill and knowledge to the advancement of the business and interests of the
Company and its Affiliates and to the discharge of his duties and
responsibilities hereunder. The Executive shall not engage in any other business
activity or serve in any industry, trade, professional, governmental or academic
position during the term of this Agreement, except as may be approved by the
Board of Directors of the Company (the "Board") or its designee.

      4.    Compensation and Benefits. As compensation for all services
performed by the Executive commencing on the Start Date and continuing
thereafter under and during the term hereof and subject to performance of the
Executive's duties and of the obligations of the Executive to the Company and
its Affiliates, pursuant to this Agreement or otherwise:

            (a)   Base Salary. Commencing on the Start Date and continuing
thereafter during the term hereof, the Company shall pay the Executive a minimum
base salary at the rate of Two Hundred and Fifty Thousand Dollars ($250,000
United States dollars) per annum, payable in accordance with the payroll
practices of the Company for its executives and subject to increase by the
Board, in its sole discretion. Such base salary, as from time to time increased,
is hereafter referred to as the "Base Salary". The Board shall review the Base
Salary no less than annually.

            (b)   Incentive and Bonus Compensation. Commencing on the Start Date
and continuing thereafter during the term hereof, the Executive shall be
entitled to participate in the Company's Executive Incentive Plan, in accordance
with the terms thereof, as such terms may be modified or amended by the Company
from time to time; provided, however, that nothing contained herein shall
obligate the Company to continue such incentive compensation program. The
Executive's target incentive bonus under the Executive Incentive Plan is 40% of
his Base Salary. Such target may be modified by the Company from time to time,
in its sole discretion. Any compensation paid to the Executive under the
Executive Incentive Plan shall be in addition to the Base Salary. The Company
will provide the Executive with notice of any modifications or amendments to the
Executive Incentive Plan that materially affect his incentive compensation.

            (c)   Stock Options. Upon Executive's commencement of employment
pursuant to Section 1 hereunder, Executive shall be granted an option to
purchase 125,000 shares of common stock of the Company (the "Option Grant"). At
the discretion of the Compensation Committee of the Board, the Executive may be
granted additional options to purchase shares of stock of the Company in the
future. Any such grants, including without limitation the Option Grant, shall be
governed by the terms of the applicable Company stock option plan, as amended
from time to time, and any stock option certificate, stock option agreement, and
other restrictions generally applicable to Company stock options.

                                      -2-
<PAGE>

            (d)   Vacations. Commencing on the Start Date and continuing
thereafter during the term hereof, the Executive shall be entitled to four (4)
weeks of vacation per annum, to be taken at such times and intervals as shall be
determined by the Executive, subject to the reasonable business needs of the
Company.

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

            (f)   Business Expenses. Commencing on the Start Date and continuing
thereafter during the term hereof, the Company shall pay or reimburse the
Executive for all reasonable, customary and necessary business expenses incurred
or paid by the Executive in the performance of his duties and responsibilities
hereunder, subject to any maximum annual limit and other restrictions on such
expenses as set forth in the Company's Travel Policy as may be amended from time
to time, and to such reasonable substantiation and documentation as may be
specified by the Company from time to time.

            (g)   Sign-On Bonus. Upon Executive's commencement of employment
pursuant to Section 1 hereunder, the Company shall pay the Executive a sign-on
bonus of Fifty Thousand Dollars ($50,000 United States dollars). In the event
that the Executive terminates his employment for any reason within nine (9)
months of the Start Date, the Executive shall repay to the Company the entire
sign-on bonus and agrees that such repayment may be set off against any money
owed to the Executive at the time his employment terminates.

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

            (a)   Death. In the event of the Executive's death during the term
hereof, the Executive's employment hereunder shall immediately and automatically
terminate. In the event of the Executive's death after the Start Date and during
the term hereof, the Company shall pay to the Executive's designated beneficiary
or, if no beneficiary has been designated by the Executive, to his estate, any
earned and unpaid Base Salary and accrued but unused vacation through the date
of his death.

            (b)   Disability.

                  (i)   The Company may terminate the Executive's employment
      hereunder, upon notice to the Executive, in the event that the Executive
      becomes disabled

                                      -3-
<PAGE>

      during his employment hereunder through any illness, injury, accident or
      condition of either a physical or psychological nature and, as a result,
      is unable to perform substantially all of his duties and responsibilities
      hereunder, with a reasonable accommodation, for ninety (90) days during
      any period of three hundred and sixty-five (365) consecutive calendar
      days.

                  (ii)  The Board may designate another employee to act in the
      Executive's place during any period of the Executive's disability.
      Notwithstanding any such designation, the Executive shall continue to
      receive the Base Salary in accordance with Section 4.a and benefits in
      accordance with Section 4.e, to the extent permitted by the then-current
      terms of the applicable benefit plans, until the Executive becomes
      eligible for disability income benefits under the Company's disability
      income plan or until the termination of his employment, whichever shall
      first occur.

                  (iii) While receiving disability income payments under the
      Company's disability income plan, the Executive shall not be entitled to
      receive any Base Salary under Section 4.a hereof, but shall continue to
      participate in Company benefit plans in accordance with Section 4.e and
      the terms of such plans, until the termination of his employment.

                  (iv)  If any question shall arise as to whether during any
      period commencing on the Start Date and continuing thereafter during the
      term hereof, the Executive is disabled through any illness, injury,
      accident or condition of either a physical or psychological nature so as
      to be unable to perform substantially all of his duties and
      responsibilities hereunder, the Executive may, and at the request of the
      Company shall, submit to a medical examination by a physician selected by
      the Company to whom the Executive or his duly appointed guardian, if any,
      has no reasonable objection to determine whether the Executive is so
      disabled and such determination shall for the purposes of this Agreement
      be conclusive of the issue. If such question shall arise and the Executive
      shall fail to submit to such medical examination, the Company's
      determination of the issue shall be binding on the Executive.

                  (v)   In the event the Company terminates the Executive's
      employment hereunder due to disability, the Company shall pay to the
      Executive any accrued and unpaid Base Salary and accrued but unused
      vacation through the date of termination and shall also provide the
      Relocation Benefit (as hereafter defined).

            (c)   By the Company for Cause. The Company may terminate the
Executive's employment hereunder for Cause at any time upon fourteen (14) day
notice to the Executive setting forth in reasonable detail the nature of such
Cause. The following, as determined by the Company in its reasonable judgment,
shall constitute Cause for termination:

                  (i)   The Executive's material failure to perform (other than
      by reason of disability), or material negligence in the performance of,
      his duties and responsibilities to the Company or any of its Affiliates,
      which failure or neglect, if susceptible to cure,

                                      -4-
<PAGE>

      remains uncured or continues to recur after notice from the Company
      specifying in reasonable detail the nature of such failure or neglect; or

                  (ii)  Material breach by the Executive of any provision of
      this Agreement; or

                  (iii) Other conduct by the Executive that is materially
      harmful to the business, interests or reputation of the Company or any of
      its Affiliates.

      Upon the giving of notice of termination of the Executive's employment
hereunder for Cause, the Company shall have no further obligation or liability
to the Executive, other than for Base Salary earned and unpaid and accrued
vacation earned but not taken at the date of termination.

            (d)   By the Company Other than for Cause. The Company may terminate
the Executive's employment hereunder other than for Cause at any time upon
notice to the Executive. In the event of such termination after the Start Date,
the Company shall pay the Executive the higher of (i) benefits payable under an
executive severance plan, if such a plan is in place on the date of termination
and if the Executive is eligible for such benefits under such a plan or (ii)
continue to pay the Executive his Base Salary, at the rate in effect on the date
of termination, until the conclusion of a period of twelve (12) months following
the date of termination. In addition, until the conclusion of a period of twelve
(12) months following the date of termination (if such termination is after the
Start Date), the Company shall (A) continue to make payments to the Executive
under the Executive Incentive Plan; and, (B) pay the full premium cost of the
Executive's participation in the Company's group medical and dental insurance
plans, provided that the Executive is entitled to continue such participation
under applicable law and plan terms. The payment(s) described in subparagraph
(A) shall be equal to the higher of (x) the Executive's target incentive bonus
or (y) the actual incentive bonus paid to the Executive, if any, under the
Executive Incentive Plan for the last full fiscal year preceding the year in
which the Executive's employment is terminated, and shall be pro-rated for any
period less than a full year. The Company will also provide the Executive with
outplacement assistance through a firm of its choice at a cost not to exceed
$15,000.00. In addition, if within twelve (12) months following such
termination, the Executive relocates from the State of New York back to Ireland,
the Company shall pay for all reasonable relocation expenses, as determined by
the Company, associated with such relocation (the "Relocation Benefit").
Furthermore, at the sole discretion of the Compensation Committee of the Board,
any unvested options to purchase Company stock may be accelerated.

            (e)   By the Executive for Good Reason. The Executive may terminate
his employment hereunder for Good Reason, upon notice to the Company setting
forth in reasonable detail the nature of such Good Reason. The following shall
constitute Good Reason for termination by the Executive:

                  (i)   Failure of the Company to continue the Executive in the
      position of Senior Vice President & Chief Financial Officer; or

                                      -5-
<PAGE>

                  (ii)  Material and substantial diminution in the nature or
      scope of the Executive's responsibilities, duties or authority; however,
      the Company's failure to continue the Executive's appointment or election
      as a director or officer of any of its Affiliates and any diminution of
      the business of the Company or any of its Affiliates, including without
      limitation the sale or transfer of any or all of the assets of the Company
      or any of its Affiliates, shall not constitute "Good Reason"; or

                  (iii) Material reduction in Base Salary or benefits due in
      accordance with the terms of this Agreement.

In the event of termination in accordance with this Section 5.e after the Start
Date, the Company shall pay the Executive the higher of (i) benefits payable
under an executive severance plan, if such a plan is in place on the date of
termination and if the Executive is eligible for such benefits under such a plan
or (ii) continue to pay the Executive his Base Salary, at the rate in effect on
the date of termination, until the conclusion of a period of twelve (12) months
following the date of termination. In addition, until the conclusion of a period
of twelve (12) months following the date of termination, the Company shall (A)
continue to make payments to the Executive under the Executive Incentive Plan;
and, (B) pay the full premium cost of the Executive's participation in the
Company's group medical and dental insurance plans, provided that the Executive
is entitled to continue such participation under applicable law and plan terms.
The payment(s) described in subparagraph (A) above shall be equal to the higher
of (x) the Executive's target incentive bonus or (y) the actual incentive bonus
paid to the Executive, if any, under the Executive Incentive Plan for the last
full fiscal year preceding the year in which the Executive's employment is
terminated, and shall be pro-rated for any period less than a full year. The
Company will also provide the Executive with outplacement assistance through a
firm of its choice at a cost not to exceed $15,000.00 and will provide the
Relocation Benefit. In addition, at the sole discretion of the Compensation
Committee of the Board, any unvested options to purchase Company stock may be
accelerated.

            (f)   By the Executive Other than for Good Reason. The Executive may
terminate his employment hereunder at any time upon sixty (60) days' notice to
the Company, unless such termination would violate any obligation of the
Executive to the Company under a separate severance agreement. In the event of
termination of the Executive pursuant to this Section 5.f after the Start Date,
the Board may elect to waive the period of notice, or any portion thereof, and,
if the Board so elects, the Company will pay the Executive his Base Salary for
the notice period (or for any remaining portion of the period).

            (g)   Upon a Change of Control.

                  (i)   If a Change of Control occurs, on the date of such
      Change in Control, fifty-percent (50%) of any outstanding unvested stock
      options granted to the Executive as of that date shall become vested and
      exercisable, provided that the Executive is employed by the Company on the
      date of such Change in Control.

                  (ii)  If a Change of Control occurs after the Start Date and,
      within eighteen (18) months following such Change of Control, the Company
      terminates the

                                      -6-
<PAGE>

      Executive's employment other than for Cause, or the Executive terminates
      his employment for Good Reason, then, in lieu of any payments to or on
      behalf of the Executive under Section 5.d or 5.e hereof, the Company
      shall, until the conclusion of a period of eighteen (18) months following
      the date of termination: (A) continue to pay the Executive the Base Salary
      at the rate in effect on the date of termination; (B) continue to make
      payments to the Executive under the Executive Incentive Plan; and, (C) pay
      the full premium cost of the Executive's participation in the Company's
      group medical and dental insurance plans, provided that the Executive is
      entitled to continue such participation under applicable law and plan
      terms. The payment(s) described in subparagraph (B) above shall be equal
      to the higher of (x) the Executive's target incentive bonus or (y) the
      actual incentive bonus paid to the Executive, if any, under the Executive
      Incentive Plan for the last full fiscal year preceding the year in which
      the Executive's employment is terminated, and shall be pro-rated for any
      period less than a full year. The Executive may at his option request the
      Company to make any payments due under (A) or (B) in one-lump sum at date
      of termination. In addition, in the event the Change of Control occurs
      after the Start Date, any outstanding unvested options granted to the
      Executive as of the date of the Change in Control shall become vested and
      shall be exercisable for ninety (90) days following termination of the
      Executive's employment, and the Company will provide the Executive with
      outplacement assistance through a firm of its choice at a cost not to
      exceed $15,000.00 and will provide the Relocation Benefit. For the purpose
      of this Section 5.g alone, in addition to the definition provided in
      Section 5.e, Good Reason shall also mean the relocation of the Executive's
      principal office, without his prior consent, to a location more than
      thirty (30) miles from its location on the day prior to the Change in
      Control.

                  (iii) All payments required to be made by the Company
      hereunder to Executive or his dependents, beneficiaries, or estate will be
      subject to the withholding of such amounts relating to tax and/or other
      payroll deductions as may be required by law.

                  In the event that it is determined that any payment or benefit
      provided by the Company to or for the benefit of Executive, either under
      this Agreement or otherwise, will be subject to the excise tax imposed by
      Section 4999 of the Internal Revenue Code or any successor provision(s)
      ("Section 4999"), the Company will, prior to the date on which any amount
      of the excise tax must be paid or withheld, make an additional lump-sum
      payment (the "Gross-up Payment") to Executive in an amount sufficient,
      after giving effect to all federal, state and other taxes and charges
      (including interest and penalties, if any) with respect to the gross-up
      payment, to make Executive whole for all taxes (including withholding
      taxes) and any associated interest and penalties, imposed under or as a
      result of Section 4999.

                  Determinations under this Section 5.g.iii will be made by an
      accounting firm engaged by the Company (the "Firm"). The determinations of
      the Firm will be binding upon the Company and Executive except as the
      determinations are established in resolution (including by settlement) of
      a controversy with the Internal Revenue Service to have been incorrect.
      All fees and expenses of the Firm will be paid by the Company.

                                      -7-
<PAGE>

                  If the Internal Revenue Service asserts a claim that, if
      successful, would require the Company to make a Gross-up Payment or an
      additional Gross-up Payment, the Company and Executive will cooperate
      fully in resolving the controversy with the Internal Revenue Service. The
      Company will make or advance such Gross-up Payments as are necessary to
      prevent Executive from having to bear the cost of payments made to the
      Internal Revenue Service in the course of, or as a result of, the
      controversy. The Firm will determine the amount of such Gross-up Payments
      or advances and will determine after final resolution of the controversy
      whether any advances must be returned by Executive to the Company. The
      Company will bear all expenses of the controversy and will gross Executive
      up for any additional taxes that may be imposed upon Executive as a result
      of its payment of such expenses.

            (iv)  For the purpose of this Section 5.g, a "Change in Control"
      shall mean: (A) the acquisition by any Organization of beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act) of 50% or more of the common stock of the Company; provided, however,
      that for purposes of this subsection (A), an acquisition shall not
      constitute a Change in Control if it is: (x) by a Benefit Plan sponsored
      or maintained by the Company or an entity controlled by the Company or (y)
      by an entity pursuant to a transaction that complies with clauses (x), (y)
      and (z) of subsection (C) of this Section 5(g)(iv); or (B) individuals
      who, as of May 1, 2004, constitute the Board (the "Incumbent Board") cease
      for any reason to constitute at least a majority of the Board; provided,
      however, that any individual becoming a director subsequent to May 1, 2004
      whose election, or nomination for election by the Company's stockholders,
      was approved by a vote of at least a majority of the directors then
      comprising the Incumbent Board (or a majority of the members of a
      nominating committee who are members of the Incumbent Board) shall be
      treated as a member of the Incumbent Board unless he or she assumed office
      as a result of an actual or threatened election contest with respect to
      the election or removal of directors or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Organization
      other than the Board; or (C) consummation of a merger or consolidation
      involving the Company, or a sale or other disposition of all or
      substantially all of the assets of the Company, (a "transaction") in each
      case unless, immediately following such transaction, (x) the beneficial
      owners of the common stock of the Company outstanding immediately prior to
      such transaction beneficially own, directly or indirectly, more than 50%
      of the combined voting power of the outstanding voting securities of the
      entity resulting from such transaction (including, without limitation, an
      entity which as a result of such transaction owns the Company or all or
      substantially all of the Company's assets either directly or through one
      or more subsidiaries), (y) no Organization (excluding any entity resulting
      from such transaction or any Benefit Plan of the Company or such entity
      resulting from such transaction) beneficially owns, directly or
      indirectly, 50% or more of the combined voting power of the then
      outstanding voting securities of such entity and (z) at least a majority
      of the members of the board of directors or similar board of the entity
      resulting from such transaction were members of the Incumbent Board at the
      time of the execution of the initial agreement, or of the action of the
      Board, providing for such transaction; or (D) approval by the stockholders
      of the Company of a complete liquidation or dissolution of the Company.
      For purposes of the foregoing: "Benefit Plan" means any employee benefit
      plan, including any related trust;

                                      -8-
<PAGE>

      "Board" means the Board of Directors of the Company; "Exchange Act" means
      the Securities Exchange Act of 1934, as amended; and "Organization" means
      any individual, entity or group (within the meaning of Section 13(d)(3) or
      Section 14(d)(2) of the Exchange Act).

            (h)   Effect of Failure to Renew by Company. In the event the
Company chooses not to renew the term hereof, such failure to renew shall be
treated as a termination by the Company other than for "Cause" unless the
Company gives notice that the failure to renew is for "Cause" as defined in
Section 5.c.

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

            (a)   Payment(s) by the Company and contributions to the cost of the
Executive's continued participation in the Company's group health and dental
plans that may be due the Executive in each case under the applicable
termination provision of Section 5 shall constitute the entire obligation of the
Company to the Executive. In order to receive any payments, benefits
continuation, accelerated vesting of stock options or any other benefits under
Section 5.b or 5.d or 5.e or 5.g or 5.h, the Executive must first execute a
General Release of Claims in a form acceptable to the Company.

            (b)   Except for medical and dental insurance coverage continued
pursuant to Section 5.d or 5.e or 5.g or 5.h hereof, benefits shall terminate
pursuant to the terms of the applicable benefit plans based on the date of
termination of the Executive's employment without regard to any continuation of
Base Salary or other payment to the Executive following such date of
termination.

            (c)   Provisions of this Agreement shall survive any termination if
so provided herein or if necessary or desirable fully to accomplish the purposes
of such provision, including without limitation the obligations of the Executive
under Sections 7, 8 and 9 hereof. The obligation of the Company to make payments
to or on behalf of the Executive under Section 5.d or 5.e or 5.g or 5.h hereof
is expressly conditioned upon the Executive's continued full performance of
obligations under Sections 7, 8 and 9 hereof. The Executive recognizes that,
except as expressly provided in Section 5.d or 5.e or 5.g or 5.h, no
compensation is earned after termination of employment.

      7.    Confidential Information.

            (a)   The Executive acknowledges that the Company and its Affiliates
continually develop Confidential Information, that the Executive may develop
Confidential Information for the Company or its Affiliates and that the
Executive may learn of Confidential Information during the course of employment.
The Executive will comply with the policies and procedures of the Company and
its Affiliates for protecting Confidential Information and shall never disclose
to any Person or to any governmental agency or political subdivision of any
government (except as required by applicable law or for the proper performance
of his duties and responsibilities to the Company and its Affiliates), or use
for his own benefit or gain, any

                                      -9-
<PAGE>

Confidential Information obtained by the Executive incident to his employment or
other association with the Company or any of its Affiliates. The Executive
understands that this restriction shall continue to apply after his employment
terminates, regardless of the reason for such termination.

            (b)   All documents, records, tapes and other media of every kind
and description relating to the business, present or otherwise, of the Company
or its Affiliates and any copies, in whole or in part, thereof (the
"Documents"), whether or not prepared by the Executive, shall be the sole and
exclusive property of the Company and its Affiliates. The Executive shall
safeguard all Documents and shall surrender to the Company at the time his
employment terminates, or at such earlier time or times as the Board or its
designee may specify, all Documents then in the Executive's possession or
control.

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

            (a)   Commencing on the effective date of this Agreement and
continuing for the greater of (i) twelve (12) months after his employment with
the Company terminates (or in the event that said employment does not commence,
then 12 months after his employment with Antigenics Therapeutics Ltd.
terminates) or (ii) the period during which the Executive is receiving payments
under Section 5.d or 5.e or 5.g or 5.h (the "Non-Competition Period"), the
Executive shall not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, co-venturer or otherwise, compete with
the Company or any of its Affiliates or undertake any planning for any business
competitive with the Company or any of its Affiliates. Specifically, but without
limiting the foregoing, the Executive agrees not to engage in any manner in any
activity that is directly or indirectly competitive with the business of the
Company or any of its Affiliates as conducted or under consideration at any time
during the Executive's employment. For the purposes of this Section 8, the
business of the Company and its Affiliates shall include all Products and the
Executive's undertaking shall encompass all items, products and services that
may be used in substitution for Products. The foregoing shall not prohibit the
Executive's passive ownership of two percent (2%) or less of the equity
securities of any publicly traded company.

            (b)   The Executive agrees that, during his employment with the
Company or any Affiliate of the Company, he will not undertake any outside
activity, whether or not competitive with the business of the Company or its
Affiliates, that could reasonably give rise to a conflict of interest or
otherwise interfere with his duties and obligations to the Company or any of its
Affiliates.

            (c)   The Executive further agrees that while he is employed by the
Company or any Affiliate of the Company and thereafter during the remainder of
the Non-Competition Period, the Executive will not solicit for the purpose of
hiring or direct or encourage anyone else to solicit for the purpose of hiring
any employee of the Company or any of its Affiliates, directly assist in such
hiring by any Person, or solicit or encourage any customer or vendor of the
Company or any of its Affiliates to terminate its relationship with them, or, in
the case of a

                                      -10-
<PAGE>

customer, to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its Affiliates.

      9.    Assignment of Rights to Intellectual Property. The Executive shall
promptly and fully disclose, if he has not done so already, all Intellectual
Property to the Company. The Executive hereby assigns and agrees to assign to
the Company (or as otherwise directed by the Company) the Executive's full
right, title and interest in and to all Intellectual Property. The Executive
agrees to execute any and all applications for domestic and foreign patents,
copyrights or other proprietary rights and to do such other acts (including
without limitation the execution and delivery of instruments of further
assurance or confirmation) requested by the Company to assign the Intellectual
Property to the Company and to permit the Company to enforce any patents,
copyrights or other proprietary rights to the Intellectual Property. The
Executive will not charge the Company for time spent in complying with these
obligations; provided, however, that after the Executive's employment
terminates, the Company will reimburse the Executive for reasonable expenses
incurred in complying with his obligations under this Section 9. All
copyrightable works that the Executive creates shall be considered "work made
for hire". After the Executive's employment terminates, he shall not be required
to devote more than forty (40) hours per calendar year to support the Company in
any activities required under this Section 9.

                                      -11-
<PAGE>

      10.   Notification Requirement. Until the conclusion of the term of this
Agreement, the Executive shall give notice to the Company of each new business
activity he plans to undertake, at least twenty-one (21) days prior to beginning
any such activity. During the time period between the conclusion of the term of
this Agreement and the Non-Competition Period, the Executive shall give notice
to the Company of each new potentially competitive business activity he plans to
undertake. Such notice shall state the name and address of the Person for whom
such activity is undertaken and the nature of the Executive's business
relationship(s) and position(s) with such Person. Provided that doing so would
not violate any contractual commitment of the Executive, the Executive shall
provide the Company with such other pertinent information concerning such
business activity as the Company may reasonably request in order to determine
the Executive's continued compliance with his obligations under Sections 7, 8
and 9 hereof.

      11.   Enforcement of Covenants. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7 and 8 hereof.
The Executive agrees that said restraints are necessary for the reasonable and
proper protection of the Company and its Affiliates and that each and every one
of the restraints is reasonable in respect to subject matter, length of time and
geographic area. The Executive further acknowledges that, were he to breach any
of the covenants contained in Sections 7 or 8 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company, in
addition to any other remedies available to it, shall be entitled to preliminary
and permanent injunctive relief against any breach or threatened breach by the
Executive of any of said covenants, without having to post bond. The parties
further agree that, in the event that any provision of Section 7 or 8 hereof
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.

      12.   Conflicting Agreements. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound and that the Executive is not now subject
to any covenants against competition or similar covenants that would affect the
performance of his obligations hereunder. The Executive will not disclose to or
use on behalf of the Company any proprietary information of a third party
without such party's consent.

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

      14.   Definitions. Words or phrases which are initially capitalized or are
within quotation marks shall have the meanings provided in this Section 14 and
as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:

            (a)   "Affiliates" means all persons and entities directly or
indirectly

                                      -12-
<PAGE>

controlling, controlled by or under common control with the Company, where
control may be by either management authority or equity interest.

            (b)   "Confidential Information" means any and all information of
the Company and its Affiliates that is not generally known by others.
Confidential Information includes without limitation such information relating
to (i) the development, research, testing, manufacturing, marketing and
financial activities of the Company and its Affiliates, (ii) the Products, (iii)
the costs, sources of supply, financial performance and strategic plans of the
Company and its Affiliates, (iv) the identity and special needs of the customers
of the Company and its Affiliates and (v) the people and organizations with whom
the Company and its Affiliates have business relationships and those
relationships. Confidential Information also includes comparable information
that the Company or any of its Affiliates have received belonging to others or
which was received by the Company or any of its Affiliates with any
understanding that it would not be disclosed. Confidential Information excludes
information which is in the public domain as of the Effective Date, or which
lawfully enters the public domain during the term of this Agreement through no
fault of the Executive or any other party with an obligation of confidentiality
with respect to such information.

            (c)   "Intellectual Property" means inventions, discoveries,
developments, methods, processes, compositions, works, concepts and ideas
(whether or not patentable or copyrightable or constituting trade secrets)
conceived, made, created, developed or reduced to practice by the Executive
(whether alone or with others, whether or not during normal business hours or on
or off Company premises) during the Executive's employment and during the period
of twelve (12) months immediately following termination of his/her employment
that relate to either the Products or any prospective activity of the Company or
any of its Affiliates.

            (d)   "Person" means an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization, other than
the Company or any of its Affiliates.

            (e)   "Products" mean all products planned, researched, developed,
under development, tested, manufactured, sold, licensed, leased or otherwise
distributed or put into use by the Company or any of its Affiliates, together
with all services provided or planned by the Company or any of its Affiliates,
during the Executive's employment.

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

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

                                      -13-
<PAGE>

their respective successors, executors, administrators, heirs and permitted
assigns.

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

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

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

      20.   Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment, excluding the relocation benefits provided to you as
described in the May 24, 2004 letter from John Cerio.

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

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

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

      24.   Governing Law. This is a contract and shall be construed and
enforced under and be governed in all respects by the laws of the Commonwealth
of Massachusetts, without regard to the conflict of laws principles thereof.

                                      -14-
<PAGE>

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

THE EXECUTIVE:                      ANTIGENICS INC.

/s/ P. Thornton                     By: /s/ Garo Armen
-------------------------               -------------------------------

                                    Title: Chairman and CEO

                                      -15-

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