Document:

Exhibit 10.2

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this
6 day of January, 2009 (the “Effective Date”), between Thomas
Davis, MD (the “Executive”) and CELLDEX THERAPEUTICS, INC., a
Delaware corporation (the “Company”) (collectively, the Executive and the
Company shall be referred to as the “Parties”). 
In consideration of the mutual promises and agreements contained herein,
the Parties agree as follows:

 

1.                                      PURPOSE.  The Company desires to avail itself of the
services of the Executive as Senior Vice President and
Chief Medical Officer, and the Executive desires to provide such
services in accordance with the terms of this Agreement.  The Parties agree that the duties and
obligations expected of the Executive and of the Company are as set forth in
this Agreement.

 

2.                                      EFFECTIVE
DATE AND TERM.  This Agreement shall
be effective, and its term (the “Term”) shall commence as of the Effective
Date.  The Term shall continue through
and until December 31, 2011 (the “Initial Term”), unless terminated sooner
as provided by this Agreement or extended by the Parties.  The Term shall be automatically renewed for
successive periods of one year each (each, a “Renewal Term”), unless either
Party gives to the other written notice of intent not to renew at least ninety
(90) days prior to the expiration of the Initial Term or any Renewal Term (a “Notice
of Non-Renewal”).

 

3.                                      COMPENSATION.

 

A.                                    Salary.  During the Term, the Company shall pay or
cause to be paid to the Executive, in installments pursuant to the Company’s
payroll practices as in effect from time to time, a base salary of $362,400 per annum or such greater amount as may from time
to time be determined by the Board of Directors or the Compensation Committee
thereof (the “Board”) of the Company (the “Base Salary”).  The Base Salary shall be reviewed annually in
accordance with the Company’s compensation and review policies and, in the sole
discretion of the Board, may be increased.

 

B.                                    Annual Bonus.  With respect to each fiscal year of the
Company that ends during the Term, the Executive shall be eligible to receive
an annual bonus (the “Discretionary Bonus”) based upon the Executive’s overall
performance of the Services on behalf of the Company during such fiscal year,
and/or based upon the Company’s attainment of pre-established goals relating to
such fiscal year (which if applicable, will be determined by the Chief
Executive Officer (“CEO”) of the Company and the Board and communicated to the
Executive within 30 days following the beginning of the applicable fiscal
year).  Commencing with fiscal year 2009,
the CEO and the Board shall determine a target amount for the Discretionary
Bonus and communicate that to the Executive prior to February 1 of the
bonus year.  The attainment of any
applicable performance goals and the amount to be paid in respect of the
Discretionary Bonus shall be determined by the CEO or the Board in good faith
and in accordance with such written goals and policies as may be established
from time to time by the Board and the CEO. 
The Discretionary Bonus, if any, shall be payable as a lump-sum payment
within sixty (60) days immediately following the last day of the applicable
fiscal year.

 

 

C.                                    Expenses.  The Company shall reimburse the Executive for
any travel, hotel, entertainment and other expenses reasonably incurred by the
Executive in furtherance of the Executive’s duties under this Agreement subject
to and in accordance with the Company’s applicable travel and expense
reimbursement policies.

 

D.                                    Employee
Benefits.  The Executive shall be
entitled to participate in any and all employee benefit plans in effect from
time to time that are provided generally to employees of the Company, and in
any executive perquisite programs in effect from time to time that provide
benefits to other executives of the Company of comparable stature and with
comparable duties and responsibilities. 
During the Term, the Company shall acquire and pay for, or reimburse the
Executive for, hospitalization, dental, major medical, or other health
insurance for the benefit of the Executive and his dependents at least equal to
that generally provided other executive employees under the Company’s group
health insurance plan(s).  The Executive
shall, during the Term, be entitled to paid time off in accordance with
applicable Company policies in effect from time to time, in addition to public
holidays observed by the Company.  The
Executive shall be entitled to twenty (20) business days of vacation each
year.  The Executive shall be entitled to
carry any unused vacation days over to the next calendar year.  However, in no event will Executive’s accrued
but unused vacation exceed 40 days.

 

E.                                       Directors’ and Officers’ Liability Insurance.  The Company shall indemnify the Executive to
the fullest extent permitted under its by-laws. 
During the Term, the Company shall acquire and pay for directors’ and
officers’ liability insurance coverage for its senior executive officers, and
the Executive shall be named as a covered officer under such policy during the
Term.

 

4.                                      DUTIES
OF THE EXECUTIVE.

 

A.                                    Duties.  During the Term, the Executive shall hold the
title of Senior Vice President and Chief Medical Officer,
shall report directly to the CEO and shall perform such duties as the Company
may reasonably require and shall use his best efforts to carry into effect the
directions of the CEO.

 

B.                                    Representation.  During the Term, the Executive shall well and
faithfully serve the Company and use the Executive’s best efforts to promote
the interests of the Company.  The
Executive shall at all times give the Company the full benefit of his
knowledge, expertise, technical skill and ingenuity in the performance of his
duties and exercise of his powers and authority in the capacity or capacities
described in Section 4(A) hereof, as the case may be.

 

C.                                    Time
Devoted by Executive.  The Executive
agrees to devote substantially all of the Executive’s time and attention during
business hours and such additional time and attention as may reasonably be
required to perform his duties hereunder.

 

5.                                      RESTRICTIONS
ON THE EXECUTIVE.

 

A.                                    Non-Disclosure
of Confidential Information.  All
information learned or developed by the Executive during the course of the
Executive’s employment by the Company or any subsidiary thereof will be deemed “Confidential
Information” under the terms of this Agreement. 
Examples of Confidential Information include, but are not limited to,
business,

 

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scientific and technical information owned or controlled by the
Company, including the Company’s business plans and strategies; business
operations and systems; information concerning employees, customers, partners
and/or licensees; patent applications; trade secrets; inventions; ideas;
procedures; formulations; processes; formulae; data and all other information
of any nature whatsoever which relate to the Company’s business, science,
technology and/or products.  In addition,
Confidential Information shall include, but not be limited to, all information
which the Company may receive from third parties.  The Executive will not disclose to any person
at any time or use in any way, except as directed by the Company, either during
or after the employment of the Executive by the Company, any Confidential
Information.  The foregoing restrictions
shall not apply to information which is or becomes part of the public domain
though no act or failure to act by the Executive.  In addition to the foregoing, in the process
of the Executive’s employment with the Company, or thereafter, under no
condition is the Executive to use or disclose to the Company, or incorporate or
use in any of his work for the Company, any confidential information imparted
to the Executive or with which he may have come into contact while in the employ
of his former employer(s).

 

B.                                    Inventions.  The term “Invention” means any invention,
discovery, improvement, apparatus, implement, process, compound, composition or
formula, whether or not patentable, conceived or reduced to practice, in whole
or in part, by the Executive (alone, or jointly with others) during any term of
his employment by the Company and twelve (12) months thereafter which directly
or indirectly relates to the business, science, technology or products of the
Company and /or any Confidential Information. 
The Executive will keep, on behalf of the Company, complete, accurate,
and authentic accounts, notes, data, and records (“Records”) of each and every
Invention, which Records will, at all times, be the property of the
Company.  The Executive will comply with
the directions of the Company with respect to the manner and form of keeping or
surrendering Records and will surrender to the Company all Records at the end
of the Executive’s term of employment by the Company.

 

Each Invention will
be the sole and exclusive property of the Company. The Executive will, at the
request of the Company, make application in due form for United States letters
patent and foreign letters patent (each, a “Patent”) on any Invention and
execute any necessary documents in connection with the Patents.  The Executive will assign and transfer to the
Company all right, title, and interest of the Executive in any Patents or
Patent applications.  The Executive
agrees to cooperate with any actions necessary to continue, renew or retain the
Patents.  The Company will bear the
entire expense of applying for and obtaining the Patents.

 

For one year after
the termination of the term of the Executive’s employment by the Company, the
Executive will not file any applications for Patents on any Invention other
than those filed at the request of and on behalf of the Company.

 

The Executive, as
a condition of his employment, hereby represents that, to the best of his
knowledge, there is not as of the date of this Agreement any agreement or
obligation outstanding with or to any of his former employers or other party,
which would restrict, limit or in any way prohibit all or any portion of his
work or employment, nor is there in his possession any confidential information
used by any of his former employers or any other party (except as may have been
revealed in generally available publications or otherwise made publicly
available).

 

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C.                                    Non-Competition;
Non-Solicitation.

 

(1)      Non-Competition.  During the Term, without the consent of the
Board, and thereafter as specifically provided in Subsection 6.A.(2) or
6.D.(2), the Executive may not directly or indirectly engage in, or have any
interest in, any business (whether as employee, officer, director, agent,
security holder, creditor, consultant, or otherwise) that competes with the
vaccine and/or antibody business of the Company or any subsidiary thereof (as
such business may exist during the Term).

 

(2)      Non-Solicitation of Employees.  During
the Term, and thereafter as specifically provided in Subsection 6.A.(2) or
6.D.(2), the Executive shall not, directly or indirectly induce or solicit any
employee or independent contractor of the Company or any subsidiary thereof to
terminate his or her employment with the Company for the purpose of  joining another company in which the
Executive has an interest (whether as an employee, officer, director, agent,
security holder, creditor, consultant, or otherwise).

 

D.                                    Breach.  The Executive acknowledges that there may be
circumstances in which his breach of any covenant set forth in this Section 5
could cause substantial harm to the Company which may not be compensable by
monetary damages alone, and which could potentially entitle the Company to
injunctive relief.  However, by
acknowledging this possibility, the Executive is not agreeing to waive his
right to require the Company to meet its evidentiary burdens as required by law
in any cause of action brought by the Company seeking such injunctive relief.  The
restrictions contained in Subsection 5(c) above shall not prohibit
Executive from owning (beneficially or of record) less than 5% of any class of
equity or debt security issued by a publicly-held company, regardless of
whether that publicly-held company is otherwise a competitor of the Company.

 

6.                                      TERMINATION.

 

A.                                    Termination
for Cause by the Company.

 

(1)      This Agreement and the
Term may be terminated “for cause” by the Company pursuant to the provisions of
this Subsection 6.A.  If the Board determines
that “cause” exists for termination of the Executive’s employment, written
notice thereof must be given to the Executive describing the state of affairs
or facts deemed by the Board to constitute such cause.  Unless the Board determines that the conduct
constituting cause is not curable, the Executive shall have thirty (30) days
after receipt of such notice to cure the reason constituting cause and if the
Executive does so to the reasonable satisfaction of the Board, the Term shall
not be terminated for the cause specified in the notice.  During such thirty (30) day period, the Term
shall continue and the Executive shall continue to receive his full Base
Salary, expenses and benefits pursuant
to this Agreement.  If such cause is not
cured to the Board’s reasonable satisfaction within such thirty (30) day
period, the Executive may then be immediately terminated by a majority vote of
the Board.  For purposes of this
Agreement, the words “for cause” or “cause” means (i) dishonest statements
or acts of the Executive with respect to the Company or any subsidiary or other
affiliate of the Company; (ii) the commission by or indictment of the
Executive for (A) a felony or (B) any misdemeanor involving moral
turpitude, deceit, dishonesty or fraud (indictment, for these purposes, meaning
an indictment, probable cause

 

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hearing or any other
procedure pursuant to which an initial determination of probable or reasonable
cause with respect to such offense is made); or (iii) gross negligence,
willful misconduct or insubordination of the Executive with respect to the
Company or any subsidiary or other affiliate of the Company.

 

(2)      In the event the Term is
terminated by the Company for cause, the provisions of Subsections 5.C.(1) and
5.C.(2) shall continue to apply for one year after the conclusion of the
Term.

 

(3)      In the event the Term is
terminated by the Company for cause, the Executive’s entire right to salary and
benefits hereunder (with the exception of Base Salary and Discretionary Bonus
earned and accrued prior to termination) shall cease upon such termination.

 

B.                                    Termination
Without Cause by the Company or for Good Reason by the Executive.

 

(1)      The Company shall have
the right to terminate the Term, at any time, without cause upon ninety (90)
days’ written notice to the Executive.

 

(2)      The Executive shall have
the right to terminate the Term for good reason on thirty (30) days written
notice to the Company.  For purposes of
this Agreement, the words “for good reason” or “good reason” shall be limited
to the following actions by the Company without the Executive’s consent:  (a) the assignment to the Executive of
any duties or responsibilities that results in a material diminution in the
Executive’s position or function; provided, however,
that a change in the Executive’s title or reporting relationships shall not
provide the basis for a termination with good reason unless he no longer
reports directly to the Chief Executive Officer or the Board; (b) a
relocation of the Executive’s business office to a location more than fifty
(50) miles from the location (which may be your home) at which the Executive is
working as of the Effective Date, except for required travel by the Executive
on the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations as of the Effective Date; or (c) a
material breach by the Company of any provision of this Agreement or any other
material agreement between the Executive and the Company concerning the terms
and conditions of the Executive’s employment. 
Such a termination by the Executive for good reason shall not be
considered a resignation pursuant to Subsection 6.C.(1).

 

(3)      In the event the Term is
terminated pursuant to Subsection 6.B.(1) or 6.B.(2), or in the event that
the Company provides the Executive with a Notice of Non-Renewal that would be
effective in connection with the expiration of the Initial Term, and the
Executive’s employment with the Company terminates for any reason within 60 days
following the expiration of the Initial Term, the Company shall pay the
Executive as a severance benefit a lump sum cash severance payment in an amount
equal to 200% of the Executive’s then existing annual Base Salary (i.e., twenty four (24) months of Base Salary) and, if and to
the extent the Executive timely elects to continue his health insurance
employee benefits pursuant to COBRA, then, as determined by the Company, either
(i) the cost to the Executive for such COBRA coverage will be no greater
than the cost of such coverage applicable to active employees of the Company or
(ii) the Executive will pay the applicable COBRA costs and the Company
will reimburse the Executive for such costs, subject to applicable tax
withholdings (the “Severance Benefits”). 
The

 

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foregoing lump sum cash payment shall be paid within
10 days following the effectiveness of the Release (as defined below); provided,
however, that if
necessary to comply with the restriction in Section 409A(a)(2)(B) of
the Internal Revenue Code of 1986, as amended (the “Code”) concerning payments
to “specified employees,” such payment shall be delayed until the first
business day of the seventh month following the Executive’s termination of
employment and “separation from service” (within the meaning of Section 409A
of the Code).  Further, in the
event that the Term is terminated pursuant to Subsection 6.B.(1) or 6.B.(2) only,
25% of the Executive’s outstanding, unvested options, restricted stock and/or
equity awards shall become fully and immediately vested.  Notwithstanding
any provisions of the stock option plan or stock option agreement pursuant to
which any stock options subject to the preceding sentence were granted, the
Executive shall be entitled to exercise such vested equity awards until one
year from the date of termination of employment or the expiration of the stated
period of the vested equity award, whichever period is the shorter.

 

(4)      In the event the Term is
terminated or the Executive’s employment with the Company terminates in a
manner described in this Section 6.B., the provisions of Subsections 5.C.(1) and
5.C.(2) shall continue to apply for one year after the conclusion of the
Term.

 

(5)      Notwithstanding any
provision to the contrary contained herein, the Executive shall not be eligible
or entitled to receive the Severance Benefits unless he executes (and does not
revoke during any applicable revocation period) and deliver to the Company a
separation agreement and release of claims, in such form prepared in good faith
by the Company and provided to the Executive to review no later than 10 days
following the last day of his employment with the Company, within 60 days
following his last day of employment with the Company (the “Release”).

 

C.                                    Resignation
by the Executive.

 

(1)      The Executive shall have
the right to terminate the Term, by way of resignation, upon ninety (90) days’
written notice to the Company.  A
termination by the Executive for good reason pursuant to Subsection 6.B.(2) shall
not be considered a resignation pursuant to this Subsection 6.C.(1).

 

(2)      In the event the Term is
terminated pursuant to Subsection 6.C.(1), the provisions of Subsections 5.C.(1) and
5.C.(2) shall continue to apply for one year after the conclusion of the
Term.

 

(3)      In the event the Term is
terminated pursuant to Subsection 6.C.(1), the Executive’s entire right to
salary and benefits hereunder (with the exception of Base Salary and
Discretionary Bonus earned and accrued prior to termination) shall cease upon
such termination.

 

D.                                    Termination Upon Change in
Control.

 

(1)      For the purposes of this Agreement, a “Change in Control” shall mean
any of the following events that occurs following the Effective Date:

 

(a)                                  An acquisition (other than directly from the
Company) of any voting securities of the Company (the “Voting Securities”)
other than in a “Non-Control

 

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Acquisition” (as defined below) by any “Person”
(as the term “person” is used for purposes of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended, (the “1934 Act”)) which
results in such Person first attaining “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty-one percent
(51%) or more of the combined voting power of the Company’s then outstanding
Voting Securities.  For purposes of the
foregoing, a “Non-Control Acquisition” shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (x) the
Company or (y) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly or
indirectly by the Company (a “Subsidiary”), or (ii) the Company or any
Subsidiary.

 

(b)                                  The individuals who, as of the date of this
Agreement, were members of the Board (the “Incumbent Board”) cease for any
reason to constitute at least 66 2/3% of the Board; provided,
however, that if the election, or a nomination for election by the
Company’s shareholders, of any new director was approved by a vote of at least
66 2/3% of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board; provided further, however,
that no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated
under the 1934 Act) or other actual or threatened solicitation of the proxies
or consents by or on behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or

 

(c)                                  The consummation of a transaction approved by
the Company’s shareholders and involving: 
(1) a merger, consolidation or reorganization in which the Company
is a constituent corporation, unless (i) the shareholders of the Company,
immediately  before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least a majority of
the combined voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or reorganization (the “Surviving
Corporation”) in substantially  the same
proportion as their ownership of the voting securities immediately before such
merger, consolidation or reorganization, (ii) the individuals who were
members of the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or reorganization constitute
at least a majority of the members of the board of directors of the Surviving
Corporation, and (iii) no Person other than (w) the Company, (x) any
Subsidiary, (y) any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Corporation or any
Subsidiary, or (z) any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of fifty-one percent
(51%) or more of the then outstanding Voting Securities, has Beneficial
Ownership of fifty-one percent (51%) or more of the combined voting power of
the Surviving Corporation’s then outstanding voting securities (a transaction
described in clauses (i) and (ii) shall herein be referred to as a “Non-Control
Transaction”); (2) a complete liquidation or dissolution of the Company;
or (3) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a transfer
to a Subsidiary).

 

(d)                                  Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because the level of Beneficial
Ownership held by any Person (the

 

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“Subject Person”) exceeds the designated
percentage threshold of the outstanding Voting Securities as a result of a
repurchase or other acquisition of Voting Securities by the Company reducing
the number of shares outstanding, provided that if a Change in Control would
occur (but for the operation of this sentence) as a result of the acquisition
of Voting Securities by the Company, and after such share acquisition, the
Subject Person becomes the Beneficial Owner of any additional Voting Securities
which, assuming the repurchase or other acquisition had not occurred, increases
the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person over the designated percentage threshold, then a Change in
Control shall occur.

 

(2)      In the event of a termination of the Term pursuant to an event
described in Section 6.B. above, that occurs within a period of one year
immediately following a Change in Control, then this Section 6.D. shall
apply instead of Section 6.B., and the Company shall provide the Executive
the following benefits:

 

(a)                                  Amount:  In
addition to all compensation for services rendered by Executive to the Company
up to the date of termination, the Company shall pay to Executive, no later
than 10 days immediately following the date of such termination, a single
lump-sum payment in an amount equal to (i) twelve (12) times Executive’s
highest monthly base compensation (for avoidance of doubt, excluding the
Interim Accrued Bonus) paid hereunder during the preceding twenty-four month
period, plus (ii) the average of the Discretionary Bonuses (for avoidance
of doubt, excluding any Interim Accrued Bonus) received by the Executive during
the preceding two full fiscal years prior to the date of termination (i.e., (x) the sum of the Discretionary Bonus earned and
paid for each of the preceding two full fiscal years, divided by (y) 2).

 

(b)                                  Benefits:  In
addition to the payment described above, the Company shall provide the
Executive with the Severance Benefits.

 

(c)                                  Acceleration
of Options:  One hundred (100%)
percent of the Executive’s outstanding, unvested options, restricted stock
and/or equity awards (“Equity Awards”) shall, immediately prior to the
consummation of the Change in Control, become fully and immediately vested to
the extent not already so provided under the terms of such Equity Awards;
provided, however, that if the acquirer in a Change in Control grants Equity
Awards having (in the reasonable opinion of the Board) a value at least equal
to the value of Executive’s then-unvested Company Equity Awards, then 50% of
the Executive’s outstanding, unvested Company
Equity Awards shall become fully and immediately vested immediately prior to
the consummation of the Change in Control (and the remaining 50% shall
terminate upon the consummation of the Change in Control).  Notwithstanding any provisions of the stock
option plan or stock option agreement pursuant to which any stock options
subject to the preceding sentence were granted, the Executive shall be entitled
to exercise such Equity Awards until three years from the date of termination
of employment or the expiration of the stated period of the Equity Award,
whichever period is the shorter.

 

(d)                                  Golden Parachute Payment
Provisions:  If any payment or benefit the Executive would
receive pursuant to a Change in Control from the Company or otherwise
(including, without limitation, the acceleration of any Company Equity Awards)

 

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(“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the “Code”), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of the Payment
being subject to the Excise Tax or (y) the largest portion, up to and
including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes,
and the Excise Tax (all computed at the highest applicable marginal rate),
results in the Executive’s receipt, on an after-tax basis, of the greater
amount of the Payment notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. If a reduction in payments or benefits
constituting “parachute payments” is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the following order unless the
Executive elects in writing a different order (provided,
however, that such election shall be subject to Company approval if
made on or after the effective date of the event that triggers the Payment):
reduction of cash payments; cancellation of accelerated vesting of stock
options or equity awards; reduction of employee benefits.  In the event that acceleration of vesting of
stock option or equity award compensation is to be reduced, such acceleration
of vesting shall be cancelled in the reverse order of the date of grant of the
Executive’s stock options or equity awards unless the Executive elects in
writing a different order for cancellation.

 

The accounting firm engaged by the Company for general audit purposes
as of the day prior to the effective date of the Change in Control shall
perform the foregoing calculations and shall make all determinations relating
to the reduction of parachute payments described in the foregoing
paragraph.  If the accounting firm so
engaged by the Company is also serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Company shall
appoint a nationally recognized accounting firm to make the determinations
required hereunder.  The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

 

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

 

E.                                      Termination
for Disability.

 

(1)      Should the Executive be
absent from work as a result of personal injury, sickness or other disability
for any continuous period of time exceeding one hundred eighty (180) days, the
Term may be terminated by the Company, upon written notice given to the
Executive, because of the Executive’s disability.

 

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(2)      In the event the Term is
terminated pursuant to Subsection 6.E.(1), the Company shall have no further
obligation to the Executive except to pay to the Executive any Base Salary or
Discretionary Bonus accrued but remaining unpaid prior to termination of the
Term (and to provide the Executive with the benefits under any disability
insurance or disability benefits plan then-maintained by the Company for the
Executive’s benefit, in accordance with the terms and conditions of such
plan).  In addition, notwithstanding any
provisions of the stock option plan or stock option agreement pursuant to which
any stock options were granted, the Executive shall be entitled to exercise any
of Executive’s stock options vested as of the final day of the Term until
eighteen months from the final day of the Term or the expiration of the stated
period of the option, whichever period is the shorter.

 

F.                                      Termination
Upon Death.  The Term shall terminate
upon the death of the Executive and the Company shall have no further obligation
to the Executive or his estate except to pay the Executive’s estate any Base
Salary or Discretionary Bonus earned and accrued but remaining unpaid prior to
his death.  In addition, notwithstanding
any provisions of the stock option plan or stock option agreement pursuant to
which any stock options were granted, the Executive’s estate shall be entitled
to exercise any of Executive’s stock options vested as of the final day of the
Term until eighteen months from the final day of the Term or the expiration of
the stated period of the option, whichever period is the shorter.

 

7.                                      MISCELLANEOUS.

 

A.                                    Notice.  Any notice to be given hereunder shall either
be delivered personally and/or sent by first class certified mail and regular
mail.  The address for service on the
Company shall be its registered office, and the address for service on the
Executive shall be his last known place of residence.  A notice shall be deemed to have been served
as follows:

 

(1)      if personally delivered,
at the time of delivery; and/or

 

(2)      if posted, at the
expiration of 48 hours (10 days if international) after the envelope containing
the same was delivered into the custody of the postal authorities.

 

B.                                    Taxes.  Any payments made pursuant to this
Agreement shall be subject to any tax or similar withholding requirements under
applicable federal, state or local employment or income tax laws or similar
statutes or other provisions of law then in effect.  This Agreement is intended to comply with the
requirements of Section 409A (“Section 409A”) of the Code and the
regulations thereunder.  To the extent
that any provision in this Agreement is ambiguous as to its compliance with Section 409A,
the provision shall be interpreted in a manner so that no payment due to the
Executive shall be deemed subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of
the Code.  For purposes of Section 409A,
each payment made under this Agreement shall be treated as a separate payment.
Notwithstanding anything contained herein to the contrary, the Executive shall
not be considered to have terminated employment with the Company for purposes
of Section 6 hereof unless the Executive has incurred a “termination of
employment” from the Company within the meaning of Treasury Regulation
§1.409A-1(h)(1)(ii) promulgated under Section 409A of the Code.
Notwithstanding the foregoing, if necessary to comply with the restriction in Section 409A(a)(2)(B) of
the Code concerning payments to “specified employees,” any payment made to the
Executive pursuant to

 

10

 

this Agreement on account of the Executive’s separation from service
that would otherwise be due hereunder within six months after such separation
from service shall nonetheless be delayed until the first business day of the
seventh month following the Executive’s separation from service.  In no event may the Executive, directly or
indirectly, designate the calendar year of any payment.  All reimbursements provided under this
Agreement shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during the Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred, and (iv) the
right to reimbursement is not subject to liquidation or exchange for another
benefit.  The Executive further
acknowledges that, while this Agreement is intended to comply with Section 409A,
any tax liability incurred by the Executive under Section 409A is solely
the responsibility of the Executive.

 

C.                                    Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their
respective heirs, personal representatives, successors and assigns, provided
that neither Party shall assign any of its rights or privileges hereunder
without the prior written consent of the other Party except that the Company
may assign its rights hereunder to a successor in ownership of all or
substantially all the assets of the Company.

 

D.                                    Severability.  Should any part or provision of this
Agreement be held unenforceable by a court of competent jurisdiction, the
validity of the remaining parts or provisions shall not be affected by such
holding, unless such enforceability substantially impairs the benefit of the
remaining portions of the Agreement.

 

E.                                      Waiver.  No failure or delay on the part of either
Party in the exercise of any right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
privilege preclude other or further exercise thereof or of any other right of
privilege.

 

F.                                      Captions.  The captions used in this Agreement are for
convenience only and are not to be used in interpreting the obligations of the
Parties under this Agreement.

 

G.                                    Choice
of Law.  The validity, construction
and performance of this Agreement and all matters directly or indirectly
arising hereunder shall be governed by the laws of the State of Delaware,
without regard to choice of laws provisions, and the Company and the Executive
irrevocably consent to the exclusive jurisdiction and venue of the federal and
state courts located within Delaware, and courts with appellate jurisdiction
therefrom, in connection with any matter based upon or arising out of this
Agreement.

 

H.                                    Entire
Agreement.  This Agreement embodies
the entire understanding of the Parties as it relates to the subject matter
contained herein and as such, supersedes any prior agreement or understanding
between the Parties relating to the terms of employment of the Executive (but
not any option grant agreement issued by the Company to the Executive),
including without limitation any agreement between the Executive and any other
company

 

11

 

acquired by the Company or with respect to which the Company is a
successor in interest.  No amendment or
modification of this Agreement shall be valid or binding upon the Parties unless
in writing executed by the Parties.

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.

 

 

	
   

  	
  CELLDEX THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony S. Marucci

  
	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas Davis, MD

  
	
   

  	
  THOMAS DAVIS, MD

  

 

12Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into this 6 day of January, 2009 (the “Effective Date”),
between Tibor Keler, Ph.D. (the “Executive”)
and CELLDEX THERAPEUTICS, INC., a Delaware corporation (the “Company”)
(collectively, the Executive and the Company shall be referred to as the “Parties”).  In consideration of the mutual promises and
agreements contained herein, the Parties agree as follows:

 

1.                                      PURPOSE.  The Company desires to avail itself of the services
of the Executive as Senior Vice President and
Chief Scientific Officer, and the Executive desires to provide such
services in accordance with the terms of this Agreement.  The Parties agree that the duties and
obligations expected of the Executive and of the Company are as set forth in
this Agreement.

 

2.                                      EFFECTIVE
DATE AND TERM.  This Agreement shall
be effective, and its term (the “Term”) shall commence as of the Effective
Date.  The Term shall continue through
and until December 31, 2011 (the “Initial Term”), unless terminated sooner
as provided by this Agreement or extended by the Parties.  The Term shall be automatically renewed for
successive periods of one year each (each, a “Renewal Term”), unless either
Party gives to the other written notice of intent not to renew at least ninety
(90) days prior to the expiration of the Initial Term or any Renewal Term (a “Notice
of Non-Renewal”).

 

3.                                      COMPENSATION.

 

A.            Salary. 
During the Term, the Company shall pay or cause to be paid to the
Executive, in installments pursuant to the Company’s payroll practices as in
effect from time to time, a base salary of $342,000 per
annum or such greater amount as may from time to time be determined by the
Board of Directors or the Compensation Committee thereof (the “Board”) of the
Company (the “Base Salary”).  The Base
Salary shall be reviewed annually in accordance with the Company’s compensation
and review policies and, in the sole discretion of the Board, may be increased.

 

B.            Annual Bonus. 
With respect to each fiscal year of the Company that ends during the
Term, the Executive shall be eligible to receive an annual bonus (the “Discretionary
Bonus”) based upon the Executive’s overall performance of the Services on
behalf of the Company during such fiscal year, and/or based upon the Company’s
attainment of pre-established goals relating to such fiscal year (which if
applicable, will be determined by the Chief Executive Officer (“CEO”) of the
Company and the Board and communicated to the Executive within 30 days following
the beginning of the applicable fiscal year). 
Commencing with fiscal year 2009, the CEO and the Board shall determine
a target amount for the Discretionary Bonus and communicate that to the
Executive prior to February 1 of the bonus year.  The attainment of any applicable performance
goals and the amount to be paid in respect of the Discretionary Bonus shall be
determined by the CEO or the Board in good faith and in accordance with such
written goals and policies as may be established from time to time by the Board
and the CEO.  The Discretionary Bonus, if
any, shall be payable as a lump-sum payment within sixty (60) days immediately
following the last day of the applicable fiscal year.

 

 

C.            Expenses.  The Company shall reimburse the Executive for
any travel, hotel, entertainment and other expenses reasonably incurred by the
Executive in furtherance of the Executive’s duties under this Agreement subject
to and in accordance with the Company’s applicable travel and expense
reimbursement policies.

 

D.            Employee Benefits. 
The Executive shall be entitled to participate in any
and all employee benefit plans in effect from time to time that are provided
generally to employees of the Company, and in any executive perquisite programs
in effect from time to time that provide benefits to other executives of the
Company of comparable stature and with comparable duties and
responsibilities.  During the Term, the
Company shall acquire and pay for, or reimburse the Executive for,
hospitalization, dental, major medical, or other health insurance for the
benefit of the Executive and his dependents at least equal to that generally
provided other executive employees under the Company’s group health insurance
plan(s).  The Executive shall, during the
Term, be entitled to paid time off in accordance with applicable Company
policies in effect from time to time, in addition to public holidays observed
by the Company.  The Executive shall be
entitled to twenty (20) business days of vacation each year.  The Executive shall be entitled to carry any
unused vacation days over to the next calendar year.  However, in no event will Executive’s accrued
but unused vacation exceed 40 days.

 

E.             Directors’
and Officers’ Liability Insurance. 
  The Company shall indemnify the
Executive to the fullest extent permitted under its by-laws.  During the Term, the Company shall acquire
and pay for directors’ and officers’ liability insurance coverage for its
senior executive officers, and the Executive shall be named as a covered
officer under such policy during the Term.

 

4.                                      DUTIES
OF THE EXECUTIVE.

 

A.            Duties. 
During the Term, the Executive shall hold the title of Senior Vice President and Chief Scientific Officer, shall
report directly to the CEO and shall perform such duties as the Company may reasonably
require and shall use his best efforts to carry into effect the directions of
the CEO.

 

B.            Representation.  During the Term, the Executive shall well and
faithfully serve the Company and use the Executive’s best efforts to promote
the interests of the Company.  The
Executive shall at all times give the Company the full benefit of his
knowledge, expertise, technical skill and ingenuity in the performance of his
duties and exercise of his powers and authority in the capacity or capacities
described in Section 4(A) hereof, as the case may be.

 

C.            Time Devoted by Executive.    The
Executive agrees to devote substantially all of the Executive’s time and
attention during business hours and such additional time and attention as may
reasonably be required to perform his duties hereunder.

 

5.                                      RESTRICTIONS
ON THE EXECUTIVE.

 

A.            Non-Disclosure of Confidential Information.  All information learned or developed by the
Executive during the course of the Executive’s employment by the Company or any
subsidiary thereof will be deemed “Confidential Information” under the terms of
this Agreement.  Examples of Confidential
Information include, but are not limited to, business,

 

2

 

scientific and technical information owned or
controlled by the Company, including the Company’s business plans and
strategies; business operations and systems; information concerning employees,
customers, partners and/or licensees; patent applications; trade secrets;
inventions; ideas; procedures; formulations; processes; formulae; data and all
other information of any nature whatsoever which relate to the Company’s
business, science, technology and/or products. 
In addition, Confidential Information shall include, but not be limited
to, all information which the Company may receive from third parties.  The Executive will not disclose to any person
at any time or use in any way, except as directed by the Company, either during
or after the employment of the Executive by the Company, any Confidential
Information.  The foregoing restrictions
shall not apply to information which is or becomes part of the public domain
though no act or failure to act by the Executive.  In addition to the foregoing, in the process
of the Executive’s employment with the Company, or thereafter, under no
condition is the Executive to use or disclose to the Company, or incorporate or
use in any of his work for the Company, any confidential information imparted
to the Executive or with which he may have come into contact while in the
employ of his former employer(s).

 

B.            Inventions.    The
term “Invention” means any invention, discovery, improvement, apparatus,
implement, process, compound, composition or formula, whether or not
patentable, conceived or reduced to practice, in whole or in part, by the
Executive (alone, or jointly with others) during any term of his employment by
the Company and twelve (12) months thereafter which directly or indirectly
relates to the business, science, technology or products of the Company and /or
any Confidential Information.  The
Executive will keep, on behalf of the Company, complete, accurate, and
authentic accounts, notes, data, and records (“Records”) of each and every
Invention, which Records will, at all times, be the property of the Company.  The Executive will comply with the directions
of the Company with respect to the manner and form of keeping or surrendering
Records and will surrender to the Company all Records at the end of the
Executive’s term of employment by the Company.

 

Each Invention will be the sole and exclusive property
of the Company. The Executive will, at the request of the Company, make
application in due form for United States letters patent and foreign letters
patent (each, a “Patent”) on any Invention and execute any necessary documents
in connection with the Patents.  The
Executive will assign and transfer to the Company all right, title, and
interest of the Executive in any Patents or Patent applications.  The Executive agrees to cooperate with any
actions necessary to continue, renew or retain the Patents.  The Company will bear the entire expense of
applying for and obtaining the Patents.

 

For one year after the termination of the term of the
Executive’s employment by the Company, the Executive will not file any applications
for Patents on any Invention other than those filed at the request of and on
behalf of the Company. 

 

The Executive, as a condition of his employment,
hereby represents that, to the best of his knowledge, there is not as of the
date of this Agreement any agreement or obligation outstanding with or to any
of his former employers or other party, which would restrict, limit or in any
way prohibit all or any portion of his work or employment, nor is there in his
possession any confidential information used by any of his former employers or
any other party (except as may have been revealed in generally available
publications or otherwise made publicly available).

 

3

 

C.                                    Non-Competition;
Non-Solicitation.

 

(1)  Non-Competition.   During
the Term, without the consent of the Board, and thereafter as specifically
provided in Subsection 6.A.(2) or 6.D.(2), the Executive may not directly
or indirectly engage in, or have any interest in, any business (whether as
employee, officer, director, agent, security holder, creditor, consultant, or
otherwise) that competes with the vaccine and/or antibody business of the
Company or any subsidiary thereof (as such business may exist during the Term).

 

(2)  Non-Solicitation
of Employees.   During the Term, and
thereafter as specifically provided in Subsection 6.A.(2) or 6.D.(2), the
Executive shall not, directly or indirectly induce or solicit any employee or
independent contractor of the Company or any subsidiary thereof to terminate
his or her employment with the Company for the purpose of  joining another company in which the
Executive has an interest (whether as an employee, officer, director, agent,
security holder, creditor, consultant, or otherwise).

 

D.                                    Breach.  The Executive acknowledges that there may be
circumstances in which his breach of any covenant set forth in this Section 5
could cause substantial harm to the Company which may not be compensable by
monetary damages alone, and which could potentially entitle the Company to
injunctive relief.  However, by
acknowledging this possibility, the Executive is not agreeing to waive his
right to require the Company to meet its evidentiary burdens as required by law
in any cause of action brought by the Company seeking such injunctive
relief.  The restrictions contained in Subsection 5(c) above shall not
prohibit Executive from owning (beneficially or of record) less than 5% of any
class of equity or debt security issued by a publicly-held company, regardless
of whether that publicly-held company is otherwise a competitor of the Company.

 

6.                                      TERMINATION.

 

A.                                    Termination
for Cause by the Company.

 

(1)  This Agreement and the Term
may be terminated “for cause” by the Company pursuant to the provisions of this
Subsection 6.A.  If the Board determines
that “cause” exists for termination of the Executive’s employment, written
notice thereof must be given to the Executive describing the state of affairs
or facts deemed by the Board to constitute such cause.  Unless the Board determines that the conduct
constituting cause is not curable, the Executive shall have thirty (30) days
after receipt of such notice to cure the reason constituting cause and if the
Executive does so to the reasonable satisfaction of the Board, the Term shall not
be terminated for the cause specified in the notice.  During such thirty (30) day period, the Term
shall continue and the Executive shall continue to receive his full Base
Salary, expenses and benefits pursuant
to this Agreement.  If such cause is not
cured to the Board’s reasonable satisfaction within such thirty (30) day
period, the Executive may then be immediately terminated by a majority vote of
the Board.  For purposes of this
Agreement, the words “for cause” or “cause” means (i) dishonest statements
or acts of the Executive with respect to the Company or any subsidiary or other
affiliate of the Company; (ii) the commission by or indictment of the
Executive for (A) a felony or (B) any misdemeanor involving moral
turpitude, deceit, dishonesty or fraud (indictment, for these purposes, meaning
an indictment, probable cause 

 

4

 

hearing
or any other procedure pursuant to which an initial determination of probable
or reasonable cause with respect to such offense is made); or (iii) gross
negligence, willful misconduct or insubordination of the Executive with respect
to the Company or any subsidiary or other affiliate of the Company.

 

(2)  In the event the Term is
terminated by the Company for cause, the provisions of Subsections 5.C.(1) and
5.C.(2) shall continue to apply for one year after the conclusion of the
Term.

 

(3)  In the event the Term is
terminated by the Company for cause, the Executive’s entire right to salary and
benefits hereunder (with the exception of Base Salary and Discretionary Bonus
earned and accrued prior to termination) shall cease upon such termination.

 

B.                                    Termination
Without Cause by the Company or for Good Reason by the Executive.

 

(1)  The Company shall have the
right to terminate the Term, at any time, without cause upon ninety (90) days’
written notice to the Executive.

 

(2)  The Executive shall have the
right to terminate the Term for good reason on thirty (30) days written notice
to the Company.  For purposes of this
Agreement, the words “for good reason” or “good reason” shall be limited to the
following actions by the Company without the Executive’s consent:  (a) the assignment to the Executive of
any duties or responsibilities that results in a material diminution in the
Executive’s position or function; provided, however,
that a change in the Executive’s title or reporting relationships shall not
provide the basis for a termination with good reason unless he no longer
reports directly to the Chief Executive Officer or the Board; (b) a
relocation of the Executive’s business office to a location more than fifty
(50) miles from the location in Phillipsburg, New Jersey at which the Executive
is working as of the Effective Date, except for required travel by the
Executive on the Company’s business to an extent substantially consistent with
the Executive’s business travel obligations as of the Effective Date; or (c) a
material breach by the Company of any provision of this Agreement or any other
material agreement between the Executive and the Company concerning the terms
and conditions of the Executive’s employment. 
Such a termination by the Executive for good reason shall not be
considered a resignation pursuant to Subsection 6.C.(1).

 

(3)  In the event the Term is
terminated pursuant to Subsection 6.B.(1) or 6.B.(2), or in the event that
the Company provides the Executive with a Notice of Non-Renewal that would be
effective in connection with the expiration of the Initial Term, and the
Executive’s employment with the Company terminates for any reason within 60
days following the expiration of the Initial Term, the Company shall pay the
Executive as a severance benefit a lump sum cash severance payment in an amount
equal to 200% of the Executive’s then existing annual Base Salary (i.e., twenty four (24) months of Base Salary) and, if and to
the extent the Executive timely elects to continue his health insurance
employee benefits pursuant to COBRA, then, as determined by the Company, either
(i) the cost to the Executive for such COBRA coverage will be no greater
than the cost of such coverage applicable to active employees of the Company or
(ii) the Executive will pay the applicable COBRA costs and the Company
will reimburse the Executive for such costs, subject to applicable tax
withholdings (the “Severance Benefits”). 
The 

 

5

 

foregoing lump sum cash
payment shall be paid within 10 days following the effectiveness of the Release
(as defined below); provided, however, that if necessary to comply with the
restriction in Section 409A(a)(2)(B) of the Internal Revenue Code of
1986, as amended (the “Code”) concerning payments to “specified employees,”
such payment shall be delayed until the first business day of the seventh month
following the Executive’s termination of employment and “separation from
service” (within the meaning of Section 409A of the Code).  Further, in the event that the Term is
terminated pursuant to Subsection 6.B.(1) or 6.B.(2) only, 25% of the
Executive’s outstanding, unvested options, restricted stock and/or equity
awards shall become fully and immediately vested.  Notwithstanding
any provisions of the stock option plan or stock option agreement pursuant to
which any stock options subject to the preceding sentence were granted, the
Executive shall be entitled to exercise such vested equity awards until one
year from the date of termination of employment or the expiration of the stated
period of the vested equity award, whichever period is the shorter.

 

(4)  In the event the Term is terminated
or the Executive’s employment with the Company terminates in a manner described
in this Section 6.B., the provisions of Subsections 5.C.(1) and 5.C.(2) shall
continue to apply for one year after the conclusion of the Term.

 

(5)  Notwithstanding any
provision to the contrary contained herein, the Executive shall not be eligible
or entitled to receive the Severance Benefits unless he executes (and does not
revoke during any applicable revocation period) and deliver to the Company a
separation agreement and release of claims, in such form prepared in good faith
by the Company and provided to the Executive to review no later than 10 days
following the last day of his employment with the Company, within 60 days
following his last day of employment with the Company (the “Release”).

 

C.                                    Resignation
by the Executive.

 

(1)  The Executive shall have the
right to terminate the Term, by way of resignation, upon ninety (90) days’
written notice to the Company.  A
termination by the Executive for good reason pursuant to Subsection 6.B.(2) shall
not be considered a resignation pursuant to this Subsection 6.C.(1).

 

(2)  In the event the Term is
terminated pursuant to Subsection 6.C.(1), the provisions of Subsections 5.C.(1) and
5.C.(2) shall continue to apply for one year after the conclusion of the
Term.

 

(3)  In the event the Term is
terminated pursuant to Subsection 6.C.(1), the Executive’s entire right to
salary and benefits hereunder (with the exception of Base Salary and
Discretionary Bonus earned and accrued prior to termination) shall cease upon
such termination.

 

D.                                    Termination Upon Change in
Control.

 

(1)  For the purposes of this Agreement, a “Change
in Control” shall mean any of the following events that occurs following the
Effective Date:

 

(a)           An acquisition (other than directly from the
Company) of any voting securities of the Company (the “Voting Securities”)
other than in a “Non-Control 

 

6

 

Acquisition” (as defined
below) by any “Person” (as the term “person” is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended, (the “1934 Act”))
which results in such Person first attaining “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty-one percent
(51%) or more of the combined voting power of the Company’s then outstanding
Voting Securities.  For purposes of the
foregoing, a “Non-Control Acquisition” shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (x) the
Company or (y) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly or
indirectly by the Company (a “Subsidiary”), or (ii) the Company or any Subsidiary.

 

(b)           The individuals who, as of the date of this
Agreement, were members of the Board (the “Incumbent Board”) cease for any
reason to constitute at least 66 2/3% of the Board; provided,
however, that if the election, or a nomination for election by the
Company’s shareholders, of any new director was approved by a vote of at least
66 2/3% of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board; provided further, however,
that no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated
under the 1934 Act) or other actual or threatened solicitation of the proxies
or consents by or on behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or

 

(c)           The consummation of a transaction approved by
the Company’s shareholders and involving: 
(1) a merger, consolidation or reorganization in which the Company
is a constituent corporation, unless (i) the shareholders of the Company,
immediately  before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least a majority of
the combined voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or reorganization (the “Surviving
Corporation”) in substantially  the same
proportion as their ownership of the voting securities immediately before such
merger, consolidation or reorganization, (ii) the individuals who were
members of the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or reorganization constitute
at least a majority of the members of the board of directors of the Surviving
Corporation, and (iii) no Person other than (w) the Company, (x) any
Subsidiary, (y) any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Corporation or any
Subsidiary, or (z) any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of fifty-one percent
(51%) or more of the then outstanding Voting Securities, has Beneficial
Ownership of fifty-one percent (51%) or more of the combined voting power of
the Surviving Corporation’s then outstanding voting securities (a transaction
described in clauses (i) and (ii) shall herein be referred to as a “Non-Control
Transaction”); (2) a complete liquidation or dissolution of the Company;
or (3) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).

 

(d)           Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because the level of Beneficial
Ownership held by any Person (the 

 

7

 

“Subject Person”) exceeds
the designated percentage threshold of the outstanding Voting Securities as a
result of a repurchase or other acquisition of Voting Securities by the Company
reducing the number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share
acquisition, the Subject Person becomes the Beneficial Owner of any additional
Voting Securities which, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person over the designated percentage
threshold, then a Change in Control shall occur.

 

(2)  In the event of a termination of the Term
pursuant to an event described in Section 6.B. above, that occurs within a
period of one year immediately following a Change in Control, then this Section 6.D.
shall apply instead of Section 6.B., and the Company shall provide the
Executive the following benefits:

 

(a)           Amount:    In addition to all compensation for services
rendered by Executive to the Company up to the date of termination, the Company
shall pay to Executive, no later than 10 days immediately following the date of
such termination, a single lump-sum payment in an amount equal to (i) twelve
(12) times Executive’s highest monthly base compensation (for avoidance of
doubt, excluding the Interim Accrued Bonus) paid hereunder during the preceding
twenty-four month period, plus (ii) the average of the Discretionary
Bonuses (for avoidance of doubt, excluding any Interim Accrued Bonus) received
by the Executive during the preceding two full fiscal years prior to the date
of termination (i.e., (x) the sum of the
Discretionary Bonus earned and paid for each of the preceding two full fiscal
years, divided by (y) 2).

 

(b)           Benefits:  In
addition to the payment described above, the Company shall provide the
Executive with the Severance Benefits.

 

(c)           Acceleration of Options:  One
hundred (100%) percent of the Executive’s outstanding, unvested options,
restricted stock and/or equity awards (“Equity Awards”) shall, immediately
prior to the consummation of the Change in Control, become fully and
immediately vested to the extent not already so provided under the terms of
such Equity Awards; provided, however, that if the acquirer in a Change in
Control grants Equity Awards having (in the reasonable opinion of the Board) a
value at least equal to the value of Executive’s then-unvested Company Equity
Awards, then 50% of the Executive’s outstanding, unvested Company Equity Awards
shall become fully and immediately vested immediately prior to the consummation
of the Change in Control (and the remaining 50% shall terminate upon the
consummation of the Change in Control). 
Notwithstanding any provisions of the stock option plan or stock option
agreement pursuant to which any stock options subject to the preceding sentence
were granted, the Executive shall be entitled to exercise such Equity Awards
until three years from the date of termination of employment or the expiration
of the stated period of the Equity Award, whichever period is the shorter.

 

(d)           Golden Parachute Payment Provisions:  If
any payment or benefit the Executive would receive pursuant to a Change in
Control from the Company or otherwise (including, without limitation, the
acceleration of any Company Equity Awards)

 

8

 

(“Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then such Payment shall be reduced to the Reduced
Amount.  The “Reduced Amount” shall be
either (x) the largest portion of the Payment that would result in no
portion of the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever amount, after
taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in the Executive’s receipt, on an after-tax basis, of
the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. If a reduction in payments or
benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following order unless
the Executive elects in writing a different order (provided,
however, that such election shall be subject to Company approval if
made on or after the effective date of the event that triggers the Payment):
reduction of cash payments; cancellation of accelerated vesting of stock
options or equity awards; reduction of employee benefits.  In the event that acceleration of vesting of
stock option or equity award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of the
Executive’s stock options or equity awards unless the Executive elects in
writing a different order for cancellation.

 

The accounting firm engaged
by the Company for general audit purposes as of the day prior to the effective
date of the Change in Control shall perform the foregoing calculations and
shall make all determinations relating to the reduction of parachute payments
described in the foregoing paragraph.  If
the accounting firm so engaged by the Company is also serving as accountant or
auditor for the individual, entity or group effecting the Change in Control,
the Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder.  The
Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.

 

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

 

E.                                     Termination
for Disability.

 

(1)  Should the Executive be
absent from work as a result of personal injury, sickness or other disability
for any continuous period of time exceeding one hundred eighty (180) days, the
Term may be terminated by the Company, upon written notice given to the
Executive, because of the Executive’s disability.

 

9

 

(2)  In the event the Term is
terminated pursuant to Subsection 6.E.(1), the Company shall have no further
obligation to the Executive except to pay to the Executive any Base Salary or
Discretionary Bonus accrued but remaining unpaid prior to termination of the
Term (and to provide the Executive with the benefits under any disability
insurance or disability benefits plan then-maintained by the Company for the
Executive’s benefit, in accordance with the terms and conditions of such
plan).  In addition, notwithstanding any
provisions of the stock option plan or stock option agreement pursuant to which
any stock options were granted, the Executive shall be entitled to exercise any
of Executive’s stock options vested as of the final day of the Term until
eighteen months from the final day of the Term or the expiration of the stated
period of the option, whichever period is the shorter.

 

F.                                     Termination
Upon Death.  The Term shall terminate
upon the death of the Executive and the Company shall have no further obligation
to the Executive or his estate except to pay the Executive’s estate any Base
Salary or Discretionary Bonus earned and accrued but remaining unpaid prior to
his death.  In addition, notwithstanding
any provisions of the stock option plan or stock option agreement pursuant to
which any stock options were granted, the Executive’s estate shall be entitled
to exercise any of Executive’s stock options vested as of the final day of the
Term until eighteen months from the final day of the Term or the expiration of
the stated period of the option, whichever period is the shorter.

 

7.                                      MISCELLANEOUS.

 

A.                                    Notice.   Any
notice to be given hereunder shall either be delivered personally and/or sent
by first class certified mail and regular mail. 
The address for service on the Company shall be its registered office,
and the address for service on the Executive shall be his last known place of
residence.  A notice shall be deemed to
have been served as follows:

 

(1)  if personally delivered, at
the time of delivery; and/or

 

(2)  if posted, at the expiration
of 48 hours (10 days if international) after the envelope containing the same
was delivered into the custody of the postal authorities.

 

B.                                    Taxes.  Any payments made pursuant to this
Agreement shall be subject to any tax or similar withholding requirements under
applicable federal, state or local employment or income tax laws or similar
statutes or other provisions of law then in effect.  This Agreement is intended to comply with the
requirements of Section 409A (“Section 409A”) of the Code and the
regulations thereunder.  To the extent
that any provision in this Agreement is ambiguous as to its compliance with Section 409A,
the provision shall be interpreted in a manner so that no payment due to the
Executive shall be deemed subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of
the Code.  For purposes of Section 409A,
each payment made under this Agreement shall be treated as a separate payment.
Notwithstanding anything contained herein to the contrary, the Executive shall
not be considered to have terminated employment with the Company for purposes
of Section 6 hereof unless the Executive has incurred a “termination of
employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii) promulgated
under Section 409A of the Code. Notwithstanding the foregoing, if
necessary to comply with the restriction in Section 409A(a)(2)(B) of
the Code concerning payments to “specified employees,” any payment made to the
Executive pursuant to 

 

10

 

this Agreement on account of the Executive’s
separation from service that would otherwise be due hereunder within six months
after such separation from service shall nonetheless be delayed until the first
business day of the seventh month following the Executive’s separation from
service.  In no event may the Executive,
directly or indirectly, designate the calendar year of any payment.  All reimbursements provided under this
Agreement shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during the Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred, and (iv) the
right to reimbursement is not subject to liquidation or exchange for another
benefit.  The Executive further
acknowledges that, while this Agreement is intended to comply with Section 409A,
any tax liability incurred by the Executive under Section 409A is solely
the responsibility of the Executive.

 

C.            Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective heirs, personal
representatives, successors and assigns, provided that neither Party shall
assign any of its rights or privileges hereunder without the prior written
consent of the other Party except that the Company may assign its rights
hereunder to a successor in ownership of all or substantially all the assets of
the Company.

 

D.            Severability.  Should any part or provision of this
Agreement be held unenforceable by a court of competent jurisdiction, the
validity of the remaining parts or provisions shall not be affected by such
holding, unless such enforceability substantially impairs the benefit of the
remaining portions of the Agreement.

 

E.             Waiver.  No failure or delay on the part of either
Party in the exercise of any right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
privilege preclude other or further exercise thereof or of any other right of
privilege.

 

F.             Captions.  The captions used in this Agreement are for
convenience only and are not to be used in interpreting the obligations of the
Parties under this Agreement.

 

G.            Choice of Law.    The
validity, construction and performance of this Agreement and all matters
directly or indirectly arising hereunder shall be governed by the laws of the
State of Delaware, without regard to choice of laws provisions, and the Company
and the Executive irrevocably consent to the exclusive jurisdiction and venue
of the federal and state courts located within Delaware, and courts with
appellate jurisdiction therefrom, in connection with any matter based upon or
arising out of this Agreement.

 

H.            Entire Agreement.  This Agreement embodies the entire
understanding of the Parties as it relates to the subject matter contained
herein and as such, supersedes any prior agreement or understanding between the
Parties relating to the terms of employment of the Executive (but not any
option grant agreement issued by the Company to the Executive), including
without limitation any agreement between the Executive and any other company 

 

11

 

acquired by the Company or with respect to which the
Company is a successor in interest.  No
amendment or modification of this Agreement shall be valid or binding upon the
Parties unless in writing executed by the Parties.

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year
first written above.

 

 

	
   

  	
  CELLDEX
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony S.
  Marucci

  
	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Tibor Keler,
  Ph.D.

  
	
   

  	
  TIBOR
  KELER, PH.D.

  

 

12

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