Document:

Exhibit 4.6

 

ZORAN
CORPORATION

 

AMENDED
AND RESTATED

1995
EMPLOYEE STOCK PURCHASE PLAN

(As
Amended and Restated Through April 19, 2006)

 

1.             Establishment, Purpose and
Term of Plan.

 

1.1           Establishment.  The Zoran Corporation 1995 Employee Stock
Purchase Plan was initially established effective December 14, 1995 (the “Effective Date”), the effective date of the initial
registration by the Company of its Stock under Section 12 of the Exchange
Act (the “Initial Plan”).  The Initial Plan was amended and restated in
its entirety as the Zoran Corporation Amended and Restated 1995 Employee Stock
Purchase Plan (the “Plan”)
effective as of the date of commencement of the first Offering under the Plan
following approval of the Plan by the stockholders of the Company on June 6,
1996.

 

1.2           Purpose.  The purpose of the Plan to provide Eligible
Employees of the Participating Company Group with an opportunity to acquire a
proprietary interest in the Company through the purchase of Stock.  The Company intends that the Plan shall
qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments or replacements of such section), and the Plan shall
be so construed.

 

1.3           Term of Plan.  The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued.

 

2.             Definitions and
Construction.

 

2.1           Definitions.  Any term not expressly defined in the Plan
but defined for purposes of Section 423 of the Code shall have the same
definition herein.  Whenever used herein,
the following terms shall have their respective meanings set forth below:

 

(a)           “Board” means the Board of Directors of the Company.  If one or more Committees have been appointed
by the Board to administer the Plan, “Board” also means such Committee(s).

 

(b)           “Code” means the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.

 

(c)           “Committee” means a committee of the Board duly appointed to
administer the Plan and having such powers as shall be specified by the
Board.  Unless the powers of the
Committee have been specifically limited, the Committee shall have all of the
powers of the Board granted herein, including, without limitation, the power to
amend or terminate the Plan at any time, subject to the terms of the Plan and
any applicable limitations imposed by law.

 

(d)           “Company” means Zoran Corporation, a Delaware corporation, or
any successor corporation thereto.

 

(e)           “Compensation” means, with respect to an Offering Period
under the Plan, all amounts paid in cash in the form of base salary during such
Offering Period before deduction for any contributions to any plan maintained
by a Participating Company and described in Section 401(k) or Section 125
of the Code.  Compensation shall not
include commissions, overtime, bonuses, annual awards, other incentive
payments, shift premiums, reimbursements of expenses, allowances, long-term
disability, workers’ compensation or any amount deemed received without the
actual transfer of cash or any amounts directly or indirectly paid pursuant to
the Plan or any other stock purchase or stock option plan.

 

(f)            “Eligible Employee” means an Employee who meets the
requirements set forth in Section 5 for eligibility to participate in the
Plan.

 

 

(g)           “Employee” means any person treated as an employee (including
an officer or a Director who is also treated as an employee) in the records of
a Participating Company and for purposes of Section 423 of the Code;
provided, however, that neither service as a Director nor payment of a director’s
fee shall be sufficient to constitute employment for purposes of the Plan.

 

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(i)            “Fair Market Value” means, as of any date, if there is then a
public market for the Stock, the closing price of a share of Stock (or the mean
of the closing bid and asked prices of a share of Stock if the Stock is so
reported instead) as reported on the National Association of Securities Dealers
Automated Quotation (“NASDAQ”)
System, the NASDAQ National Market System or such other national or regional
securities exchange or market system constituting the primary market for the
Stock.  If the relevant date does not
fall on a day on which the Stock is trading on NASDAQ, the NASDAQ National
Market System or other national or regional securities exchange or market
system, the date on which the Fair Market Value shall be established shall be
the last day on which the Stock was so traded prior to the relevant date, or
such other appropriate day as shall be determined by the Board, in its sole
discretion.  If there is then no public
market for the Stock, the Fair Market Value on any relevant date shall be as
determined by the Board without regard to any restriction other than a
restriction which, by its terms, will never lapse.  Notwithstanding the foregoing, the Fair
Market Value per share of Stock on the Effective Date shall be deemed to be the
public offering price set forth in the final prospectus filed with the
Securities and Exchange Commission in connection with the initial public
offering of the Stock.

 

(j)            “Offering” means an offering of Stock as provided in Section 6.

 

(k)           “Offering Date” means, for any Offering Period, the first day
of such Offering Period.

 

(l)            “Offering Period” means a period determined in accordance
with Section 6.1.

 

(m)          “Parent Corporation” means any present or future “parent
corporation” of the Company, as defined in Section 424(e) of the
Code.

 

(n)           “Participant” means an Eligible Employee participating in the
Plan.

 

(o)           “Participating Company” means the Company or any Parent
Corporation or Subsidiary Corporation which the Board determines should be
included in the Plan.  The Board shall
have the sole and absolute discretion to determine from time to time what
Parent Corporations or Subsidiary Corporations shall be Participating
Companies.

 

(p)           “Participating Company Group” means, at any point in time,
the Company and all other corporations collectively which are then
Participating Companies.

 

(q)           “Purchase Date” means, for any Purchase Period, the last day
of such Purchase Period.

 

(r)            “Purchase Period” means a period determined in accordance
with Section 6.2.

 

(s)           “Purchase Price” means the price at which a share of Stock
may be purchased pursuant to the Plan, as determined in accordance with Section 9.

 

(t)            “Purchase Right”  means
an option pursuant to the Plan to purchase such shares of Stock as provided in Section 8
which may or may not be exercised during an Offering Period.  Such option arises from the right of a
Participant to withdraw such Participant’s accumulated payroll deductions not
previously applied to the purchase of Stock under the Plan (if any) and
terminate participation in the Plan or any Offering therein at any time during
an Offering Period.

 

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(u)           “Stock” means the common stock, par value $0.001, of the
Company, as adjusted from time to time in accordance with Section 4.2.

 

(v)           “Subsidiary Corporation” means any present or future “subsidiary
corporation” of the Company, as defined in Section 424(f) of the
Code.

 

2.2           Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural, the
plural shall include the singular, and use of the term “or” shall include the
conjunctive as well as the disjunctive.

 

3.             Administration.  The Plan shall be administered by the Board,
including any duly appointed Committee of the Board.  All questions of interpretation of the Plan
or of any Purchase Right shall be determined by the Board and shall be final
and binding upon all persons having an interest in the Plan or such Purchase
Right.  Subject to the provisions of the
Plan, the Board shall determine all of the relevant terms and conditions of
Purchase Rights granted pursuant to the Plan; provided, however, that all
Participants granted Purchase Rights pursuant to the Plan shall have the same
rights and privileges within the meaning of Section 423(b)(5) of the
Code.  All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.

 

4.             Shares Subject to Plan.

 

4.1           Maximum Number of Shares Issuable.  Subject to adjustment as provided in Section 4.2,
the maximum aggregate number of shares of Stock that may be issued under the
Plan shall be four million two hundred twenty-five thousand (4,225,000) and
shall consist of authorized but unissued or reacquired shares of the Stock, or
any combination thereof.  If an
outstanding Purchase Right for any reason expires or is terminated or canceled,
the shares of Stock allocable to the unexercised portion of such Purchase Right
shall again be available for issuance under the Plan.

 

4.2           Adjustments for Changes in Capital Structure.  In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company, or in the event of any
merger (including a merger effected for the purpose of changing the Company’s
domicile), sale of assets or other reorganization in which the Company is a
party, appropriate adjustments shall be made in the number and class of shares
subject to the Plan, to the Offering Share Limit set forth in Section 8.1
and to each Purchase Right and in the Purchase Price.

 

5.             Eligibility.

 

5.1           Employees Eligible to Participate.  Any Employee of a Participating Company
is eligible to participate in the Plan except the following:

 

(a)           Employees
who are customarily employed by the Participating Company Group for twenty (20)
hours or less per week;

 

(b)           Employees
who are customarily employed by the Participating Company Group for not more
than five (5) months in any calendar year; and

 

(c)           Employees
who own or hold options to purchase or who, as a result of participation in the
Plan, would own or hold options to purchase, stock of the Company or of any Parent
Corporation or Subsidiary Corporation possessing five percent (5%) or more of
the total combined voting power or value of all classes of stock of such
corporation within the meaning of Section 423(b)(3) of the Code.

 

5.2           Leased Employees Excluded.  Notwithstanding anything herein to the
contrary, any individual performing services for a Participating Company solely
through a leasing agency or employment agency shall not be deemed an “Employee”
of such Participating Company.

 

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6.             Offerings.

 

6.1           Offering Periods.  Except as otherwise set forth below, the Plan
shall be implemented by sequential Offerings of approximately twenty-four (24)
months duration (an “Offering Period”);
provided, however that the first Offering Period shall commence on the
Effective Date and end on October 31, 1997 (the “Initial
Offering Period”).  Subsequent
Offerings shall commence on the first days of May and November of
each year and end on the last days of the second April and October,
respectively, occurring thereafter. 
Notwithstanding the foregoing, the Board may establish a different term
for one or more Offerings or different commencing or ending dates for such
Offerings; provided, however, that no Offering may exceed a term of
twenty-seven (27) months.  An Employee
who becomes an Eligible Employee after an Offering Period has commenced shall
not be eligible to participate in such Offering but may participate in any
subsequent Offering provided such Employee is still an Eligible Employee as of
the commencement of any such subsequent Offering.  Eligible Employees may not participate in
more than one Offering at a time.  In the
event the first or last day of an Offering Period is not a business day, the
Company shall specify the business day that will be deemed the first or last
day, as the case may be, of the Offering Period.

 

6.2           Purchase Periods.  Each Offering Period shall consist of four (4) consecutive
purchase periods of approximately six (6) months duration (individually, a
“Purchase Period”).  The Purchase Period commencing on the
Offering Date of the Initial Offering Period shall end on April 30,
1996.  A Purchase Period commencing on
the first day of May shall end on the last day of the next following
October.  A Purchase Period commencing on
the first day of November shall end on the last day of the next following
April.  Notwithstanding the foregoing,
the Board may establish a different term for one or more Purchase Periods or
different commencing or ending dates for such Purchase Periods.  In the event the first or last day of a
Purchase Period is not a business day, the Company shall specify the business
day that will be deemed the first or last day, as the case may be, of the Purchase
Period.

 

6.3           Governmental Approval; Stockholder Approval.  Notwithstanding any other provision of the
Plan to the contrary, any Purchase Right granted pursuant to the Plan shall be
subject to (a) obtaining all necessary governmental approvals or
qualifications of the sale or issuance of the Purchase Rights or the shares of
Stock and (b) obtaining stockholder approval of the Plan.  Notwithstanding the foregoing, stockholder
approval shall not be necessary in order to grant any Purchase Right granted in
the Plan’s Initial Offering Period; provided, however, that the exercise of any
such Purchase Right shall be subject to obtaining stockholder approval of the
Plan.

 

7.             Participation in the Plan.

 

7.1           Initial Participation.  An Eligible Employee shall become a
Participant on the first Offering Date after satisfying the eligibility
requirements of Section 5 and delivering to the Company’s payroll office
or other office designated by the Company not later than the close of business
for such office on the last business day before such Offering Date (the “Subscription Date”) a subscription agreement indicating the
Employee’s election to participate in the Plan and authorizing payroll
deductions.  An Eligible Employee who
does not deliver a subscription agreement to the Company’s payroll or other designated
office on or before the Subscription Date shall not participate in the Plan for
that Offering Period or for any subsequent Offering Period unless such Employee
subsequently enrolls in the Plan by filing a subscription agreement with the
Company by the Subscription Date for such subsequent Offering Period.  The Company may, from time to time, change
the Subscription Date as deemed advisable by the Company in its sole discretion
for proper administration of the Plan.

 

7.2           Continued Participation.  A Participant shall automatically participate
in the Offering Period commencing immediately after the final Purchase Date of
each Offering Period in which the Participant participates until such time as
such Participant (a) ceases to be an Eligible Employee, (b) withdraws
from the Plan pursuant to Section 13.2 or (c) terminates employment
as provided in Section 14.  If a
Participant automatically may participate in a subsequent Offering Period
pursuant to this Section 7.2, then the Participant is not required to file
any additional subscription agreement for such subsequent Offering Period in
order to continue participation in the Plan.  
However, a Participant may file a subscription agreement with respect to
a subsequent Offering Period if the Participant desires to change any of the
Participant’s elections contained in the Participant’s then effective
subscription agreement.

 

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8.             Right to Purchase Shares.

 

8.1           Purchase Right.  Except as set forth below, during an Offering
Period each Participant in such Offering Period shall have a Purchase Right
consisting of the right to purchase that number of whole shares of Stock
arrived at by dividing Fifty Thousand Dollars ($50,000) by the Fair Market
Value of a share of Stock on the Offering Date of such Offering Period;
provided, however, that such number shall not exceed 7,500 shares (the “Offering Share Limit”). 
Shares of Stock may only be purchased through a Participant’s payroll
deductions pursuant to Section 10.

 

8.2           Pro Rata Adjustment of Purchase Right.  Notwithstanding the foregoing, if the Board
shall establish an Offering Period of less than twenty-three and one-half (231⁄2)
months in duration or more than twenty-four and one-half (241⁄2) months in
duration, (a) the dollar amount in Section 8.1 shall be determined by
multiplying $2,083.33 by the number of months in the Offering Period and
rounding to the nearest whole dollar, and (b) the Offering Share Limit
shall be determined by multiplying 312.5 shares by the number of months in the
Offering Period and rounding to the nearest whole share.  For purposes of the preceding sentence,
fractional months shall be rounded to the nearest whole month.

 

9.             Purchase Price.  The Purchase
Price at which each share of Stock may be acquired in a given Offering Period
pursuant to the exercise of all or any portion of a Purchase Right granted
under the Plan shall be set by the Board; provided, however, that the Purchase
Price shall not be less than eighty-five percent (85%) of the lesser of (a) the
Fair Market Value of a share of Stock on the Offering Date of the Offering
Period, or (b) the Fair Market Value of a share of Stock on the Purchase
Date of the Offering Period.  Unless
otherwise provided by the Board prior to the commencement of an Offering
Period, the Purchase Price for that Offering Period shall be eighty-five
percent (85%) of the lesser of (a) the Fair Market Value of a share of
Stock on the Offering Date of the Offering Period, or (b) the Fair Market
Value of a share of Stock on the Purchase Date of the Offering Period.

 

10.           Accumulation of Purchase
Price through Payroll Deduction.  Shares of Stock which are acquired pursuant
to the exercise of all or any portion of a Purchase Right for an Offering
Period may be paid for only by means of payroll deductions from the Participant’s
Compensation accumulated during the Offering Period.  Except as set forth below, the amount of
Compensation to be deducted from a Participant’s Compensation during each pay
period shall be determined by the Participant’s subscription agreement.

 

10.1         Commencement of Payroll Deductions.  Payroll deductions shall commence on the
first payday following the Offering Date and shall continue to the end of the
Offering Period unless sooner altered or terminated as provided in the Plan.

 

10.2         Limitations on Payroll Deductions.  The amount of payroll deductions with respect
to the Plan for any Participant during any pay period shall be in one percent
(1%) increments not to exceed ten percent (10%) of the Participant’s
Compensation for such pay period. 
Notwithstanding the foregoing, the Board may change the limits on
payroll deductions effective as of a future Offering Date, as determined by the
Board.  Amounts deducted from
Compensation shall be reduced by any amounts contributed by the Participant and
applied to the purchase of Company stock pursuant to any other employee stock
purchase plan qualifying under Section 423 of the Code.

 

10.3         Election to Change or Stop Payroll Deductions.  During an Offering Period, a Participant may
elect to increase or decrease the amount deducted or stop deductions from his
or her Compensation by filing an amended subscription agreement with the
Company on or before the “Change Notice Date.” 
The “Change Notice Date” shall initially
be the seventh (7th) day prior to the end of the first pay period for which
such election is to be effective; however, the Company may change such Change
Notice Date from time to time.  A
Participant who elects to decrease the rate of his or her payroll deductions to
zero percent (0%) shall nevertheless remain a Participant in the current
Offering Period unless such Participant subsequently withdraws from the
Offering or the Plan as provided in Sections 13.1 and 13.2, respectively,
or is automatically withdrawn from the Offering as provided in Section 13.4.

 

10.4         Participant Accounts.  Individual Plan accounts shall be maintained
for each Participant.  All payroll
deductions from a Participant’s Compensation shall be credited to such account
and shall be deposited 

 

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with the general funds of the Company. 
All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose.

 

10.5         No Interest Paid.  Interest shall not be paid on sums deducted
from a Participant’s Compensation pursuant to the Plan.

 

10.6         Company Established Procedures.  The Company may, from time to time, establish
or change (a) a minimum required payroll deduction amount for
participation in an Offering, (a) limitations on the frequency or number
of changes in the rate of payroll deduction during an Offering, (c) an
exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, (d) payroll deduction in excess of or less than the amount
designated by a Participant in order to adjust for delays or mistakes in the
Company’s processing of subscription agreements, (e) the date(s) and
manner by which the Fair Market Value of a share of Stock is determined for
purposes of administration of the Plan, or (vi) such other limitations or
procedures as deemed advisable by the Company in the Company’s sole discretion
which are consistent with the Plan and in accordance with the requirements of Section 423
of the Code.

 

11.           Purchase of Shares.

 

11.1         Exercise of Purchase Right.  On each Purchase Date of an Offering Period,
each Participant who has not withdrawn from the Offering or whose participation
in the Offering has not terminated on or before such Purchase Date shall
automatically acquire pursuant to the exercise of the Participant’s Purchase
Right the number of whole shares of Stock arrived at by dividing the total
amount of the Participant’s accumulated payroll deductions for the Purchase
Period by the Purchase Price; provided, however, in no event shall the number
of shares purchased by the Participant during an Offering Period exceed the
number of shares subject to the Participant’s Purchase Right.  No shares of Stock shall be purchased on a
Purchase Date on behalf of a Participant whose participation in the Offering or
the Plan has terminated on or before such Purchase Date.

 

11.2         Return of Cash Balance.  Any cash balance remaining in the Participant’s
Plan account shall be refunded to the Participant as soon as practicable after
the Purchase Date.  In the event the cash
to be returned to a Participant pursuant to the preceding sentence is an amount
less than the amount necessary to purchase a whole share of Stock, the Company
may establish procedures whereby such cash is maintained in the Participant’s
Plan account and applied toward the purchase of shares of Stock in the
subsequent Purchase Period or Offering Period.

 

11.3         Tax Withholding.  At the time a Participant’s Purchase Right is
exercised, in whole or in part, or at the time a Participant disposes of some
or all of the shares of Stock he or she acquires under the Plan, the
Participant shall make adequate provision for the foreign, federal, state and
local tax withholding obligations of the Participating Company Group, if any,
which arise upon exercise of the Purchase Right or upon such disposition of
shares, respectively.  The Participating
Company Group may, but shall not be obligated to, withhold from the Participant’s
compensation the amount necessary to meet such withholding obligations.

 

11.4         Expiration of Purchase Right.  Any portion of a Participant’s Purchase Right
remaining unexercised after the end of the Offering Period to which such
Purchase Right relates shall expire immediately upon the end of such Offering
Period.

 

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12.           Limitations on Purchase of
Shares; Rights as a Stockholder.

 

12.1         Fair Market Value Limitation.  Notwithstanding any other provision of the
Plan, no Participant shall be entitled to purchase shares of Stock under the
Plan (or any other employee stock purchase plan which is intended to meet the
requirements of Section 423 of the Code sponsored by the Company or a
Parent Corporation or Subsidiary Corporation) at a rate which exceeds $25,000
in Fair Market Value, which Fair Market Value is determined for shares
purchased during a given Offering Period as of the Offering Date for such
Offering Period (or such other limit as may be imposed by the Code), for each
calendar year in which the Participant participates in the Plan (or any other
employee stock purchase plan described in this sentence).

 

12.2         Pro Rata Allocation.  In the event the number of shares of Stock
which might be purchased by all Participants in the Plan exceeds the number of
shares of Stock available in the Plan, the Company shall make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Company shall determine to be equitable.

 

12.3         Rights as a Stockholder and Employee.  A Participant shall have no rights as a
stockholder by virtue of the Participant’s participation in the Plan until the
date of the issuance of a stock certificate for the shares of Stock being
purchased pursuant to the exercise of the Participant’s Purchase Right.  No adjustment shall be made for cash
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate is issued. 
Nothing herein shall confer upon a Participant any right to continue in
the employ of the Participating Company Group or interfere in any way with any
right of the Participating Company Group to terminate the Participant’s
employment at any time.

 

13.           Withdrawal.

 

13.1         Withdrawal From an Offering.  A Participant may withdraw from an Offering
by signing and delivering to the Company’s payroll or other designated office a
written notice of withdrawal on a form provided by the Company for such
purpose.  Such withdrawal may be elected
at any time prior to the end of an Offering Period; provided, however, if a
Participant withdraws after a Purchase Date, the withdrawal shall not affect
shares of Stock acquired by the Participant on such Purchase Date.  Unless otherwise indicated, withdrawal from
an Offering shall not result in a withdrawal from the Plan or any succeeding
Offering therein.  By withdrawing from an
Offering effective as of the close of a given Purchase Date, a Participant may
have shares of Stock purchased on such Purchase Date and immediately commence
participation in the new Offering commencing immediately after such Purchase
Date.  A Participant is prohibited from
again participating in an Offering at any time following withdrawal from such
Offering.  The Company may impose, from
time to time, a requirement that the notice of withdrawal be on file with the
Company’s payroll office or other designated office for a reasonable period
prior to the effectiveness of the Participant’s withdrawal from an Offering.

 

13.2         Withdrawal from the Plan.  A Participant may withdraw from the Plan by
signing and delivering to the Company’s payroll office or other designated
office a written notice of withdrawal on a form provided by the Company for
such purpose.  Withdrawals made after a
Purchase Date shall not affect shares of Stock acquired by the Participant on
such Purchase Date.  In the event a
Participant voluntarily elects to withdraw from the Plan, the Participant may
not resume participation in the Plan during the same Offering Period, but may
participate in any subsequent Offering under the Plan by again satisfying the
requirements of Sections 5 and 7.1. 
The Company may impose, from time to time, a requirement that the notice
of withdrawal be on file with the Company’s payroll office or other designated
office for a reasonable period prior to the effectiveness of the Participant’s
withdrawal from the Plan.

 

13.3         Return of Payroll Deductions.  Upon a Participant’s withdrawal from an
Offering or the Plan pursuant to Sections 13.1 or 13.2, respectively, the
Participant’s accumulated payroll deductions which have not been applied toward
the purchase of shares of Stock shall be returned as soon as practicable after
the withdrawal, without the payment of any interest, to the Participant, and
the Participant’s interest in the Offering or the Plan, as applicable, shall
terminate.  Such accumulated payroll
deductions may not be applied to any other Offering under the Plan.

 

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13.4         Automatic Withdrawal From an Offering.  If the Fair Market Value of a share of Stock
on a Purchase Date of an Offering (other than the final Purchase Date of such
Offering) is less than the Fair Market Value of a share of Stock on the
Offering Date for such Offering, then every Participant shall automatically (a) be
withdrawn from such Offering at the close of such Purchase Date and after the
acquisition of shares of Stock for such Purchase Period and (b) be
enrolled in the Offering commencing on the first business day subsequent to
such Purchase Period.  A Participant may
elect not to be automatically withdrawn from an Offering Period pursuant to
this Section 13.4 by delivering to the Company not later than the close of
business on the last day before the Purchase Date a written notice indicating
such election.

 

13.5         Waiver of Withdrawal Right.  The Company may, from time to time, establish
a procedure pursuant to which a Participant may elect, at least six (6) months
prior to a Purchase Date, to have all payroll deductions accumulated in his or
her Plan account as of such Purchase Date applied to purchase shares of Stock
under the Plan, and (a) to waive his or her right to withdraw from the
Offering or the Plan and (b) to waive his or her right to increase,
decrease, or cease payroll deductions under the Plan from his or her
Compensation during the Purchase Period ending on such Purchase Date.  Such election shall be made in writing on a
form provided by the Company for such purpose and must be delivered to the
Company not later than the close of business on the day preceding the date
which is six (6) months before the Purchase Date for which such election
is to first be effective.

 

14.           Termination of Employment
or Eligibility. 
Termination of a Participant’s employment with the Company for any
reason, including retirement, disability or death or the failure of a
Participant to remain an Eligible Employee, shall terminate the Participant’s
participation in the Plan immediately. 
In such event, the payroll deductions credited to the Participant’s Plan
account since the last Purchase Date shall, as soon as practicable, be returned
to the Participant or, in the case of the Participant’s death, to the
Participant’s legal representative, and all of the Participant’s rights under
the Plan shall terminate.  Interest shall
not be paid on sums returned to a Participant pursuant to this Section 14.  A Participant whose participation has been so
terminated may again become eligible to participate in the Plan by again
satisfying the requirements of Sections 5 and 7.1.

 

15.           Transfer of Control.

 

15.1         Definitions.

 

(a)           An “Ownership Change Event” shall be deemed to have occurred if
any of the following occurs with respect to the Company:  (i) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the
Company; (ii) a merger or consolidation in which the Company a party; (iii) the
sale, exchange, or transfer of all or substantially all of the assets of the
Company; or (iv) a liquidation or dissolution of the Company.

 

(b)           A “Transfer of Control” shall mean an Ownership Change Event or
a series of related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporation(s)”), as the
case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one
or more subsidiary corporations.  The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

 

15.2         Effect of Transfer of Control on Purchase Rights.  In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the “Acquiring
Corporation”), may assume the Company’s rights and obligations under
the Plan or substitute substantially equivalent Purchase Rights for stock of
the Acquiring Corporation.  If the
Acquiring Corporation elects not to assume or substitute for the outstanding
Purchase Rights, the Board may, in its sole discretion and notwithstanding any
other provision herein to the contrary, adjust the Purchase Date of the then
current Purchase 

 

8

 

Period to a date on or before the date of the Transfer of Control, but
shall not adjust the number of shares of Stock subject to any Purchase
Right.  All Purchase Rights which are
neither assumed or substituted for by the Acquiring Corporation in connection
with the Transfer of Control nor exercised as of the date of the Transfer of
Control shall terminate and cease to be outstanding effective as of the date of
the Transfer of Control.  Notwithstanding
the foregoing, if the corporation the stock of which is subject to the
outstanding Purchase Rights immediately prior to an Ownership Change Event
described in Section 15.1(a)(i) constituting a Transfer of Control is
the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power
of its voting stock is held by another corporation or by other corporations
that are members of an affiliated group within the meaning of Section 1504(a) of
the Code without regard to the provisions of Section 1504(b) of the
Code, the outstanding Purchase Rights shall not terminate unless the Board
otherwise provides in its sole discretion.

 

16.           Nontransferability of
Purchase Rights.  A
Purchase Right may not be transferred in any manner otherwise than by will or
the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by the Participant.  The Company, in its absolute discretion, may
impose such restrictions on the transferability of the shares purchasable upon
the exercise of a Purchase Right as it deems appropriate and any such
restriction shall be set forth in the respective subscription agreement and may
be referred to on the certificates evidencing such shares.

 

17.           Reports.  Each Participant who exercised all or part of
his or her Purchase Right for a Purchase Period shall receive, as soon as
practicable after the Purchase Date of such Purchase Period, a report of such
Participant’s Plan account setting forth the total payroll deductions
accumulated, the number of shares of Stock purchased, the Purchase Price for
such shares, the date of purchase and the remaining cash balance to be refunded
or retained in the Participant’s Plan account pursuant to Section 11.2, if
any.  Each Participant shall be provided
information concerning the Company equivalent to that information generally
made available to the Company’s common stockholders.

 

18.           Restriction on Issuance of
Shares.  The issuance of
shares under the Plan shall be subject to compliance with all applicable
requirements of foreign, federal or state law with respect to such
securities.  A Purchase Right may not be
exercised if the issuance of shares upon such exercise would constitute a
violation of any applicable foreign, federal or state securities laws or other
law or regulations.  In addition, no
Purchase Right may be exercised unless (a) a registration statement under
the Securities Act of 1933, as amended, shall at the time of exercise of the
Purchase Right be in effect with respect to the shares issuable upon exercise
of the Purchase Right, or (b) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the Purchase Right may be issued
in accordance with the terms of an applicable exemption from the registration
requirements of said Act.  The inability
of the Company to obtain from any regulatory body having jurisdiction the
authority, if any, deemed by the Company’s legal counsel to be necessary to the
lawful issuance and sale of any shares under the Plan shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained.  As a condition to the exercise of a Purchase
Right, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation, and to make any representation or warranty with
respect thereto as may be requested by the Company.

 

19.           Legends.  The Company may at any time place legends or
other identifying symbols referencing any applicable foreign, federal or state
securities law restrictions or any provision convenient in the administration
of the Plan on some or all of the certificates representing shares of Stock
issued under the Plan.  The Participant
shall, at the request of the Company, promptly present to the Company any and
all certificates representing shares acquired pursuant to a Purchase Right in
the possession of the Participant in order to carry out the provisions of this
Section.  Unless otherwise specified by
the Company, legends placed on such certificates may include but shall not be
limited to the following:

 

“THE
SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE
REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE
PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.  THE TRANSFER AGENT FOR THE
SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION 

 

9

 

IMMEDIATELY OF ANY
TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF MADE ON OR BEFORE               ,
19  .  THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S NAME
(AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE.”

 

20.           Notification of Sale of
Shares.  The Company may
require the Participant to give the Company prompt notice of any disposition of
shares acquired by exercise of a Purchase Right within two years from the date
of granting such Purchase Right or one year from the date of exercise of such
Purchase Right.  The Company may require
that until such time as a Participant disposes of shares acquired upon exercise
of a Purchase Right, the Participant shall hold all such shares in the
Participant’s name (and not in the name of any nominee) until the lapse of the
time periods with respect to such Purchase Right referred to in the preceding
sentence.  The Company may direct that
the certificates evidencing shares acquired by exercise of a Purchase Right
refer to such requirement to give prompt notice of disposition.

 

21.           Amendment or Termination
of the Plan.  The Board
may at any time amend, suspend or terminate the Plan, except that (a) no
such amendment, suspension or termination shall affect Purchase Rights
previously granted under the Plan unless expressly provided by the Board and (b) no
such amendment, suspension or termination may adversely affect a Purchase Right
previously granted under the Plan without the consent of the Participant,
except to the extent permitted by the Plan or as may be necessary to qualify
the Plan as an employee stock purchase plan pursuant to Section 423 of the
Code or to comply with any applicable law, regulation or rule.  In addition, an amendment to the Plan must be
approved by the stockholders of the Company within twelve (12) months of the
adoption of such amendment if such amendment would authorize the sale of more
shares than are then authorized for issuance under the Plan or would change the
definition of the corporations that may be designated by the Board as
Participating Companies.  Notwithstanding
the foregoing, in the event that the Board determines that continuation of the
Plan or an Offering would result in unfavorable financial accounting
consequences to the Company as a result of a change after April 21, 2004
in the generally accepted accounting principles applicable to the Plan, the
Board may, in its discretion and without the consent of any Participant,
including with respect to an Offering Period then in progress which commenced
on or after April 21, 2004: (a) terminate the Plan or any Offering
Period, (b) accelerate the Purchase Date of any Offering Period, (c) reduce
the discount applicable in determining the Purchase Price of any Offering
Period, (d) reduce the maximum number of shares of Stock that may be
purchased in any Offering Period or (e) take any combination of the
foregoing actions.

 

22.           Continuation of Initial
Plan as to Outstanding Purchase Rights.  Any other provision of the Plan to the
contrary notwithstanding, the terms of the Initial Plan shall remain in effect
and apply to all Purchase Rights granted pursuant to the Initial Plan.

 

10

 

ZORAN CORPORATION

1995 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

 

o                                    Original
Application for participation commencing with the Offering Period beginning
                                                  ,
200    .

 

o                                    Change
in Percentage of Payroll Deductions effective with the pay period ending
                                                  ,
200    .

 

I hereby elect to participate in the 1995 Employee Stock Purchase Plan
(the “Plan”) of Zoran Corporation (the “Company”) and subscribe to purchase shares of the Company’s
common stock as determined in accordance with the terms of the Plan.

 

I hereby authorize payroll deductions in the amount of
             
percent (in 1% increments not to exceed 10%) of my “Compensation”
(as defined in the Plan) from each paycheck throughout the “Offering Period” (as defined in the Plan) in accordance with
the terms of the Plan.  I understand that
these payroll deductions will be accumulated for the purchase of shares of
common stock of the Company at the applicable purchase price determined in
accordance with the Plan.  I further
understand that, except as otherwise set forth in the Plan, shares will be
purchased for me automatically on the last day of each Purchase Period unless I
withdraw from the Plan or from the Offering by giving written notice to the
Company or unless I terminate employment.

 

I further understand that I will automatically participate in each
subsequent Offering which commences immediately after the last day of an
Offering in which I am participating under the Plan until such time as I file
with the Company a notice of withdrawal from the Plan on such form as may be
established from time to time by the Company or I terminate employment.

 

Shares purchased for me under the Plan should be issued in the name set
forth below.  (I understand that shares
may be issued either in my name alone or together with my spouse as community
property or in joint tenancy.)

 

	
  NAME:

  	
   

  	
   

  
	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MY SOCIAL SECURITY NUMBER:

  	
   

  
						

 

I hereby authorize withholding from my compensation in order to satisfy
the foreign, federal, state and local tax withholding obligations, if any,
which may arise upon my purchase of shares under the Plan and/or upon my
disposition of shares I acquired under the Plan.  I hereby agree that until I dispose of the
shares, unless otherwise permitted by the Company, I will hold all shares I
acquire under the Plan in the name entered above (and not in the name of any
nominee) for at least two (2) years from the first day of the Offering
Period in which, and at least one (1) year from the Purchase Date on
which, I acquired such shares.  I further
agree that I will promptly notify the Chief Financial Officer of the Company in
writing of any transfer of such shares prior to the end of the periods referred
to in the preceding sentence.

 

I am familiar with the provisions of the Plan and hereby agree to
participate in the Plan subject to all of the provisions thereof.  I understand that the Board of Directors of
the Company reserves the right to amend the Plan and my right to purchase stock
under the Plan as may be necessary to qualify the Plan as an employee stock
purchase plan as defined in Section 423 of the Internal Revenue Code of
1986, as amended, or to obtain qualification or registration of the Company’s
common stock to be issued out of the Plan under applicable foreign, federal and
state securities laws.  I understand that
the effectiveness of this subscription agreement is dependent upon my eligibility
to participate in the Plan.

 

	
  Date:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name Printed:

  	
   

  
						

 

 

ZORAN CORPORATION

1995 EMPLOYEE STOCK PURCHASE PLAN
(“ESPP”)

ENROLLMENT/CHANGE NOTICE/WITHDRAWAL FORM

 

	
  SECTION 1

  	
   

  	
  
  Action

  

  	
   

  	
  
  Complete
  Sections:

  

  
	
  ACTION

  	
  o

  	
  New Enrollment

  	
  2, 3, 7 and
  attached Subscription Agreement

  
	
   

  	
  o

  	
  Change Payroll Deduction Rate

  	
  2, 4, 7

  
	
   

  	
  o

  	
  Terminate Payroll Deductions Only

  	
  2, 5, 7

  
	
   

  	
  o

  	
  Withdraw from ESPP

  	
  2, 6, 7

  
						

 

	
  SECTION 2

  	
   

  	
  Name

  	
   

  	
   

  	
   

  	
   

  
	
  PERSONNEL DATA

  	
   

  	
   

  	
  Last

  	
  First

  	
  MI

  	
  Location

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Home Address

  	
   

  	
   

  
	
   

  	
  Street

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  City

  	
  State

  	
  Zip Code

  	
   

  
	
  EE#

  	
   

  	
   

  	
   

  	
   

  	
   

  
																

 

	
  SECTION 3

  	
   

  	
  Effective with the Offering Period

  Beginning:

  	
  I elect a Payroll Deduction Rate of
                    
  % of my Compensation* per pay period.

  
	
   

  	
   

  
	
  NEW ENROLLMENT

  	
  o

  	
  First business day of
  May                         

  	
  

  * Must be a multiple of 1% up to a maximum of 10% of
  Compensation (as defined by the ESPP).

  
	
   

  	
   

  
	
  o

  	
  First business day of
  November                          

  

 

	
  SECTION 4

  	
   

  	
  Effective with the 

  Pay Period Beginning:

  	
   

  	
   

  	
  I elect a Payroll Deduction Rate of
                    
  % of my Compensation* per pay period.

  
	
  CHANGE

  	
   

  
	
  PAYROLL DEDUCTIONS

  	
   

  	
  Month, Day and
  Year

  	
   

  	
  

  * Must be a multiple of 1% up to a maximum of 10% of
  Compensation (as defined by the ESPP).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  You may reduce your payroll deduction rate once per
  6-month Purchase Period to become effective as soon as possible following the
  filing of this change notice.  You may
  not increase your payroll deduction rate during your enrollment in an
  Offering Period.  

  
							

 

	
  SECTION 5

  	
   

  	
  Effective with the 

  Pay Period Beginning:

  	
   

  	
   

  	
  I elect to terminate my payroll deductions under the
  ESPP (i.e., reduce my payroll deduction rate to 0%) effective as soon as
  possible following the filing of this change notice.  I understand that by making this election,
  I will remain a participant in the current Offering Period and I will not
  receive a refund of my ESPP account balance, which will be applied to the
  purchase of shares on the next Purchase Date, unless I withdraw from the
  ESPP.

  
	
  TERMINATE 

  	
   

  
	
  PAYROLL DEDUCTIONS ONLY

  	
   

  	
  Month, Day and
  Year

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTE:

  	
  If your employment terminates for any reason or you
  become ineligible to participate in the ESPP, you will immediately cease to
  participate in the ESPP, and your ESPP account balance will automatically be
  refunded to you.

  
							

 

	
  SECTION 6

  	
   

  	
  I elect to terminate my payroll deductions under the
  ESPP effective as soon as possible following the filing of this change
  notice.  I have indicated below whether
  I wish to immediately terminate my participation in the ESPP and to have my
  accumulated ESPP account balance refunded to me as soon as practicable or to
  have my accumulated ESPP account balance applied to the purchase of shares on
  the next Purchase Date and immediately thereafter to terminate my
  participation in the ESPP.

  
	
   

  	
   

  

 

	
  WITHDRAW FROM ESPP

  	
  o                                    Immediately
  terminate my participation and refund ESPP account balance

  
	
   

  	
  OR

  
	
   

  	
  o                                    Purchase shares
  on the next Purchase Date and then terminate my participation

  
	
   

  	
   

  
	
   

  	
  NOTE:

  	
  By making this election, you will not participate in future Offering
  Periods unless you are eligible to participate in the ESPP and re-enroll by
  delivering a new Enrollment Form and Subscription Agreement.  If your employment terminates for any
  reason or you become ineligible to participate in the ESPP, you will immediately
  cease to participate in the ESPP, and your ESPP account balance will
  automatically be refunded to you.

  

 

	
  SECTION 7

  	
   

  	
  I hereby authorize the specific
  action indicated above.  I understand
  that my election is subject to the terms and conditions of the ESPP.  I further understand that my election will
  remain in effect for the current and subsequent Offering Periods unless and
  until I submit a new Enrollment/Change Notice/Withdrawal Form.

  
	
  AUTHORIZATION

  
	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Signature of Employee

  
					

 

 

ZORAN CORPORATION

1995 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

 

I hereby elect to participate in the Zoran Corporation 1995 Employee
Stock Purchase Plan (“ESPP”) commencing with the Offering Period specified by
my attached Enrollment/Change Notice/Withdrawal Form, and I hereby subscribe to
purchase shares of common stock of Zoran Corporation (the “Company”) in
accordance with the provisions of this Subscription Agreement and the ESPP.

 

I hereby authorize payroll deductions from each of my paychecks following
the commencement of my participation in the ESPP at the rate specified in my
attached Enrollment/Change Notice/Withdrawal Form.  I understand that these payroll deductions
will be accumulated for the purchase of shares of common stock of the Company
at the applicable purchase price determined in accordance with the ESPP and
subject to certain restrictions described in the ESPP.  I further understand that, except as
otherwise set forth in the ESPP, I will automatically purchase shares on the
last day of each Purchase Period unless I withdraw from the ESPP by giving
written notice to the Company or unless my employment terminates or I become
ineligible to participate in the ESPP.

 

I further understand that I will automatically participate in each subsequent
Offering Period that commences immediately after the last day of an Offering
Period in which I am participating until I withdraw from the ESPP by giving
written notice on a new Enrollment/Change Notice/Withdrawal Form or my
eligibility or employment terminates.

 

Each Offering Period is divided into a series of consecutive Purchase
Periods.  Unless otherwise determined by
the Board of Directors, Purchase Periods will each generally be approximately
six months in duration and will run from the first business day of May to
the last business day of October each year and from the first business day
of November to the last business day of April in the following
year.  My participation will automatically
continue in effect from one Purchase Period to the next in accordance with my
payroll deduction authorization, unless I change the rate of my payroll
deductions, withdraw from the ESPP, cease to be an employee or become
ineligible to participate in the ESPP.  I
understand that I may reduce the rate of my payroll deductions on one occasion
per Purchase Period, and that I may not increase my payroll deduction rate
during an Offering Period that I am enrolled in.

 

I understand that I may withdraw from the ESPP at any time prior to the
last business day of a Purchase Period and elect either to have the Company
refund as soon as practicable all my accumulated payroll deductions not
previously applied to the purchase of shares or to have such payroll deductions
applied to the purchase of shares at the end of such Purchase Period and
immediately thereafter to terminate my participation in the ESPP.  I further understand that if I withdraw from
the ESPP, I may not again participate in the same Offering Period.  I may participate in any subsequent Offering
Period if am eligible to participate and submit a new Enrollment/Change
Notice/Withdrawal Form making a timely election to participate in the
ESPP.

 

The Company will issue the shares I purchase under the ESPP after the
end of each Purchase Period.  Generally,
the shares will be deposited directly in my Company-designated brokerage
account.  I hereby authorize withholding
from my compensation in order to satisfy the foreign, federal, state and local
tax withholding obligations, if any, which may arise upon my purchase of shares
under the ESPP and/or upon my disposition of shares I acquired under the
ESPP.  If I am a U.S. taxpayer, I agree
that I will promptly notify the Company in the event I transfer the shares from
my Company-designated brokerage account and/or if I subsequently transfer or
sell such shares during the period that is two (2) years after the first
day of the applicable Offering Period from which I acquired such shares or one
(1) year from the date I purchased such shares.  The Company needs to know whether you
transfer or sell your shares during this time period for U.S. tax purposes.

 

I acknowledge that the Company has the right, exercisable in its sole
discretion, to amend, suspend or terminate the ESPP at any time without my
consent to comply with any applicable law, regulation or rule.  Further, I acknowledge that the Company may
amend or terminate my purchase rights without my consent to avoid unfavorable
financial accounting consequences to the Company, as described in the ESPP.

 

I am familiar with the provisions of the ESPP and hereby agree to
participate in the ESPP subject to all of the provisions thereof.  I understand that the effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in the
ESPP.

 

	
  Date:

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name Printed:Exhibit 10.1

 

Execution
Version

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into this 23rd day of July, 2008 (the “Effective Date”), between Anthony
S. Marucci (the “Executive”) and AVANT IMMUNOTHERAPEUTICS,
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 Executive Vice President, Corporation Development,
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 July 30, 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 $250,000.00 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 Board and
communicated to the Executive within 30 days following the beginning of the
applicable fiscal year).  Commencing with
fiscal year 2009, 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 Board in good faith and in
accordance with such written goals and policies as may be agreed upon from time
to time by the Board and the Chief Executive Officer.  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.  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.

 

E.             Directors’ and
Officers’ Liability Insurance; Life Insurance.  The Company shall indemnify the Executive to
the fullest extent permitted under its by-laws. 
The Company shall purchase directors’ and officers’ liability coverage
for its senior executive officers, and the Executive shall be named as a
covered officer under such policy during the term.  The Company shall also provide US$1,000,000
of term life insurance coverage, for the benefit of the Executive’s estate or
family.

 

F.             CEO and President on an
Interim Basis.  On an interim
basis, unless and until further action is taken by the Board of Directors of
the Company, the Executive shall also hold the title of Chief Executive Officer
and President, reporting directly to the Board of Directors.  During the period that the Executive serves
the Company in such interim capacity (the “Interim Period”) (and only
during that period), he shall accrue a bonus in the amount of $3,992.31 per
week (such accrued bonus, the “Interim Accrued Bonus”) commencing as of May 1,
2008.  The Interim Accrued Bonus will be
paid to the Executive at the end of each month during the Interim Period, in
arrears, with a final payment of any remaining Interim Accrued Bonus to occur
no later than thirty (30) days following the last day of the Interim Period.

 

4.             DUTIES OF THE
EXECUTIVE.

 

A.            Duties.  During the Term, the Executive shall hold the
title of Executive Vice President,
Corporate Development, shall report directly to the Chief Executive Officer
or the Board 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 Chief Executive Officer of the Company.

 

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.  It shall
not be a violation of this Agreement for the Executive to (a) serve on a
maximum of two (2) corporate, 

 

2

 

civic or charitable boards or committees, (b) deliver
lectures, fulfill speaking engagements or teach at educational institutions, (c) manage
personal investments, or (d) engage in activities permitted by the policies
of the Company or as specifically permitted by the Company, so long as such
activities do not significantly interfere with the full time performance of the
Executive’s responsibilities in accordance with this Agreement.

 

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, 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.

 

3

 

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).

 

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 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 

 

4

 

shall have ten (10) 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 ten (10) 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 ten (10) 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 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 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 at which the Executive performs duties as of the
Effective Date (which includes both the Company’s offices in Needham,
Massachusetts, and Phillipsburg, New Jersey), 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).

 

5

 

(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 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.

 

(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 determined by the
Company in its sole discretion 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.

 

6

 

(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 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

 

7

 

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 “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) twenty four (24) 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

 

8

 

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) (“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

 

9

 

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.

 

(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 the Executive’s estate any Base Salary or
Discretionary Bonus 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 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

 

10

 

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 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

 

11

 

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, including without
limitation any agreement between the Executive and any other company 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.

 

 

	
   

  	
  AVANT IMMUNOTHERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
              /s/
  Charles R. Schaller

  
	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
      /S/
  ANTHONY S. MARUCCI

  
	
   

  	
  ANTHONY S. MARUCCI, EXECUTIVE

  

 

12

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