Document:

Exhibit 10.16 

 

AMENDMENT NO. 1

 

TO

 

EMPLOYMENT AGREEMENT

 

This Amendment No. 1 to Employment Agreement
(the “Amendment”) is entered into as of June 25, 2013 by and between AmpliPhi Biosciences Corporation, a Washington
corporation (the “Company”) and Mr. Philip J. Young (the “Executive”).

 

RECITALS

 

WHEREAS, the Company and the Executive have
entered into that certain Employment Agreement dated as of October 19, 2011 (the “Agreement”), which provides that
following each time that the Company issues shares of capital stock or securities convertible into shares of capital stock until
such time as the Company has raised an aggregate of $10,000,000 after the date of the Agreement through the sale of such securities,
the Company shall issue to the Executive an additional option grant, such that the total number of shares of common stock subject
to all stock options held by the Executive shall be ten percent (10%) of the fully diluted capitalization of the Company.

 

WHEREAS, the Agreement provides that all
such options granted to the Executive shall vest and become exercisable with respect to half (50%) of the total number of shares
of each grant immediately and the other half (50%) (the “Remaining Shares”) shall vest monthly on the first day of
each subsequent month, at a rate of 1/36 of the total number of Remaining Shares per month.

 

WHEREAS, in connection with the proposed
sale and issuance of shares of Series B Preferred Stock of the Company pursuant to that certain Subscription Agreement dated as
of the date hereof; the Company and the Executive desire to amend the Agreement in order to amend the amount of stock options to
be granted to the Executive and the vesting schedule of such stock options under the Agreement.

 

NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, the Company and the Executive hereby agree to amend the Agreement as follows:

 

AMENDMENT

 

1.          Amendment
to Section 4(c). The second paragraph Section 4(c) is hereby amended and restated in its entirety to read as follows:

 

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“In addition, each time that the Company
issues shares of capital stock or securities convertible into shares of capital stock until such time as the Company has raised
an aggregate of $10,000,000 after the date of this Agreement through the sale of such securities, the Company shall issue to Executive
an additional option grant (each an “Additional Option”), such that the total number of shares of common stock subject
to the Initial Stock Option and all Additional Options held by Executive shall be ten percent (10%) of the fully diluted capitalization
of the Company, calculated as set forth above, provided that the maximum number of shares that will be included in all Additional
Options shall not exceed 11,600,000 (subject to adjustment for stock splits, stock dividends, recapitalizations and the like).
The exercise price per share of each Additional Option shall be the fair market value of such shares on the date of grant. Each
Additional Option shall vest and become exercisable with respect to one-third (1/3) of the total number of shares on the date of
grant. The remaining two-thirds (2/3) shall vest monthly on the monthly anniversary of each closing of the respective financing
that triggers the issuance of an Additional Option, at a rate of 1/36 of the total number of unvested shares remaining per month.
Vesting will be subject to acceleration as set forth in Sections 5 and 6 below.”

 

2.          Terms
of Agreement. Except as expressly modified hereby, all terms, conditions and provisions of the Agreement shall continue in
full force and effect.

 

3.          Conflicting
Terms. In the event of any inconsistency or conflict between the Agreement and this Amendment, the terms, conditions and provisions
of this Amendment shall govern and control.

 

4.          Entire
Agreement. This Amendment and the Agreement constitute the entire and exclusive agreement between the parties with respect
to the subject matter hereof. All previous discussions and agreements with respect to this subject matter are superseded by the
Agreement and this Amendment. This Amendment may be executed in counterparts, each of which shall be an original and both of which
taken together shall constitute one and the same instrument. This Amendment may be executed and delivered by facsimile and, upon
such delivery, the facsimile shall be deemed to have the same effect as if the original signature had been delivered to the other
party.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Amendment No. 1 to Employment Agreement to be executed by their duly authorized representatives, effective as of the
date first written above.

 

	COMPANY:	 	EXECUTIVE:
	 	 	 
	AmpliPhi Biosciences Corporation,	 	Phillip J. Young
	a Washington corporation	 	
	 	 	 
	By:	 	 	By:	 
	 	 	 	 	   Phillip J. Young
	Name:	 	 	
	 	 	 	 
	Title:Exhibit 10.17 

 

[On Company Letterhead]

 

October ___, 2013

 

VIA EMAIL

 

Baxter Phillips, III

8954 Tarrytown Drive

Richmond, Virginia 23229

 

Dear Mr. Phillips:

 

We are pleased to confirm our offer of employment with AmpliPhi
Biosciences Corporation (the “Company”), in the position of Vice President of Corporate Strategy and Business Development.

 

Position. As Vice President of Corporate Strategy and
Business Development, you will be responsible for the Company’s business and corporate development activities including but
not limited to technology licensing, working with the scientific and development staff to manage and advance corporate and academic
collaborations and working with the Company’s Chief Executive Officer on financing, investor relations and managing the company
intellectual property portfolio. You agree to devote your full business time and attention to your work for the Company. Except
upon the prior written consent of the Board of Directors, you will not, during your employment with the Company, (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary
advantage) that might interfere with your duties and responsibilities as a Company employee or create a conflict of interest with
the Company.

 

Salary. Your initial base salary will be $210,000 per
year, less applicable withholdings. Your salary will be reviewed from time to time in accordance with the established procedures
of the Company for adjusting salaries for similarly-situated employees and may be adjusted in the sole discretion of the Company.

 

Bonus. Effective upon your first day of employment, you
will be entitled to a sign-on bonus of $50,000. You will be eligible to earn an annual performance bonus based on achievement of
individual and Company performance objectives to be established by the Board of Directors or its Compensation Committee. Your initial
annual target performance bonus will equal 40% of your base salary, although the amount of any payment will be dependent upon actual
performance as determined by the Board of Directors or its compensation committee. The annual bonus will be pro-rated for any partial
year of employment.

 

    	 

    	 

    

 

Equity Award. In connection with your appointment as
Vice President, Corporate Strategy and Business Development, the Compensation Committee of the Board of Directors has approved,
effective upon your first day of employment, the grant to you of an option to purchase 750,000 shares of common stock (the "Option")
with an exercise price equal to the closing sales price of the common stock on the OTC Bulletin Board on your first day of employment
(the "Closing Price"). The Option will vest with respect to twelve and one-half percent (12.5%) of the shares of common
stock on the date that is six months following the date of grant and in equal monthly installments thereafter over the next forty-two
(42) months, such that the option will be fully vested and exercisable on the anniversary grant date in 2017. The Option will be
subject to the terms and conditions set forth in the Company's Equity Incentive Plan and the grant document to be entered into
between you and the Company.

 

Benefits. The Company shall provide you with medical,
life and disability insurance as follows: the Company shall (i) pay premiums in accordance with the Company's usual practices,
for all medical insurance, including but not limited to health, dental and vision coverage for you and your immediate family, (ii)
provide, at its cost, disability insurance with an annual benefit equal to seventy-five percent (75%) of your Base Salary, and
(iii) provide at its cost, term life insurance on your life with a death benefit equal to an aggregate of $1,000,000, payable to
such beneficiaries as may be designated by you in writing. Notwithstanding the foregoing, in the event
the Board of Directors concludes in its reasonable judgment that the provision of health insurance benefits to you could cause
the Company to become subject to excise tax as a result of the Patient Protection and Affordable Care Act, as amended by the Health
Care and Education Reconciliation Act of 2010 (the “Healthcare Reform Act”), the Company shall pay you a monthly
amount in cash equal to the amount of the health insurance benefit during your employment with the Company, or such other remedy
as the parties may agree.  Your benefits contemplated in this section shall be subject to the terms and conditions
of each applicable policy, and as may be amended from time to time in the Company’s sole discretion. You will be eligible
to participate in any other benefits made generally available from time to time by the Company for the employees of the Company.

 

Vacations. You shall be entitled to four (4) weeks of
vacation per annum beginning January 01, 2014, to be taken at such times and intervals as shall be determined acceptable to you
and the reasonable business needs of the Company. Accrued and unused vacation time may be carried over to subsequent years with
a maximum four weeks of carryover into any year. You shall be entitled to 5 days of vacation for the remainder of 2013.

 

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At-Will Employment; Severance. The Company is an “at-will”
employer. Accordingly, either you or the Company may terminate the employment relationship at any time, with or without advance
notice, and with or without cause. To be clear, this offer shall not be construed to guarantee employment for any particular duration
of time. However, in the event the Company terminates your employment without Cause1 prior to a Change in Control3
or you terminate your employment for “Good Reason”2 prior to a Change in Control you will be eligible to
receive severance pay in the form of salary continuation (“Severance Pay”) according to the following schedule: (i)
in the event the Company terminates your employment without Cause or you terminate your employment for Good Reason during the first
6 months of your employment with the Company, you will be eligible to receive Severance Pay in an amount equal to 6 months of your
base salary; (ii) in the event the Company terminates your employment without Cause or you terminate your employment for Good Reason
at any time after you have completed 6 months of employment with the Company, but before you have completed 12 months of employment
with the Company, you will be eligible to receive Severance Pay in an amount equal to 6 months of your base salary and an additional
month’s base salary for each month of employment completed after the first 6 months; (iii) in the event the Company terminates
your employment without Cause or you terminate your employment for Good Reason at any time after you have completed 12 months of
employment with the Company, you will be eligible to receive Severance Pay in an amount equal to 12 months of your base salary.
The Severance Pay shall be reduced dollar for dollar by any remuneration paid to you because of your employment with another employer
during the period of such payments. Self-employment, including consulting services provided by you that are less than full-time,
will not constitute employment by another employer. You agree to promptly report all such remuneration to the Company. Your eligibility
for this Severance Pay and option acceleration is conditioned upon your execution of a release of claims in a form reasonably satisfactory
to the Company (the “Release”) within forty-five (45) days following your termination date and non-revocation of the
Release during any applicable statutory revocation period. If you comply with these conditions, the Severance payments will commence
on the 60th day following your termination date. Each payment will be considered a separate payment for purposes of
Section 409A of the Internal Revenue Code of 1986. In addition, if you elect to continue group health insurance coverage upon your
separation from service, then the Company will continue to pay on your behalf the portion of the monthly premium that the Company
contributes to your healthcare premiums immediately prior to your termination of employment until the earlier of (A) your Severance
Pay schedule as previously defined or (B) the date you become eligible for health insurance in connection with your new employment.
Notwithstanding the foregoing, in the event the Board of Directors concludes in its reasonable judgment that the provision of subsidized
COBRA benefits to you could cause the Company to become subject to excise tax as a result of the Patient Protection and Affordable
Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, the Company shall pay you a monthly amount in
cash equal to the amount of the COBRA subsidy during the period the Company is obligated to provide you with subsidized COBRA benefits.
Further, you will be granted additional vesting in your Option, any additional options to purchase common stock and any restricted
stock or restricted stock units subject to vesting as if you had continued employment with the Company for an additional twelve
(12) month period.

 

 

1 For
purposes of this paragraph and document, “Cause” means (i) your gross negligence or willful failure substantially to
perform your duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) your commission of any
act of fraud, embezzlement or dishonesty against the Company or any other willful misconduct that has caused or is reasonably expected
to result in material injury to the Company; (iii) your unauthorized use or disclosure of any proprietary information or trade
secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with
the Company; or (iv) your willful breach of any of your obligations under any written agreement or covenant with the Company.

 

2For Purposes of this paragraph and document, “Good
Reason” means the occurrence at any time of any of the following without your prior written consent:  (a) removal from
the position of Vice President of Corporate Strategy and Business Development with respect to the Company resulting in the material
diminution in your authority, duties or responsibilities (other than a mere change in title following any merger or consolidation
of the Company with another entity); (b) the assignment of duties or responsibilities materially inconsistent with those customarily
associated with the position of Vice President of Corporate Strategy and Business Development or a material diminution of your
position, authority, duties or responsibilities (other than a mere change in title following any merger or consolidation of the
Company with another entity); (c) a material reduction in your Base Salary or a material reduction in any other material benefit
provided hereunder; (d) the relocation or your principal place of work to another location that increases your commute by more
than 50 miles; or (e) any willful failure or willful breach by the Company of any of the material obligations of this Agreement.
 For purposes of this subsection, no act, or failure to act, on the Company’s part shall be deemed “willful”
unless done, or omitted to be done, by the Company not in good faith and without reasonable belief that the Company’s act,
or failure to act, was in the best interest of the Company.  You may terminate your employment under this Agreement for Good
Reason at any time on or prior to the 180th day after the initial occurrence of any of the foregoing Good Reason events; provided,
however, that, within ninety (90) days of any such events having first occurred, you shall have provided the Company with notice
that such event(s) have occurred and afforded the Company thirty (30) days to cure same.

 

3 For purposes of this paragraph and document, “Change
in Control” shall mean any event so determined by the Board of Directors pursuant to any charter, bylaws or incentive
plan that also constitutes a “change in the ownership or effective control” of the Company or change in the “ownership
of a substantial portion of the assets” of the Company within the meaning of Section 409A(a)(2)(A)(v) of the Internal
Revenue Code of 1986, as amended (the “Code”). 

 

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We have determined that it is in the best interest of the Company
and its shareholders to assure that the Company will have continued dedication and objectivity of you, notwithstanding the possibility,
threat or occurrence of a Change in Control of the Company. We believe it is in the best interest of the Company and its shareholders
to retain you and provide incentives to you to continue in the service of the Company. We further believe that it is imperative
to provide you with certain benefits upon certain termination of your employment in connection with a Change in Control, which
benefits are intended to provide you with financial security and provide sufficient income and encouragement to remain with the
Company, notwithstanding the possibility of a Change in Control. To accomplish the foregoing objectives, in the event that your
employment terminates without Cause or for Good Reason within twelve (12) months following the effective date of a Change in Control,
100% of your unvested Company option shares, restricted stock or restricted stock units shall be immediately vested on such termination
date and the risk of forfeiture of 100% of your restricted stock shall lapse. Each such option shall be exercisable in accordance
with the provisions of the option agreement and plan pursuant to which such option was granted. Further, in the event that your
employment terminates without Cause or for Good Reason within twelve (12) months following the effective date of a Change in Control,
you will be entitled to receive severance benefits as follows: (C) severance payments for twelve (12) months after the effective
date of the termination (the "Severance Period") equal to the base salary which you were receiving immediately prior
to the Change in Control, which payments shall be paid during the Severance Period in accordance with the Company's standard payroll
practices; (D) a lump sum payment equal to two times your Average Annual Bonus; and (E) continuation of payment by the Company
of its portion of the health insurance benefits provided to you immediately prior to the Change in Control pursuant to the terms
of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") or other applicable laws through
the end of the Severance Period or the date upon which you are no longer eligible for such COBRA or other benefits under applicable
law. Average Annual Bonus shall mean your average annual bonus earned for performance during the Company's three (3) fiscal years
immediately preceding the Company's fiscal year in which the termination occurs; provided, however, that (i)sign-on or other special
bonuses shall not be taken into account; (ii) any bonus for a partial year shall be annualized; and (iii) if you have not been
employed for three (3) fiscal years, your target annual bonus at the time of termination shall be used for each fiscal year in
which you were not employed by the Company. For example, assume you were hired on October  1, 2013,
earned a bonus of $21,000 for 2013 and $88,000 for 2014 and had a target bonus of $92,000 for 2015.  Further assume that a
Change in Control occurred in 2015 and you experience a termination without Cause or for Good Reason within
twelve (12) months thereafter.  Your Average Annual Bonus will be equal to $88,000 or $264,000 ($21,000 x 4 for 2013 + $88,000
for 2014 + $92,000 for 2015) divided by 3.  Your eligibility for this Severance Pay and option acceleration after a
Change in Control is conditioned upon your execution of a release of claims in a form reasonably satisfactory to the Company (the
“Release”) within forty-five (45) days following your termination date and non-revocation of the Release during any
applicable statutory revocation period. If you comply with these conditions, the Severance payments will commence on the 60th
day following your termination date. The payments to be provided under clauses (C) and (D) shall
be paid or commence to be paid within sixty (60) days of your termination of employment; provided that if the sixty-day period
commences in one calendar year and ends in a second calendar year, such payment will be made or commence to be made in the second
calendar year.  Notwithstanding the foregoing, in the event the Board of Directors concludes in its reasonable judgment that
the provision of subsidized COBRA benefits to you could cause the Company to become subject to excise tax as a result of the Healthcare
Reform Act, the Company shall pay you a monthly amount in cash equal to the amount of the COBRA subsidy during the period the Company
is obligated to provide subsidized COBRA benefits to you, or such other remedy as the parties may agree.  In addition, you
will receive payment(s) for all salary, bonuses and unpaid vacation accrued as of the date of your termination of employment.

 

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If your employment is terminated for Cause at any time then
you shall not be entitled to receive payment of any severance benefits or option acceleration. You will receive payment(s) for
all salary, bonuses and unpaid vacation accrued as of the date of your termination of employment.

 

If you voluntarily resign from the Company under circumstances
which do not constitute Good Reason, then you shall not be entitled to receive payment of any severance benefits or option acceleration.
You will receive payment(s) for all salary, bonuses and unpaid vacation accrued as of the date of your termination of employment.

 

Taxes: All amounts paid under this letter shall be paid
less all applicable state and federal tax withholdings (if any) and any other withholdings required by any applicable jurisdiction
or authorized by you. Company shall have the authority to delay the payment of any amounts under this Agreement to the extent it
deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “key
employees” of publicly-traded companies); in such event, any such amount to which you would otherwise be entitled during
the six (6) month period immediately following your termination of employment with the Company will be paid in a lump sum on the
date six (6) months and one (1) day following the date of your termination of employment with the Company (or the next business
day if such date is not a business day), provided that you have complied with the requirements for such payment. You shall be treated
as having a termination of employment under this Agreement only if such termination meets the requirements of a “separation
from service” as that term is defined in Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”)
and Treas. Regs. Section 1.409A-1(h), and as amplified by any other official guidance. This Agreement is intended to comply with
the provisions of Code Section 409A; provided, however, that the Company makes no representation that the amounts payable under
this Agreement will comply with Code Section 409A and makes no undertaking to prevent Code Section 409A from applying to amounts
payable under this Agreement or to mitigate its effects on any deferrals or payments made under this Agreement.

 

Successors:  Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all
of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession.  The terms of this Agreement and all of your rights hereunder shall inure to the
benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

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Form I-9: You must establish your identity and authorization
to work as required by the Immigration Reform and Control Act of 1986 (IRCA). Enclosed is a copy of the Employment Verification
Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate original documentation on
your first day of work.

 

Entire Agreement. Please let us know of your decision
to join the Company by signing a copy of this offer letter and returning it to us not later than October __, 2013 This letter sets
forth our entire agreement and understanding regarding the terms of your employment with the Company and supersedes any prior representations
or agreements, whether written or oral. This letter may not be modified in any way except in a writing signed by a duly authorized
member of the Company’s Board of Directors and you. It shall be governed by Virginia law, without regard to principles of
conflicts of laws. Your employment is contingent upon your execution of the Company’s confidential information and inventions
assignment agreement.

 

Sincerely,

 

Philip J. Young

President and CEO

AmpliPhi Bioscience Corporation

 

	ACCEPTED AND AGREED:
	 
	 
	Baxter Phillips, III
	 
	 
	Date

 

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