Document:

Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into this 5th day of April 2006 (the “Effective
Date”), between DR. THOMAS DAVIS, whose
principal residence is located at 6275 Firethorn Lane, Clarksville, Maryland
21029 (the “Executive”), and CELLDEX THERAPEUTICS, INC., with its principal place of business
located at 222 Cameron Drive, Suite 400, 
Phillipsburg, New Jersey 08865 (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 its Senior Vice President and Chief Medical
Officer, and the Executive desires to provide such services in accordance with
the terms of this Agreement. The Parties agree that the duties and obligations
expected of the Executive and of the Company are as set forth in this
Agreement.

 

2.                                      EFFECTIVE
DATE AND TERM.  This Agreement shall
be effective, and its term (the “Term”) shall commence as of the Effective Date.
The Term shall continue through and until March 31, 2007 (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.

 

3.                                      COMPENSATION.

 

A.                                    Salary.  During the Term the
Company shall pay or cause to be paid to the Executive, in bi-weekly
installments, a salary of $300,000 per annum or such greater amount as may from
time to time be determined by the Board of Directors (the “Board”) of the
Company (the “Base Salary”). The Base Salary shall be reviewed annually by the
Board and, if appropriate, may be increased. In addition, the Executive
shall receive annual bonuses of up to 25% of Executive’s Base Salary payable
from time to time under this Section 3A in the event certain specified
objectives to be agreed upon by the Compensation Committee of the Board and the
Executive are met.

 

B.                                    Expenses.  The Company shall
reimburse the Executive, within thirty days of voucher, the amount of all
travel, hotel, entertainment and other expenses (properly vouched) reasonably
incurred by the Executive in furtherance of his duties under this Agreement.

 

C.                                    Benefits.

 

(1)                                 Vacation.
 The Executive shall be entitled to
twenty (20) business days of vacation each year. The Executive shall be
entitled to carry any unused vacation days over to the next calendar year. However,
in no event will Executive’s accrued but unused vacation exceed 40 days.

 

(2)                                 Holidays.
 The Executive shall be entitled to
all holidays generally provided to other employees of the Company.

 

 

(3)                                 Life
Insurance.  During the Term, the
Company shall, upon proof of insurability, purchase, or cause to be purchased,
a policy or policies insuring the life of the Executive payable to the
Executive’s designated beneficiary(s) at least equal to that life
insurance generally provided to other executive employees of the Company.

 

(4)                                 Medical
Insurance.  During the Term, the
Company shall acquire and pay for, or reimburse the Executive for,
hospitalization, dental, major medical, or other health insurance for the
benefit of the Executive and his dependents at least equal to that generally
provided other executive employees under the Company’s group health insurance
plan(s).

 

(5)                                 Sick
Leave/Disability.  During any period
in which the Executive is absent from work as a result of personal injury,
sickness or other disability, the Board may, by majority vote, appoint an
Acting President and Chief Executive Officer to serve for the duration of the
Executive’s absence. The Company shall, while such period continues or for 180
days, whichever is a shorter period, pay the Executive his full Base Salary. The
Executive will also be entitled to additional disability benefits at least
equal to that which is generally provided to other executive employees after
the Effective Date.

 

(6)                                 Directors’
and Officers’ Liability Insurance.  During
the Term, the Company shall acquire and pay for, or reimburse the Executive
for, directors’ and officers’ liability insurance for the benefit of the
Executive at least equal to that generally provided to other executive officers
of the Company.

 

(7)                                 Other
Benefits.  The Executive shall be
entitled to participate in any equity incentive, pension, retirement or other
qualified plans adopted by the Company for the benefit of its employees,
including, but not limited to, the Company’s stock option plans and the Company’s
tax qualified 401(k) cash or deferred compensation plans.

 

D.                                    Stock
Options.  Upon the
Effective Date, the Company shall grant to the Executive options (the “Options”)
to purchase 250,000 shares of the Company’s common stock, par value $.01 per
share (the “Common Stock”). The Options shall have an initial exercise price
equal to $5.00 per share. All Options shall be issued under the Company’s 2005
Equity Incentive Stock Plan (the “Plan”), as amended. The Options shall vest in
equal annual installments over four years from their date of grant. The Company
and the Executive shall execute appropriate stock option agreements evidencing
such grants.

 

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

 

F.                                     Representation.  During the Term, the
Executive shall well and faithfully serve the Company and use his 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 as Senior Vice President and
Chief Medical Officer. In particular, but without limiting 

 

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the
generality thereof, the Executive shall give to the President  such information regarding the affairs of the
Company as the President shall require and the Executive shall at all times conform to
the reasonable instructions or directions of the President.

 

G.                                   Time
Devoted by Executive.  The
Executive agrees to devote substantially all his 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 corporate, 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.

 

H.                                   Place
of Business.  During the Term of this
Agreement, the Executive’s place of work shall be the Company’s principal place
of business set forth above, traveling from time to time as required for the
effective execution of his duties hereunder.

 

4.                                      RESTRICTIONS
ON THE EXECUTIVE.

 

A.                                    Non-Disclosure
of Confidential Information.  All
information learned or developed by the Executive during the course of his
employment by the Company 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 Board,
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 

 

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the
Company and /or any Confidential Information. The Executive will keep, on
behalf of the Company, complete, accurate, and authentic accounts, notes, data,
and records (“Records”) of each and every Invention, which Records will, at all
times, be the property of the Company. The Executive will comply with the
directions of the Company with respect to the manner and form of keeping
or surrendering Records and will surrender to the Company all Records at the
end of the Executive’s term of employment by the Company.

 

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

 

For twelve (12) months 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 Conflict of Interest Committee of the Board, the Executive may not
directly or indirectly engage in, or have any interest in, any business
(whether as employee, officer, director, agent, a five percent (5%) or greater
security holder, creditor, consultant, or otherwise) that competes directly
with the business of the Company (as such business may exist during the
Term).

 

(2)                                 Non-Solicitation
of Orders.  During the Term, and
thereafter as specifically provided in Subsection 5.B.(2) or 5.D.(2),
the Executive shall not, whether for himself or on behalf of any other person
or company, directly or indirectly, solicit orders for the creation of
antibodies in transgenic animals from any person or company, who at any time
within the three years prior to the end of the Term was a licensee,
collaborator or customer of the Company.

 

(3)                                 Non-Solicitation of Employees.  During the Term, and thereafter as
specifically provided in Subsection 5.B.(2) or 5.D.(2), the Executive
shall not, directly or indirectly induce or solicit any other employee of the
Company to terminate his or her employment with the Company for the purpose
of  joining another company in which the 

 

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Executive
has an interest (whether as an employee, officer, director, agent, a five
percent (5%) or greater 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 4 could cause 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 Employee 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.

 

5.                                      TERMINATION.

 

A.                                  Non-Renewal.  The provisions of this
Subsection 5.A apply if the Term is not renewed pursuant to the provisions
of Section 2.

 

(1)                                 If
the Company has given notice of non-renewal, then upon the Executive’s “separation
from service” with the Company  (as such
term is defined for purposes of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”)), the Company shall pay the Executive his then
existing Base Salary and continue Executive’s benefits enumerated in
Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the extent
permitted by the Company’s insurance carriers) for one year commencing with the
day following the final day of the Term; provided, however,
that this obligation shall be mitigated by earned income and benefits actually
received by or for the account of the Executive from alternative employment
during such one year period. If the Executive is a “specified employee” (as
such term is defined for the purposes of Section 409A of the Code), then
no salary continuation payments shall be made under this paragraph until the
date that is six months after the Executive’s separation from service, and on
such date the Executive shall receive a lump sum payment equal to the amount of
salary continuation payments the Executive would have receive during such six
month period had he not been a specified employee. 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.

 

(2)                                 At
the conclusion of the Term, all other Company obligations to the Executive as
to salary and benefits shall cease.

 

(3)                                 If
the Executive has given notice of non-renewal, all Company obligations to the
Executive as to salary and benefits shall cease at the conclusion of the Term.

 

B.                                  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 5.B. 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. The Executive shall have
forty-five (45) days after receipt of such notice to cure the reason
constituting cause and if he does so, the Term shall not be terminated for the
cause 

 

5

 

specified
in the notice. During such forty-five (45) 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 forty-five (45) day period, the Executive may then
be immediately terminated by a majority vote of the Board excluding the
Executive if the Executive is then a member of the Board. For purposes of this
Agreement, the words “for cause” or “cause” shall be limited to actions on the part of
the Executive which constitute gross negligence or willful misconduct in the
performance or non-performance of the Executive’s duties or a material breach
of this Agreement by the Executive so long as such material breach is not
caused by the Company. The duties, powers and authority of the Executive may also,
on a majority vote of the Board excluding the Executive if the Executive is
then a member of the Board, be suspended for a reasonable period of time, but
with a continuation of the Executive’s full Base Salary, expenses and benefits
pursuant to this Agreement, while a determination is made as to whether cause
for termination exists.

 

(2)                                 In
the event the Term is terminated by the Company for cause, the provisions of
Subsections 4.C.(1), 4.C.(2) and 4.C.(3) 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 salary and
benefits accrued prior to termination) shall cease upon such termination.

 

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

 

(1)                                 The
Company shall have the right to terminate the Term without cause on ninety (90)
days written notice to the Executive.

 

(2)                                 The
Executive shall have the right to terminate the Term for good reason on thirty
(30) days written notice to the Company. For purposes of this Agreement, the
words “for good reason” or “good reason” shall be limited to the following
actions by the Company without the Executive’s express written 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; (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,
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 by the Executive pursuant to Subsection 5.D.(1).

 

(3)                                 In
the event the Term is terminated pursuant to Subsection 5.C.(1) or
5.C.(2), then upon the Executive’s “separation from service” with the Company
(as such term is defined for purposes of Section 409A of the Code), the
Company shall pay the Executive his 

 

6

 

then
existing Base Salary and continue Executive’s benefits enumerated in
Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the extent
permitted by the Company’s insurance carriers) for one year commencing with the
day following the effective date of the termination of the Term. If the
Executive is a “specified employee” (as such term is defined for purposes of Section 409A
of the Code), then no salary continuation payments shall be made under this
paragraph until the date that is six months after the Executive’s separation
from service, and on such date the Executive shall receive a lump sum payment
equal to the amount of salary continuation payments the Executive would have
received during such six months had he not be a specified employee.  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.

 

D.                                  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 5.C.(2) shall not be
considered a resignation pursuant to this Subsection 5.D.(1).

 

(2)                                 In
the event the Term is terminated pursuant to Subsection 5.D. (1), the
provisions of Subsections 4.C.(1), 4.C.(2) and 4.C.(3) shall continue
to apply for one year after the conclusion of the Term.

 

(3)                                 In
the event the Term is terminated pursuant to Subsection 5.D.(1), the
Executive’s entire right to salary and benefits hereunder shall cease at the
effective date of the termination of the Term.

 

E.                                  Termination
Upon Change in Control.

 

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

 

(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.

 

7

 

(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 sixty-six and two-thirds percent
(66-2/3%) 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 66 2/3% of the members of the board of
directors of the Surviving Corporation, and (iii) no Person other than (w) the
Company, (x) any Subsidiary, (y) any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or (z) any Person who, immediately prior to
such merger, consolidation or reorganization had Beneficial Ownership of
fifty-one percent (51%) or more of the then outstanding Voting Securities, has
Beneficial Ownership of fifty-one percent (51%) or more of the combined voting
power of the Surviving Corporation’s then outstanding voting securities (a
transaction described in clauses (i) and (ii) shall herein be
referred to as a “Non-Control Transaction”); (2) a complete liquidation or
dissolution of the Company; or (3) an agreement for the sale or other
disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).

 

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

 

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(2)                                 The
Executive shall have the right to terminate this Agreement, for any reason, on
thirty (30) days’ written notice to the Company in the event of a Change in
Control; provided, however, that such termination
right must be exercised by the Executive within one year following such Change
in Control. Any termination of the Term by the Company within one year
following a Change in Control shall be deemed a termination by the Executive
pursuant to the preceding sentence.

 

(3)                                 In
the event the Term is terminated by the Executive pursuant to Subsection 5.E.(2) for
any reason, 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 the date of such termination, a single
lump-sum payment in an amount equal to (i) twelve times Executive’s
highest monthly base compensation paid hereunder during the preceding
twenty-four month period, plus (ii) the Executive’s average annual bonus
received by the Executive during the preceding twenty-four month period.

 

(b)                                 Benefits:  In addition to the payment described above,
the Company shall continue to provide to Executive all benefits provided under
Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the extent
permitted by the Company’s insurance carriers) for a period of twenty-four
months after termination.

 

(c)                                  Acceleration
of Options:  All of the Executive’s
outstanding options and/or equity awards shall become fully and immediately
vested to the extent not already so provided under the terms of such options
and equity awards. 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 options until three years from the date of termination of employment or
the expiration of the stated period of the option, 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 (“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 

 

9

 

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. If the accounting firm
so engaged by the Company is also serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Company shall
appoint a nationally recognized accounting firm to make the determinations
required hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

 

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

 

F.                                   Termination
for Disability.

 

(1)                                 Should
the Executive be absent from work as a result of personal injury, sickness or
other disability as provided for in Subsection 3.C.(5) 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 5.F.(1), then,
following such Termination, the Executive shall continue to be entitled to
benefits pursuant to Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the
extent permitted by the Company’s insurance carriers) for one hundred eighty
(180) days after the conclusion of the Term. 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.

 

G.                                 Termination
Upon Death.  If not
earlier terminated, 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 accrued but remaining
unpaid prior to his death, any expenses accrued but remaining unpaid prior to
his death, and any benefits accrued but remaining unpaid prior to his death. In
addition, the 

 

10

 

Company
shall continue for the benefit of Executive’s dependents Executive’s benefits
enumerated in Subsections 3.C.(4) and 3.C.(6) hereof (to the extent permitted
by the Company’s insurance carriers) for two years commencing with the day
following Executive’s 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.

 

H.                                 COBRA.  If the Company continues
benefits for Executive and his dependents pursuant to Subsection 5.A, 5.C,
5.E, 5.F or 5.G, Executive and his dependents, as applicable, shall, upon the
request of the Company, be required to elect to receive such continued coverage
under the provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), and any analogous state law, and the Company’s
provision of such continued coverage for all purposes shall be considered
continuation coverage under COBRA and any analogous state law. In the event
Executive is required to make an election pursuant to the preceding sentence,
the Company will reimburse the Executive for his COBRA and any analogous state
law costs incurred during the periods set forth in Subsection 5.A, 5.C,
5.E, 5.F or 5.G, as applicable, unless and until Executive becomes a full-time
employee of another entity.

 

6.                                      MISCELLANEOUS.

 

A.                                  Notices.  All notices, requests,
demands, claims, and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally, telecopied,
sent by electronic mail promptly confirmed by telecopy, sent by internationally
recognized overnight courier or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the Parties at the following addresses
(or at such other address for a Party as shall be specified by like notice):

 

                                                If
to the Company, to:

 

	
  Celldex Therapeutics, Inc.

  
	
  222 Cameron Drive

  
	
  Suite 400

  
	
  Phillipsburg, NJ 08865

  
	
  Telephone: 

  	
  908-454-7120

  
	
  Facsimile:

  	
  908-454-1911

  
	
  Attention:

  	
  Corporate
  Secretary

  

 

11

 

with copies to:

 

	
  Dwight A. Kinsey, Esq.

  
	
  Satterlee Stephens Burke & Burke
  LLP

  
	
  230 Park Avenue

  
	
  New York, New York 10169

  
	
  Telephone:

  	
  212-818-9200

  
	
  Facsimile:

  	
  212-818-9606

  

 

If to the Executive, to:

 

	
  Dr. Thomas Davis

  
	
  6275 Firethorn Lane

  
	
  Clarksville, Maryland 21029

  
	
  Telephone: 

  	
  301-854-0517

  
	
  Facsimile:

  	
  301-854-0594

  
	
  Mobile:

  	
  240-793-1599

  

 

All such notices and other communications shall be deemed to have been
given and received (i) in the case of personal delivery, on the date of
such delivery, (ii) in the case of delivery by telecopy, on the date of
such delivery, (iii) in the case of delivery by electronic mail, on the
date of delivery of the confirming telecopy, (iv) in the case of delivery
by internationally recognized overnight courier, on the second Business Day
following the date when sent and (v) in the case of mailing, on the fifth
Business Day following such mailing.

 

B.                                  Disability.
 The Company
acknowledges its obligations under state and federal law to provide reasonable
accommodations to the Executive in the event of a disability, and nothing in this
Agreement is intended to relieve the Company of that responsibility.

 

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.

 

12

 

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 the transactions
to which it relates shall be governed by the laws of the State of New Jersey,
without regard to choice of laws provisions, and the Company and the Executive
irrevocably consent to the exclusive jurisdiction and venue of the federal and
state courts located within New Jersey, 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. No amendment or modification of this Agreement shall be valid or
binding upon the Parties unless in writing executed by the Parties.

 

13

 

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

 

	
   

  	
  CELLDEX THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Dr. Robert
  F. Burns

  	
   

  
	
   

  	
   

  	
  Dr. Robert F. Burns

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
        /s/ Dr. Thomas
  Davis

  	
   

  
	
   

  	
   

  	
  Dr. Thomas Davis

  	
   

  
					

 

14Exhibit 10.13

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into this 6th day of April, 2004 (the “Effective Date”),
between Tibor Keler (the “Executive”) and CELLDEX THERAPEUTICS, INC.
(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 its Vice President, Research and 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 March 31, 2005 (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.

 

3.             COMPENSATION.

 

A.            Salary.  During the Term the Company shall pay or
cause to be paid to the Executive, in bi-weekly installments, a salary of $200,000
per annum or such greater amount as may from time to time be determined by the
Board of Directors (the “Board”) of the Company (the “Base Salary”).  The Base Salary shall be reviewed annually by
the Board and, if appropriate, may be increased.  The Board may also pay the Executive such
bonuses as it deems appropriate. 
Notwithstanding the foregoing, no increase in Base Salary or bonus shall
be paid to the Executive unless and until approved by a committee of the Board,
a majority of which is comprised of Directors who are not employees of the
Company.

 

B.            Expenses.  The Company shall reimburse the Executive,
within thirty days of voucher, the amount of all travel, hotel, entertainment
and other expenses (properly vouched) reasonably incurred by the Executive in
furtherance of his duties under this Agreement.

 

C.            Benefits.

 

(1)           Vacation.  The Executive shall be entitled to twenty
(20) business days of vacation each year. 
The Executive shall be entitled to carry any unused vacation days over
to the next calendar year.  However, in
no event will Executive’s accrued but unused vacation exceed 40 days.

 

(2)           Holidays.  The Executive shall be entitled to all
holidays generally provided to other employees of the Company.

 

1

 

(3)           Life Insurance.  During the Term, the Company shall, upon
proof of insurability, purchase, or cause to be purchased, a policy or policies
insuring the life of the Executive payable to the Executive’s designated
beneficiary(s) at least equal to that life insurance generally provided to
other executive employees of the Company.

 

(4)           Medical Insurance.  During the Term, the Company shall acquire
and pay for, or reimburse the Executive for, hospitalization, dental, major
medical, or other health insurance for the benefit of the Executive and his
dependents at least equal to that generally provided other executive employees
under the Company’s group health insurance plan(s).

 

(5)           Sick Leave/Disability.  During any period in which the Executive is
absent from work as a result of personal injury, sickness or other disability,
the Board may, by majority vote, appoint an Acting Vice President, Research and
Development to serve for the duration of the Executive’s absence.  The Company shall, while such period
continues or for 180 days, whichever is a shorter period, pay the Executive his
full Base Salary.  The Executive will
also be entitled to additional disability benefits at least equal to that which
is generally provided to other executive employees after the Effective Date.

 

(6)           Directors’ and Officers’
Liability Insurance.  During the
Term, the Company shall acquire and pay for, or reimburse the Executive for,
directors’ and officers’ liability insurance for the benefit of the Executive
at least equal to that generally provided to other executive officers of the
Company.

 

(7)           Other Benefits.  The Executive shall be entitled to
participate in any equity incentive, pension, retirement or other qualified
plans adopted by the Company for the benefit of its employees, including, but not
limited to, the Company’s stock option plans and the Company’s tax-qualified
401(k) cash or deferred compensation plan.

 

4.             DUTIES OF THE
EXECUTIVE.

 

A.            Duties.  During the Term, the Executive shall be Vice President, Research and Development of
the Company, 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 his 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 as Vice
President, Research and Development. 
In particular (but without limiting the generality thereof), the
Executive shall give to the Chief Executive Officer such information regarding
the affairs of the Company as he shall require and at all times conform to the
reasonable instructions or directions of the Chief Executive Officer.

 

C.            Time Devoted by
Executive.  The Executive agrees to
devote substantially all his 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 

 

2

 

violation of this Agreement for the Executive to (a) serve
on corporate, 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 his
employment by the Company 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 

 

3

 

to the Company all right,
title, and interest of the Executive in any Patents or Patent
applications.  The Executive agrees to
cooperate with any actions necessary to continue, renew or retain the
Patents.  The Company will bear the
entire expense of applying for and obtaining the Patents.

 

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

 

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

 

C.            Non-Competition;
Non-Solicitation.

 

(1)           Non-Competition.  During the Term, without the consent of the
Conflict of Interest Committee of the Board of Directors, the Executive may not
directly or indirectly engage in, or have any interest in, any business (whether
as employee, officer, director, agent, a five percent (5%) or greater security
holder, creditor, consultant, or otherwise) that competes directly with the
business of the Company (as such business may exist during the Term).

 

(2)           Non-Solicitation of
Orders.  During the Term, and
thereafter as specifically provided in Subsection 6.B.(2) or 6.D.(2), the
Executive shall not, whether for himself or on behalf of any other person or
company, directly or indirectly, solicit orders for the creation of antibodies
in transgenic animals from any person or company, who at any time within the
year prior to the end of the Term was a licensee, collaborator or customer of
the Company.

 

(3)           Non-Solicitation of Employees.  During
the Term, and thereafter as specifically provided in Subsection 6.B.(2) or
6.D.(2), the Executive shall not, directly or indirectly induce or solicit any
other employee of the Company 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, a five percent (5%) or greater 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 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 Employee 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.

 

4

 

6.             TERMINATION.

 

A.            Non-Renewal.  The provisions of this Subsection 6.A apply
if the Term is not renewed pursuant to the provisions of Section 2.

 

(1)           If the Company has
given notice of non-renewal, the Company shall pay the Executive his then
existing Base Salary and continue Executive’s benefits enumerated in
Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the extent
permitted by the Company’s insurance carriers) for one year commencing with the
day following the final day of the Term; provided, however,
that this obligation shall be mitigated by earned income and benefits actually
received by or for the account of the Executive from alternative employment
during such one year period.  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.

 

(2)           At the conclusion
of the Term, all other Company obligations to the Executive as to salary and
benefits shall cease.

 

(3)           If the Executive
has given notice of non-renewal, all Company obligations to the Executive as to
salary and benefits shall cease at the conclusion of the Term.

 

B.            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.B.  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.  The Executive shall have
forty-five (45) days after receipt of such notice to cure the reason
constituting cause and if he does so, the Term shall not be terminated for the
cause specified in the notice.  During
such forty-five (45) 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 forty-five (45) day
period, the Executive may then be immediately terminated by a majority vote of
the Board excluding the Executive if the Executive is then a member of the
Board.  For purposes of this Agreement,
the words “for cause” or “cause” shall be limited to actions on the part of the
Executive which constitute gross negligence or willful misconduct in the
performance or non-performance of the Executive’s duties or a material breach
of this Agreement by the Executive so long as such material breach is not
caused by the Company.  The duties,
powers and authority of the Executive may also, on a majority vote of the Board
excluding the Executive if the Executive is then a member of the Board, be
suspended for a reasonable period of time, but with a continuation of the
Executive’s full Base Salary, expenses and benefits pursuant to this Agreement,
while a determination is made as to whether cause for termination exists.

 

5

 

(2)           In the event the
Term is terminated by the Company for cause, the provisions of Subsections 5.C.(2) and
5.C.(3) 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 salary and benefits
accrued prior to termination) shall cease upon such termination.

 

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

 

(1)           The Company shall
have the right to terminate the Term without cause on ninety (90) days written
notice to the Executive.

 

(2)           The Executive shall
have the right to terminate the Term for good reason on thirty (30) days
written notice to the Company.  For
purposes of this Agreement, the words “for good reason” or “good reason” shall
be limited to the following actions by the Company without the Executive’s
express written 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; (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, 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.D.(1).

 

(3)           In the event the
Term is terminated pursuant to Subsection 6.C.(1) or 6.C.(2), the Company
shall pay the Executive his then existing Base Salary and continue Executive’s
benefits enumerated in Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof
(to the extent permitted by the Company’s insurance carriers) for one year commencing
with the day following the effective date of the termination of the Term.  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.

 

D.            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.C.(2) shall
not be considered a resignation pursuant to this Subsection 6.D.(1).

 

6

 

(2)           In the event the
Term is terminated pursuant to Subsection 6.D.(1), the provisions of
Subsections 5.C.(2) and 5.C.(3) shall continue to apply for one year
after the conclusion of the Term.

 

(3)           In the event the
Term is terminated pursuant to Subsection 6.D.(1), the Executive’s entire right
to salary and benefits hereunder shall cease at the effective date of the
termination of the Term.

 

E.            Termination Upon
Change in Control.

 

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

 

(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 sixty-six and two-thirds percent (66-2/3%) 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 

 

7

 

members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least 66 2/3% of the members of the board of
directors of the Surviving Corporation, and (iii) no Person other than (w) the
Company, (x) any Subsidiary, (y) any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or (z) any Person who, immediately prior to
such merger, consolidation or reorganization had Beneficial Ownership of
fifty-one percent (51%) or more of the then outstanding Voting Securities, has
Beneficial Ownership of fifty-one percent (51%) or more of the combined voting
power of the Surviving Corporation’s then outstanding voting securities (a
transaction described in clauses (i) and (ii) shall herein be
referred to as a “Non-Control Transaction”); (2) a complete liquidation or
dissolution of the Company; or (3) an agreement for the sale or other
disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).

 

(d)           Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur solely because the
level of Beneficial Ownership held by any Person (the “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)           The Executive shall
have the right to terminate this Agreement, for any reason, on thirty (30) days’
written notice to the Company in the event of a Change in Control; provided, however, that such termination right must be
exercised by the Executive within one year following such Change in
Control.  Any termination of the Term by
the Company within one year following a Change in Control shall be deemed a
termination by the Executive pursuant to the preceding sentence.

 

(3)           In the event the
Term is terminated by the Executive pursuant to Subsection 6.E.(2) for any
reason, 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 the date of such termination, a single
lump-sum payment in an amount equal to (i) twelve times Executive’s
highest monthly base compensation paid hereunder during the preceding
twenty-four month period, plus (ii) the Executive’s average annual bonus
received by the Executive during the preceding twenty-four month period.

 

(b)           Benefits:  In addition to the payment described above,
the Company shall continue to provide to Executive all benefits provided under
Subsections 3.C.(3), 

 

8

 

3.C.(4) and 3.C.(6) hereof (to the extent
permitted by the Company’s insurance carriers) for a period of twenty-four
months after termination.

 

(c)           Acceleration of
Options:  All of the Executive’s
outstanding options and/or equity awards shall become fully and immediately
vested to the extent not already so provided under the terms of such options
and equity awards.  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 options until three years from the date of
termination of employment or the expiration of the stated period of the option,
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 (“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.  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 

 

9

 

the application of the
Reduced Amount, it shall furnish the Company and the Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to such Payment.  Any good faith
determinations of the accounting firm made hereunder shall be final, binding
and conclusive upon the Company and the Executive.

 

F.            Termination for
Disability.

 

(1)           Should the
Executive be absent from work as a result of personal injury, sickness or other
disability as provided for in Subsection 3.C.(5) 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.F.(1), then, following such
Termination, the Executive shall continue to be entitled to benefits pursuant
to Subsections 3.C.(3), 3.C.(4) and 3.C.(6) hereof (to the extent permitted
by the Company’s insurance carriers) for one hundred eighty (180) days after
the conclusion of the Term.  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.

 

G.            Termination Upon
Death.  If not earlier terminated,
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 accrued but remaining unpaid prior to his
death, any expenses accrued but remaining unpaid prior to his death, and any
benefits accrued but remaining unpaid prior to his death.  In addition, the Company shall continue for
the benefit of Executive’s dependents Executive’s benefits enumerated in
Subsections 3.C.(4) and 3.C.(6) hereof (to the extent permitted by
the Company’s insurance carriers) for two years commencing with the day
following Executive’s 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.

 

H.            COBRA.  If the Company continues benefits for
Executive and his dependents pursuant to Subsection 6.A, 6.C, 6.E, 6.F or 6.G,
Executive and his dependents, as applicable, shall, upon the request of the
Company, be required to elect to receive such continued coverage under the
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), and any analogous state law, and the Company’s provision of
such continued coverage for all purposes shall be considered continuation
coverage under COBRA and any analogous state law.  In the event Executive is required to make an
election pursuant to the preceding sentence, the Company will reimburse the
Executive for his COBRA and any analogous state law costs incurred during the
periods set forth in Subsection 6.A, 6.C, 6.E, 6.F or 6.G, as applicable,
unless and until Executive becomes a full-time employee of another entity.

 

10

 

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.            Disability.  The Company acknowledges its obligations
under state and federal law to provide reasonable accommodations to the
Executive in the event of a disability, and nothing in this Agreement is
intended to relieve the Company of that responsibility.

 

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 the transactions to which it relates shall be governed by
the laws of the State of New Jersey, without regard to choice of laws
provisions, and the Company and the Executive irrevocably consent to the
exclusive jurisdiction and venue of the federal and state courts located within
New Jersey, 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.  No amendment or modification of this
Agreement shall be valid or binding upon the Parties unless in writing executed
by the Parties.

 

11

 

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

 

	
   

  	
  CELLDEX
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Donald L. Drakeman

  
	
   

  	
   

  	
  Donald L.
  Drakeman

  
	
   

  	
   

  	
  Chairman of the
  Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Tibor Keler

  
	
   

  	
   

  	
  Tibor Keler

  
				

 

12

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