CONSULTING AGREEMENT EFFECTIVE DATE: May 1, 2007
EXHIBIT 10.58
EFFECTIVE DATE: May 1, 2007
This Consulting Agreement (the “Agreement") is made by and between IDM Pharma, Inc., a
Delaware corporation (the “Company”), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D., an individual and a member of the
Company’s Board of Directors (the “Consultant”) effective May 1, 2007.
1. Engagement of Services. The Company agrees to engage Consultant, and Consultant agrees to
provide services to the Company, including advising and consulting with the Company’s management
and Board of Directors with regard to review of the Junovan new drug application by the Food & Drug
Administration and related matters, the planning and implementation of a retention bonus plan for
employees of the Company, an intellectual property audit, and other operational matters as
requested by the Board of Directors. The manner and means by which Consultant chooses to complete
the services are in Consultant’s sole discretion and control. The Company will make its
facilities, equipment and personnel available to Consultant when necessary or appropriate in
connection with Consultant’s performance of services under this Agreement. Notwithstanding
anything to the contrary set forth herein, nothing in this Agreement requires the Company to pursue
any business strategy, and the Company reserves the right to modify its business strategy at any
time and for any reason.
2. Compensation. The Company will pay Consultant at a rate of $13,500 per month for his services
under this Agreement. Consultant will be reimbursed for expenses, including the costs of travel
reasonably incurred in connection with his services under this Agreement, provided Consultant has
furnished such documentation for expenses as the Company may reasonably request.
3. Equity Awards.
3.1 Grant of Option. Consultant, will be granted a nonstatutory stock option covering a total
of seventy-five thousand (75,000) shares of the common stock of the
Company (the “Option”) subject
to the terms of the Company’s 2000 Stock Plan, as amended (the “Plan”) and the form of stock option
grant agreement approved by the Board substantially as attached hereto as Exhibit A (the
“Stock Option Agreement”). The exercise price of the Option will be set at the closing price of
the Company’s common stock as quoted on the Nasdaq Global Market on May 1, 2007 (the effective date
of grant of the Option). The Option will vest in twelve (12) equal monthly installments on the
last day of each calendar month following the date of grant for so long as Consultant provides
Continuous Service (as that term is defined in the Plan) to the Company as either a Consultant or
Director (as those terms are defined in the Plan). Notwithstanding the foregoing, the terms of the
Stock Option Agreement shall provide for accelerated vesting in certain circumstances upon a Change
in Control.
1.
3.2 Restricted Stock Award. Pursuant to the Plan, the Company will grant to Consultant the
right to receive a total of twenty thousand (20,000) shares of the common stock of the Company,
which right shall vest as to six thousand six hundred sixty-seven (6,667) shares on each of May 31,
2007 and June 30, 2007 and as to six thousand six hundred sixty-six (6,666) shares on July 31,
2007, provided that Consultant provides Continuous Service (as that term is defined in the Plan) to
the Company through each of the specified vesting dates. Notwithstanding the foregoing, the terms
of the restricted stock award agreement shall provide for accelerated vesting in certain
circumstances upon a Change in Control.
4. Ownership of Work Product. Consultant hereby assigns to the Company all right,
title and interest in and to any work product created by Consultant, or to which Consultant
contributes, pursuant to this Agreement (the “Work Product”), including all copyrights, trademarks
and other intellectual property rights contained therein. Consultant agrees to execute, at the
Company’s request and expense, all documents and other instruments necessary or desirable to
confirm such assignment. In the event that Consultant does not, for any reason, execute such
documents within a reasonable time of the Company’s request, Consultant hereby irrevocably appoints
the Company as Consultant’s attorney-in-fact for the purpose of executing such documents on
Consultant’s behalf, which appointment is coupled with an interest. If Consultant has any rights
in the Work Product which cannot be assigned, Consultant agrees to waive enforcement worldwide of
such rights against the Company. In the event that Consultant has any such rights, that cannot be
assigned or waived, Consultant hereby grants to the Company an exclusive, worldwide, irrevocable,
perpetual license to use, reproduce, distribute, create derivative works of, publicly perform and
publicly display the Work Product in any medium or format, whether now known of later developed.
5. Independent Contractor Relationship. Consultant’s relationship with the Company under this
Agreement is that of an independent contractor, and nothing in this Agreement is intended to, or
should be construed to, create a partnership, agency, joint venture or employment relationship.
Consultant will not be entitled to any of the benefits which the Company may make available to its
employees, including, but not limited to, group health or life insurance, profit-sharing or
retirement benefits. Consultant is not authorized to make any representation, contract or
commitment on behalf of the Company unless specifically requested or authorized in writing to do so
by a Company officer. Consultant is solely responsible for, and will file, on a timely basis, all
tax returns and payments required to be filed with, or made to, any federal, state or local tax
authority with respect to the performance of services and receipt of fees under this Agreement.
Consultant is solely responsible for, and must maintain adequate records of, expenses incurred in
the course of performing services under this Agreement. No part of Consultant’s compensation will
be subject to withholding by the Company for the payment of any social security, federal, state or
any other employee payroll taxes. The Company will regularly report amounts paid to Consultant by
filing Form 1099-MISC with the Internal Revenue Service as required by law.
6. Confidential Information. Consultant agrees to hold the Company’s Confidential Information
in strict confidence and not to disclose such Confidential Information to any third parties. “Confidential Information” as used in this Agreement shall mean all information
2.
disclosed by the Company to Consultant that is not generally known in the Company’s trade or industry and
shall include, without limitation, (a) concepts and ideas relating to the development and
distribution of content in any medium or to the current, future and proposed products or services
of the Company or its subsidiaries or affiliates; (b) trade secrets, drawings, inventions,
know-how, software programs, and software source documents; (c) information regarding plans for
research, development, new service offerings or products, marketing and selling, business plans,
business forecasts, budgets and unpublished financial statements, licenses and distribution
arrangements, prices and costs, suppliers and customers; (d) existence of any business discussions,
negotiations or agreements between the parties; and (e) any information regarding the identities,
skills, duties and compensation of employees, contractors or other agents of the Company or its
subsidiaries or affiliates. Confidential Information also includes proprietary or confidential
information of any third party who may disclose such information to the Company or Consultant in
the course of the Company’s business. Upon request by the Company, Consultant agrees to promptly
deliver to the Company the original and any copies of such Confidential Information.
7. No Conflict of Interest. During the term of this Agreement, Consultant will not accept
work, enter into a contract, or accept an obligation from any third party, inconsistent or
incompatible with Consultant’s obligations under this Agreement. Consultant warrants that there is
no other contract or duty on his part inconsistent with this Agreement.
8. Term and Termination.
8.1 Term. The term of this Agreement begins on the Effective Date and continues until July
31, 2007, unless earlier terminated as provided in this Agreement or extended by agreement of the
Company and Consultant.
8.2 Termination by the Company. The Company may terminate this Agreement with or without
cause, at any time upon fifteen (15) days prior written notice to Consultant.
8.3 Termination by Consultant. Consultant may terminate this Agreement at any time upon
fifteen (15) days prior written notice to the Company’s Executive Chair.
8.4 Survival. The rights and obligations contained in Sections 4 (“Ownership of Work
Product”) and 6 (“Confidential Information”) will survive any termination or expiration of this
Agreement.
9. Governing Law. This Agreement shall be governed in all respects by the laws of the United
States of America and by the laws of the State of California, as such laws are applied to
agreements entered into and to be performed entirely within California between California
residents.
10. Severability. Should any provisions of this Agreement be held by a court of law to be
illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired thereby.
3.
11. Waiver. The waiver by the Company of a breach of any provision of this Agreement by
Consultant shall not operate or be construed as a waiver of any other or subsequent breach by
Consultant.
12. Entire Agreement. This Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all prior or contemporaneous oral or written
agreements concerning such subject matter.
In Witness Whereof, the parties have executed this Agreement as of the date(s)
indicated below.
| IDM Pharma Inc. | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D. | |||||||
By:
|
/s/ ▇▇▇▇ ▇▇▇▇ Romet-Lemonne | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||||
| ▇▇▇▇ ▇▇▇▇ Romet-Lemonne, M.D. | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D. | |||||||
| Chief Executive Officer | ||||||||
| Date: May 1, 2007 | Date: May 1, 2007 | |||||||
4.
Exhibit A
Stock Option Agreement
IDM PHARMA, INC.
2000 STOCK PLAN
2000 STOCK PLAN
Stock
Option Agreement
(Nonstatutory stock Option — ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D.)
Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement,
IDM Pharma, Inc. (the “Company”) has granted you an option under its 2000 Stock Plan, as amended
(the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the
Plan.
The details of your option are as follows:
1. Vesting.
(a) Vesting in Grant Notice. Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the termination of
your Continuous Service.
(b) Special Acceleration Provision. Notwithstanding any other provisions of the Plan to the
contrary, in the event of a Change in Control (as such term is defined below), then the vesting and
exercisability of your option shall be accelerated in full (or any reacquisition or repurchase
rights held by the Company with respect to Common Stock acquired pursuant to the early exercise of
your option shall lapse in full, as appropriate) such that immediately prior to the Change in
Control, one hundred percent (100%) of your option shall be exercisable.
(c) Definition of Change in Control. For purposes of this Section 1 only, Change in Control
means: (i) a sale of all or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving entity and in which the holders of the
Company’s outstanding voting stock immediately prior to such transaction own, immediately after
such transaction, securities representing less than fifty percent (50%) of the voting power of the
entity surviving such transaction or, where the surviving entity is a wholly-owned subsidiary of
another entity, the surviving entity’s parent; (iii) a reverse merger in which the Company is the
surviving entity but the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of securities of the
surviving entity’s parent, cash or otherwise, and in which the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately
1.
after such transaction, securities representing less than fifty percent (50%) of the voting power
of the Company or, where the Company is a wholly-owned subsidiary of another entity, the Company’s
parent; or (iv) an acquisition by any person, entity or group within the meaning of Section 13(d)
or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company
or other entity controlled by the Company) of the beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the
Company representing at least seventy five percent (75%) of the combined voting power entitled to
vote in the election of Directors; provided, however, that nothing in this paragraph shall apply to
a sale of assets, merger or other transaction effected exclusively for the purpose of changing the
domicile of the Company.
(d) Parachute Payments. If any payment or benefit you would receive pursuant to a Change in
Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within
the meaning of Code Section 280G, 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 of the Payment, which such 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 your 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 you
elect 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 awards; reduction of
employee benefits. In the event that acceleration of vesting of stock award compensation is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant
of your stock awards unless the Executive elects in writing a different order for cancellation. An
accounting firm selected by mutual agreement of you and the Company shall perform the foregoing
calculations. 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 you and the Company within fifteen (15) calendar days after the date on which
your right to a Payment is triggered (if requested at that time by you or the Company) or such
other time as requested by you or the Company. 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 you and the Company 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 you and the Company.
2.
2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan.
3. Exercise prior to Vesting (“Early Exercise”). If permitted in your Grant Notice
(i.e., the “Exercise Schedule” indicates that “Early Exercise” of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Company’s form of Early Exercise Stock Purchase Agreement; and
(c) you shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred.
4. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:
(a) In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Company’s reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that
are owned free and clear of any liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender
3.
would violate the provisions of any law, regulation or agreement restricting the redemption of
the Company’s stock.
(c) Pursuant to the following deferred payment alternative:
(i) Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due four (4) years from date of exercise or, at the Company’s election, upon
termination of your Continuous Service.
(ii) Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid the treatment as interest, under any applicable provisions of the
Code, of any portion of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(iii) At any time that the Company is incorporated in Delaware, payment of the Common Stock’s
“par value,” as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.
(iv) In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement covering the purchased
shares of Common Stock, both in form and substance satisfactory to the Company, or such other or
additional documentation as the Company may request.
5. Whole Shares. You may exercise your option only for whole shares of Common Stock.
6. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.
7. Term. The term of your option commences on the Date of Grant and expires upon the
earliest of the following:
(a) eighteen (18) months after your death;
(b) the Expiration Date indicated in your Grant Notice; or
(c) the day before the tenth (10th) anniversary of the Date of Grant.
4.
8. Exercise.
(a) You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.
(b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
9. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
10. Right of Repurchase. To the extent provided in the Company’s bylaws as amended
from time to time, the Company shall have the right to repurchase all or any part of the shares of
Common Stock you acquire pursuant to the exercise of your option.
11. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.
12. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with your option.
(b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable conditions or restrictions of law, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the
5.
exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law.
If the date of determination of any tax withholding obligation is deferred to a date later than the
date of exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share withholding procedure shall
be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
13. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
14. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
6.