IMMUCELL CORPORATION EMPLOYMENT AGREEMENT DATED APRIL 29, 1999 BETWEEN THE REGISTRANT AND JOSEPH H. CRABB EMPLOYMENT AGREEMENT
IMMUCELL CORPORATION
EXHIBIT 10.5
EMPLOYMENT AGREEMENT DATED APRIL 29, 1999 BETWEEN THE REGISTRANT
AND XXXXXX X. XXXXX
AGREEMENT made this 29th day of April, 1999, between IMMUCELL CORPORATION, a Delaware Corporation (the “Company”), and Xxxxxx X. Xxxxx, of Newfield, Maine (“Xxxxx”).
WITNESSETH:
In consideration of the mutual promises hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs Xxxxx and Xxxxx hereby accepts employment by the Company subject to the provisions of this Agreement for a term commencing on April 29, 1999 and ending upon the date of termination of Xxxxx’x employment with the Company.
2. DUTIES OF XXXXX. Xxxxx shall be employed by the Company as Vice President and Chief Scientific Officer to perform such duties consistent with such a position as Vice President and Chief Scientific Officer as its Board of Directors shall assign Xxxxx from time to time. Xxxxx shall serve the Company faithfully and diligently, use his best efforts to promote the interests of the Company, and shall devote his full time and efforts to the business and affairs of the Company.
3. COMPENSATION.
(a) Base Salary. As compensation for his services hereunder, the Company shall pay Xxxxx $7,916.66 per month, beginning on February 1, 1999. During the entire term of this agreement, Xxxxx’x salary shall be subject to periodic review and adjustment by the Board of Directors of the Company, which Board of Directors may in its sole discretion change the salary to an amount greater than that provided for therein; provided, however, that in no event may the Company’s Board of Directors decrease Xxxxx’x salary below that which is provided for herein.
(b) Employee Benefits. During the term of this Agreement the Company shall provide Xxxxx with the standard health, life, and disability insurance coverage that is provided to the Company’s other non-officer employees. Xxxxx shall also be eligible to receive all other employee benefits of the Company in the same manner and to the same extent as other employees of the Company in accordance with the Company’s policies, including, without limitation, any incentive pay programs offered by the Company to all of its non-officer employees.
(c) Nonqualified Stock Options.
| (1) | Grant. By unanimous resolution of the full Board of Directors on March 1, 1999 the Company granted to Xxxxx an option (‘Option’) to purchase thirty-one thousand and one hundred (31,100) shares of ImmuCell common stock (‘Shares’) at a price equal to $1.3125 per share. |
| (2) | Vesting. Xxxxx’x right to purchase the Shares subject to this Option shall vest as follows: |
| (i) | As to 10,366 Shares on and after March 1, 2000; |
| (ii) | As to an additional 10,367 Shares on and after March 1, 2001; and |
| (iii) | As to the remaining 10,367 Shares on and after March 1, 2002. |
| (3) | Exercise. Except as hereinafter provided, the Option may be exercised in full or in part at any time to the extent vested in accordance with subsection (2). In no event may the Option be exercised to purchase fewer than one hundred (100) Shares, unless fewer than one hundred (100) Shares are subject to the Option. |
The purchase price for the Shares acquired upon exercise of the Option shall be paid (i) in cash or certified check, or (ii) at the discretion of the Compensation and Stock Option Committee of the Board of Directors of the Company by delivery of one or more stock certificates, duly endorsed, evidencing other Shares with a Fair Market Value on the date of exercise equal to the option price, or (iii) at the discretion of the Compensation and Stock Option Committee, by a combination of the methods described in (i) or (ii). As soon as practicable after Xxxxx has tendered payment of the purchase price to the Company, the Company shall provide Xxxxx with a Certificate evidencing the Shares purchased. Such certificate shall include any legends required under federal or state securities laws.
In the event of Xxxxx’x termination of employment with the Company (except for by reason of “just cause” as provided by subsection (c) of Section 4 of this Agreement), disability or death, the Option shall be exercisable during the eighteen-month period following the date of Xxxxx’x termination. In the event of Xxxxx’x termination for “just cause” as provided by subsection (c) of Section 4, the Option shall be exercisable for the three month period following such termination only to the extent it was exercisable at the time of such termination.
| (4) | Expiration of Option. This Option shall expire at 5:00 p.m., Eastern time on February 28, 2009, unless sooner terminated as provided in Section (c)(3) above, and may not be exercised thereafter. |
| (5) | Nontransferability. Xxxxx may not transfer the Option other than by will or the laws of descent and distribution. During Xxxxx’x lifetime, only Xxxxx may exercise the Option. |
| (6) | Change in Control. In the event of a change in control of the Company, Xxxxx’x right to purchase Shares subject to the Option shall vest immediately. For purposes of this Amendment, ‘change in control’ shall mean any one of the following events: |
(a) Any person shall become beneficial owner, directly or indirectly, of securities representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding stock.
As used in this Paragraph 6 (a), ‘beneficial owner’ shall have the meaning ascribed to it from time to time under rules promulgated by the Securities and Exchange Commission pursuant to Section 13 (d) of the Securities Exchange Act of 1934, or any similar successor statute or rule; and a ‘person’ shall include any natural person, corporation, partnership, trust, association, or any group or combination thereof, whose ownership of the Company stock would be reportable pursuant to such provision of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder;
(b) The Company’s stockholders approve (i) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Company common stock would be converted into cash, securities or other property, or (ii) any sale, lease, exchange, liquidation or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Company.
(c) Any other event which a majority of all the Company’s Directors who are not employees of the Company determines constitutes a change of control.
| (7) | No Registration of Securities. The parties agree that the Company presently intends to rely on the securities registration exemption contained in Section 10502 (1) (L) of the Revised Maine Securities Act and that, accordingly, no registration or exemption filing shall be made by the Company under such Act with respect to the Shares. Xxxxx acknowledges that transfer of the Shares may be restricted by applicable federal and state securities laws and that the Shares when issued shall contain an appropriate legend to that effect. Notwithstanding the foregoing, the Company agrees to register these shares in conjunction with its next Registration Statement on Form S-8 to be filed with the Securities and Exchange Commission. |
(d) Bonus. A cash bonus will be paid to Xxxxx by the Company if certain performance objectives are met during any fiscal year. These objectives will be specified by the Company’s Board of Directors on an annual basis. Each and any such annual incentive compensation agreement shall be incorporated by reference into this Employment Agreement. Any bonus earned during a fiscal year will be paid by 1 February of the next fiscal year.
4. TERMINATION OF EMPLOYMENT.
(a) Voluntary Termination. Should Xxxxx voluntarily terminate his employment with the company, Xxxxx hereby covenants that, for a period of one (1) year he will abide by the terms of the “Agreement in Connection with Employment” dated September 19, 1988 between Xxxxx and the Company, a copy of which is appended hereto as Attachment A.
(b) Other Termination. (i) Should Xxxxx’x employment with the Company terminate for any reason except through Xxxxx’x voluntary act or by termination for “just cause” as provided by subsection (c) of this Section 4 or (ii) should Xxxxx’x status or position with the Company be in any way altered without Xxxxx’x consent so as to materially reduce Xxxxx’x status or responsibilities in a manner inconsistent with his position as Vice President and Chief Scientific Officer of the Company and should Xxxxx resign from all offices and positions held with the Company in response to such change or alteration in his status or position with the Company or (iii) should the Company terminate Xxxxx’x employment at any time, Xxxxx shall receive from the Company salary and benefits at the monthly level existing prior to termination for an additional three (3) months after the date of termination of Xxxxx’x employment.
In consideration for the payments to be made to him pursuant to this subsection (b), Xxxxx shall be bound by the provisions of subsection (a) of this Section in the same manner as if his termination had been voluntary, and Xxxxx shall not compete with the Company as provided therein for a period of one (1) year from the date of termination of Xxxxx’x employment by the Company.
(c) Termination for Just Cause. Notwithstanding the forgoing provisions of this Section 4, a majority of the Board of Directors of the Company may at any time terminate the employment of Xxxxx for just cause (as hereinafter defined) upon seven (7) days’ written notice to Xxxxx. Upon the expiration of such seven (7) day period, Xxxxx’x employment with the Company shall cease, and from and after such date the Company shall have no further liability or obligation to make any payments or provide any benefits which would otherwise be paid to Xxxxx hereunder, except as such have accrued on or before such date. In the event of the termination of Xxxxx’x employment for just cause as provided herein, Xxxxx shall be bound by the provisions of subsection (a) of this Section in the same manner as if his termination had been voluntary, and Xxxxx shall not compete with the Company as provided therein for a period of one (1) year from the date of termination of Xxxxx’x employment.
As used in this subsection (c), “just cause” shall be deemed to include only the following:
(i) Xxxxx’x conviction of a felony involving moral turpitude or dishonesty; or
(ii) Xxxxx’x persistent failure to comply with the reasonable directives or assignments of the Company’s Board of Directors, provided that such directives or assignments are consistent with Xxxxx’x status and position as set forth in Section 2 of this Agreement; or
(iii) Xxxxx’x persistent failure to devote his full time and efforts to the business and affairs of the Company in the manner contemplated by Section 2 of this Agreement.
(d) Certain Events. In the event that (i) following the termination of Xxxxx’x employment pursuant to subsection (b) of this Section 4 the Company shall fail to pay Xxxxx when due, or within ten (10) business days thereafter, all current sums payable to Xxxxx pursuant to said subsection (b), or (ii) following the termination of Xxxxx’x employment for any reason whatsoever, the Company or any successor or assignee of the Company entitled to the benefits of this Agreement shall cease to conduct the business of the Company engaged in by the Company at the times of such termination, then, and in either such event, the covenants against competition set forth in subsections (a), (b), and (c) of this Section 4 shall be terminated and Xxxxx shall thereafter not be bound by the provisions thereof. The termination of said covenants against competition shall not alter or affect the obligation of the Company to make any payments required to be made to Xxxxx pursuant to the provisions of subsection (b) of this Section 4.
5. COVENANT CONCERNING OTHER EMPLOYEES. Should Xxxxx voluntarily terminate his employment with the Company for any reason whatsoever, Xxxxx hereby covenants that, for a period of one (1) year, Xxxxx will not directly or indirectly persuade, induce or otherwise encourage any other employee of the Company to leave the employ of the Company to join or form any other firm, corporation, partnership, association, joint venture, trust or business entity of any kind engaged in, or to be engaged in the future in, any business which is similar to or competitive with the business now or at any time hereafter engaged in by the Company.
6. MISCELLANEOUS.
(a) Notice. Any notice required to be given hereunder shall be given in writing and shall be delivered by hand or sent by registered or certified mail, postage prepaid, return receipt requested, or by Federal Express, if to the Company, at the address of its principal offices on the date upon which such notice is given, and if to Xxxxx, at the then current residential address of Xxxxx (as reflected on the records of the Company) by any of the aforesaid means. Any such notice shall be effective when delivered in person or deposited in the United States mails in accordance with the provisions of this subsection.
(b) Death. In the event of the death of Xxxxx during the term of this Agreement while he shall be an employee of the Company, Xxxxx’x compensation pursuant to Section 3 hereof shall cease as of the last day of the month in which Xxxxx’x death occurs. Any remaining amounts owing to Xxxxx pursuant to Section 3 hereof in respect to such month shall be paid to his estate or shall pass by applicable laws of descent and distribution. In the event of the death of Xxxxx after he has terminated his employment with the Company, but prior to the payment of all amounts payable to him pursuant to the provisions of subsection (b) of Section 4 hereof, the remaining such amounts shall be paid to the representatives of Xxxxx’x estate.
(c) Injunctive Relief. The parties agree that the extent of damage to the Company in the event of the breach by Xxxxx of the noncompetition covenants contained in the agreement attached hereto as Attachment A would be difficult or impossible to ascertain and that there would be no adequate remedy at law available to the Company in the event of such breach. Therefore, in the event of any such breach, the Company shall be entitled to enforce any or all of such covenants by injunction or other equitable relief in addition to receiving damages or other relief to which the Company may be entitled.
(d) Binding Effect; Assignment. The provision of this Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns and to the benefit of Xxxxx and his heirs and legal representative. This Agreement is a personal contract and the rights and interest of Xxxxx herein may not be sold, transferred, assigned, pledged, or hypothecated and any such attempted sale, transfer, assignment, pledge or hypothecation shall be null, void and of no effect.
(e) Entire Agreement. Except as set forth in the next succeeding sentence, this Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated herein and supersedes all prior agreements and understandings, written and oral with respect to the subject matter hereof, including without limitation the Employment Agreement dated November 8, 1991 as amended on March 17, 1992 between Xxxxx and the Company, and may not be amended or modified except by an instrument in writing signed by both parties hereto. It is understood and agreed that the following additional agreements shall remain in full force and effect and shall not be superceded by this Agreement: (i) the “Agreement in Connection with Employment” dated September 19, 1988 and appended hereto as Attachment A, (ii) the provisions regarding the nonqualified stock options granted to Xxxxx contained in the Amendment to Employment Agreement dated April 13, 1992 between Xxxxx and the Company, and (iii) all other incentive and nonqualified stock option agreements previously entered into between Xxxxx and the Company, which agreements remain in full force to the same extent they were in force before this Agreement was executed.
(f) Severability. If any provision of this Agreement is declared invalid, illegal or unenforceable, such provision shall be severed and all remaining provisions shall continue in full force and effect.
(g) Law Governing. This Agreement shall be governed by and enforced in accordance with the laws of the State of Maine
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, intending the same to take effect as a sealed instrument, as of the date first above written.
| IMMUCELL CORPORATION | ||||
| /s/ Xxxxxx X. Xxxxx | /s/ Xxxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxx | By: Xxxxxxx X. Xxxxxx | |||
| Vice President and Chief Scientific Officer | Member, Compensation and Stock Option Committee | |||
