EMPLOYMENT AGREEMENT
AGREEMENT made this 29th day of April, 1999, between IMMUCELL CORPORATION, a
Delaware Corporation (the "Company"), and Xxxxxxxx X. Xxxxxx, of Carmel, Indiana
("Xxxxxx").
WITNESSETH:
In consideration of the mutual promises hereinafter contained, the parties
hereto agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs Xxxxxx and Xxxxxx 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 Xxxxxx'x employment with the Company.
2. DUTIES OF XXXXXX. Xxxxxx shall be employed by the Company as Vice President
and Chief Marketing Officer to perform such duties consistent with such a
position as Vice President and Chief Marketing Officer as its Board of Directors
shall assign Xxxxxx from time to time. Xxxxxx 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 Xxxxxx $7,916.66 per month, beginning on February 1, 1999. During the entire
term of this agreement, Xxxxxx'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 Xxxxxx'x salary below that which is provided for
herein.
(b) EMPLOYEE BENEFITS. During the term of this Agreement the Company shall
provide Xxxxxx with the standard health, life, and disability insurance coverage
that is provided to the Company's other non-officer employees. Xxxxxx 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.
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(1) Grant. By unanimous resolution of the full Board of Directors on March
1, 1999 the Company granted to Xxxxxx 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.
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(2) VESTING. Xxxxxx'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 Xxxxxx has tendered payment of the
purchase price to the Company, the Company shall provide Xxxxxx with a
Certificate evidencing the Shares purchased. Such certificate shall
include any legends required under federal or state securities laws.
In the event of Xxxxxx'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 Xxxxxx'x termination. In the event of Xxxxxx'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. Xxxxxx may not transfer the Option other than by
will or the laws of descent and distribution. During Xxxxxx'x
lifetime, only Xxxxxx may exercise the Option.
(6) CHANGE IN CONTROL. In the event of a change in control of the Company,
Xxxxxx'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.
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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. Xxxxxx
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 Xxxxxx 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 Xxxxxx voluntarily terminate his employment
with the company, Xxxxxx hereby covenants that, for a period of one (l) year he
will abide by the terms of the "Agreement in Connection with Employment" dated
July 7, 1992 between Xxxxxx and the Company, a copy of which is appended hereto
as Attachment A.
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(b) OTHER TERMINATION. (i) Should Xxxxxx'x employment with the Company terminate
for any reason except through Xxxxxx'x voluntary act or by termination for "just
cause" as provided by subsection (c) of this Section 4 or (ii) should Xxxxxx'x
status or position with the Company be in any way altered without Xxxxxx'x
consent so as to materially reduce Xxxxxx'x status or responsibilities in a
manner inconsistent with his position as Vice President and Chief Marketing
Officer of the Company and should Xxxxxx 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 Xxxxxx'x
employment at any time, Xxxxxx 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 Xxxxxx'x employment.
In consideration for the payments to be made to him pursuant to this subsection
(b), Xxxxxx shall be bound by the provisions of subsection (a) of this Section
in the same manner as if his termination had been voluntary, and Xxxxxx shall
not compete with the Company as provided therein for a period of one (1) year
from the date of termination of Xxxxxx'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 Xxxxxx for just cause (as hereinafter defined) upon
seven (7) days' written notice to Xxxxxx. Upon the expiration of such seven (7)
day period, Xxxxxx'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 Xxxxxx
hereunder, except as such have accrued on or before such date. In the event of
the termination of Xxxxxx'x employment for just cause as provided herein, Xxxxxx
shall be bound by the provisions of subsection (a) of this Section in the same
manner as if his termination had been voluntary, and Xxxxxx shall not compete
with the Company as provided therein for a period of one (1) year from the date
of termination of Xxxxxx'x employment.
As used in this subsection (c), "just cause" shall be deemed to include only the
following:
(i) Xxxxxx'x conviction of a felony involving moral turpitude or
dishonesty; or
(ii) Xxxxxx'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 Xxxxxx'x status
and position as set forth in Section 2 of this Agreement; or
(iii) Xxxxxx'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 Xxxxxx'x
employment pursuant to subsection (b) of this Section 4 the Company shall fail
to pay Xxxxxx when due, or within ten (10) business days thereafter, all current
sums payable to Xxxxxx pursuant to said subsection (b), or (ii) following the
termination of Xxxxxx'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
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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 Xxxxxx 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 Xxxxxx pursuant to the provisions of subsection (b) of this Section 4.
5. COVENANT CONCERNING OTHER EMPLOYEES. Should Xxxxxx voluntarily terminate his
employment with the Company for any reason whatsoever, Xxxxxx hereby covenants
that, for a period of one (1) year, Xxxxxx 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 Xxxxxx, at the then current residential address of Xxxxxx (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 Xxxxxx during the term of this Agreement
while he shall be an employee of the Company, Xxxxxx'x compensation pursuant to
Section 3 hereof shall cease as of the last day of the month in which Xxxxxx'x
death occurs. Any remaining amounts owing to Xxxxxx 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 Xxxxxx 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
Xxxxxx'x estate.
(c) INJUNCTIVE RELIEF. The parties agree that the extent of damage to the
Company in the event of the breach by Xxxxxx 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 Xxxxxx and
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his heirs and legal representative. This Agreement is a personal contract and
the rights and interest of Xxxxxx 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 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 July 7,
1992 and appended hereto as Attachment A and (ii) all other incentive and
non-qualified stock option agreements previously entered into between Xxxxxx 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/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxxx
Vice President and Chief Marketing Member, Compensation and Stock
Officer Option Committee
