Employment Agreement between
Xxxx Xxxx ("Executive") and
IGI, Inc. ("Corporation")
1. Position: Executive is to serve as Senior Vice President and Chief
Financial Officer of the Corporation.
2. Term: The Initial term of this agreement is one year, commencing June 1,
1998, (the "effective date") and continuing through May 30, 1999 and,
unless either party gives written notice to the other on or before ninety
days before the end of the term, the term will be extended automatically
from year to year.
3. Base Salary: Executive's Initial base salary will be $150,000 per year,
plus $20,000 deferred salary due upon the successful completion of one year
of service.
Group/Executive Benefits: Executive and his family may participate on terms
no less favorable to Executive than the terms provided to other senior vice
president executives of the Corporation, (with all waiting periods waived)
in any group and/or executive life, hospitalization or disability insurance
plan, health program, 401(k) and similar benefit plans (qualified,
non-qualified and supplemental) or other fringe benefits of the
Corporation, including not more than four weeks of vacation annually, and a
monthly vehicle allowance.
The company will pay all healthcare premiums for the Executive and his
immediate family.
4. Equity Based Incentive Compensation:
Executive is to receive as of the Effective Date, a grant of a ten-year
option to purchase 50,000 shares of the Corporation, 25,000 of which shall
vest on the date which is six months after the Effective Date; and, 25,000
of which shall vest on the first anniversary of the Effective Date. Other
performance based compensation is to be determined by the Compensation
Committee of the Board.
5. Automobile Allowance: Executive shall receive an automobile allowance in
the amount of $600.00 per month.
6. Change of Control: A "Change of Control" will be deemed to have occurred
if:
(a) Any "person" (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), excluding for
this purpose the Corporation or any subsidiary of the Corporation, or
any employee benefit plan of the Corporation or any subsidiary of the
Corporation, or any person or entity organized, appointed or
established by the Corporation for or pursuant to the terms of such
plan which acquires beneficial ownership of voting securities of the
Corporation, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly of securities of
the Corporation representing thirty-five percent (35%) or more of the
combined voting power of the Corporation's then outstanding
securities; provided, however, that no Change of Control will be
deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by the
Corporation; and provided further that no Change of Control will be
deemed to have occurred if a person inadvertently acquires an
ownership interest of 35% or more but then promptly reduces that
ownership interest below 35%;
(b) During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at
the beginning of such two-year period constitute the Board of
Directors of the Corporation and no new director(s) (except for a
director designated by a person who has entered into an agreement with
the Corporation
to effect a transaction described elsewhere in this paragraph 8) whose
election by the Board or nomination for election by the Corporation's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously approved, cease for any reason to constitute at least a
majority thereof; or
(c) The shareholders of the Corporation approve a plan of complete
liquidation of the Corporation, an agreement for the sale of
disposition of the Corporation or all or substantially all of the
Corporation's assets, or a plan of merger or consolidation of the
Corporation with any other corporation, except for a merger or
consolidation in which the security owners of the Corporation
immediately prior to the merger or consolidation continue to own at
least sixty-five percent (65%) of the voting securities of the new (or
continued) entity immediately after such merger or consolidation.
7. Benefits Upon Termination of Employment:
(a) If Executive's employment is terminated by death, disability,
discharge by the Corporation for Cause, or resignation, Executive will
be entitled to receive his base salary through the date of
termination, any bonus or incentive or deferred compensation accrued
as of the date of termination, and all other benefits which have
accrued as of the date of termination.
(b) If Executive's employment is terminated by death or disability,
Executive will be entitled to receive, in addition to the compensation
and benefits described in paragraph (a), above, the following
benefits:
(i) Immediate full vesting of all of Executive's otherwise unvested
options to purchase shares of the Corporation, which options will
be exercisable for a period of at least 2 years after the date of
termination of employment, and
(ii) Immediate vesting of all other equity or incentive compensation
awards to Executive, which are not otherwise vested.
(c) If Executive's employment is terminated by the Corporation other than
for Cause or disability, Executive will be entitled to receive, in
addition to the compensation and benefits described in paragraphs (a)
and (b), above, the following severance benefits:
(i) Payment in a lump sum of an amount equal to Executive's twelve
months salary as in effect prior to the termination,
(ii) Continuation, for a period of twelve months after the date of
termination , of Benefits and senior executive perquisites at
least equal to those which would have been provided if
Executive's employment had continued for that time, including
auto allowance and
(iii) Outplacement services, at the expense of the Corporation, from a
provider reasonably selected by Executive.
10. Indemnification: To the full extent permitted by law, and the bylaws of the
corporation, the Corporation will indemnify Executive (including the
advancement of expenses) for any judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees, incurred by
Executive in connection with the defense of any lawsuit or other claim to
which he is made a party, except due to intentional misconduct by reason of
being an officer, director or employee of the Corporation or any of its
subsidiaries. The Corporation will maintain reasonable director and officer
liability insurance coverage for all acts or omissions of Executive during
his employment with the Corporation.
11. Binding of Successors: The Corporation will be required to have any
successor to all or substantially all of its business and/or assets
expressly assume and agree to perform Executive's employment agreement in
the same manner and to the same extent that the Corporation would be
required to perform if no such succession had taken place.
12. Completeness of Disclosure: The Corporation represents and warrants that it
has disclosed to Executive, prior to entering into his employment
agreement, all material facts regarding the financial condition of the
Corporation and the future conduct of business by the Corporation.
/s/ Xxxxxx X. Xxxxx 4/6/99
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IGI Inc. Date
/s/ Xxxx X. Xxxx 4/6/99
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Executive Date
