Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into this 31st day of December, 2006 (the "Effective Date") by and
between Immunomedics, Inc., a Delaware corporation having its principal offices
in Xxxxxx Plains, New Jersey (the "Company"), and Xxxxxxx X. Xxxxxxxx (the
"Executive").
WHEREAS, the Executive is presently employed by the Company in the
capacity of President and Chief Executive Officer, pursuant to an Employment
Agreement between the Company and Executive, dated March 10, 2001 (the "Prior
Employment Agreement");
WHEREAS, on June 14, 2006, the Company extended the term of the Prior
Employment Agreement through December 31, 2006;
WHEREAS, the Executive possesses considerable experience and an
intimate knowledge of the business and affairs of the Company, its policies,
methods, personnel and operations;
WHEREAS, the Company recognizes that the Executive's contributions have
been substantial and meritorious and, as such, the Executive has demonstrated
unique qualifications to act in an executive capacity for the Company;
WHEREAS, the Company desires to continue to employ the Executive as its
President and Chief Executive Officer, and the Executive desires to continue to
serve in such capacity on behalf of the Company, upon the terms and conditions
hereinafter set forth; and
WHEREAS, the Company and the Executive have agreed that this Agreement
will supercede and replace the Prior Employment Agreement as of the Effective
Date.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1.1 Term. The term of this Agreement (the "Term") shall begin as
of the Effective Date and shall terminate on the day immediately prior to the
second anniversary of the Effective Date, unless sooner terminated by either
party as hereinafter provided; provided, however, that the Term shall
automatically be extended for successive one-year periods on the second
anniversary of the Effective Date and on each subsequent anniversary thereof
unless, not later than 180 days preceding the date of any such extension, either
party gives the other party written notice of such party's intention not to
further extend the Term. If the Company elects not to renew the Agreement, the
Agreement will continue in effect according to its terms until the end of the
then current Term, at which time the Agreement shall terminate, with the
exception of the Executive's obligations set forth in Sections 4, 5, 6 and 7.
The expiration or non-renewal of this Agreement shall be deemed a termination of
the Executive's employment for purposes of this Agreement, including a
termination without Cause for purposes of Section 2.
1.2 Duties and Responsibilities. Commencing on the Effective Date,
Executive shall continue to serve as the President and Chief Executive Officer
of the Company and shall perform all duties and accept all responsibilities
incident to such position as may be reasonably assigned to Executive by the
Company's Board of Directors (the "Board").
1.3 Extent of Service. Executive agrees to use Executive's best
efforts to carry out Executive's duties and responsibilities under Section 1.1
hereof and, consistent with the other provisions of this Agreement, to devote
substantially all of Executive's business time, attention and energy thereto.
The foregoing shall not be construed as preventing Executive from making
investments in other businesses or enterprises, provided that Executive agrees
not to become engaged in any other business activity which, in the reasonable
judgment of the Board, is likely to interfere with Executive's ability to
discharge Executive's duties and responsibilities to the Company.
1.4 Base Salary. For all the services rendered by Executive
hereunder, the Company shall pay Executive a base salary ("Base Salary") at the
annual rate of $532,000, payable bi-weekly in installments at such times as the
Company customarily pays its other senior level executives. Executive's Base
Salary shall be reviewed annually for appropriate increases by the Board or
Compensation Committee of the Board (the "Compensation Committee") pursuant to
the normal performance review policies for senior level executives.
1.5 Annual Bonus. During the Term, the Executive shall be eligible
to participate in the Company's incentive compensation plan in place from time
to time for its senior level executives generally, at levels determined by the
Compensation Committee. The Company reserves the right to amend or rescind the
incentive compensation plan at any time in its discretion. In connection with
Executive's participation in the incentive compensation plan, the Executive
shall be eligible to receive an annual discretionary bonus. The amount of the
annual discretionary bonus, if any, will be determined by the Compensation
Committee in its discretion, based on the Executive's individual performance and
Company performance as determined by the Compensation Committee. The Executive's
annual bonus target is 30% of Base Salary, subject to achievement of performance
goals to be established by the Compensation Committee, with a potential payout
from 0 to 150% of the target amount depending upon achievement of the
performance goals. The discretionary annual bonus, if any, will be determined as
of the end of each fiscal year during the Term and shall be payable as soon as
practicable after the end of each fiscal year to which the bonus relates, but in
no event, later than 2-1/2 months after the end of such fiscal year, except as
provided in Section 2. Except as otherwise specifically provided in Section 2,
to be eligible to receive an annual bonus, or any portion thereof, the Executive
must be employed by the Company both at the time the amount of the annual bonus,
if any, is determined, and at the time the annual bonus, if any, is to be paid.
1.6 Equity Compensation. During the Term, pursuant to the terms
and conditions of the Company's 2006 Stock Incentive Plan or any successor
equity compensation plan as may be in place from time to time, the Executive
shall be eligible to receive, from time to time, awards in amounts, and subject
to such terms, conditions and restrictions, as determined by the Compensation
Committee in its sole discretion. Awards granted to the Executive, if any, shall
be subject to the terms and conditions established within the Company's 2006
Stock Incentive Plan (as amended from time to time) or any successor equity
compensation plan as may be in place from time to time, as applicable, and the
separate option agreement, restricted stock purchase agreement or stock award
agreement between the Company and the Executive that sets forth the terms and
conditions of the award (e.g., exercise price, expiration date and vesting
schedule of stock options; and the restricted period and/or other restrictions
such as performance objectives relating to stock awards).
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1.7 Retirement and Welfare Plans. During the Term, Executive shall
participate in employee retirement and welfare benefit plans made available to
the Company's senior level executives as a group or to its employees generally,
as such retirement and welfare plans may be in effect from time to time and
subject to the eligibility requirements of the plans. Nothing in this Agreement
shall prevent the Company from amending or terminating any retirement, welfare
or other employee benefit plans or programs from time to time as the Company
deems appropriate.
1.8 Reimbursement of Expenses; Vacation. During the Term,
Executive shall be provided with reimbursement of reasonable expenses related to
Executive's employment by the Company on a basis no less favorable than that
which may be authorized from time to time for senior level executives as a
group, and shall be entitled to six (6) weeks of vacation in accordance with the
Company's pay for time not worked policies.
1.9 Perquisites. During the Term, Executive shall also be provided
with executive fringe benefits and perquisites under the same terms as those
made available to the Company's senior level executives as a group, as such
programs may be in effect from time to time. Nothing in this Agreement or
otherwise shall prevent the Company from amending or terminating any fringe
benefits or perquisites from time to time as the Company deems appropriate.
2. Termination. Executive's employment shall terminate upon the occurrence
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of any of the following events:
2.1 Termination Without Cause or Resignation for Good Reason
Before A Change of Control.
(a) The Company may remove Executive at any time without
Cause (as defined in Section 2.9) from the position in which Executive is
employed hereunder upon not less than 30 days' prior written notice to
Executive. The Company shall have discretion to terminate Executive's employment
during the notice period and pay continued Base Salary in lieu of notice. In
addition, Executive may initiate a termination of employment by resigning under
this Section 2.1 for Good Reason (as defined in Section 2.9), upon not less than
30 days' prior written notice of such resignation.
(b) If Executive's employment terminates as described in
subsection (a) above and Executive executes and does not revoke a written
release upon such removal, in a form provided by the Company, of any and all
claims against the Company and all related parties with respect to all matters
arising out of Executive's employment by the Company, or the termination thereof
(the "Release"), Executive shall be entitled to receive the following severance
compensation, as long as Executive complies with the terms of Sections 4, 5, 6
and 7 below:
(i) Executive shall receive severance payments
in an amount equal to 2.00 times Executive's annual Base Salary at the rate in
effect at the time of Executive's termination, plus target bonus established for
the fiscal year in which the date of termination occurs. The severance amount
shall be paid in equal monthly installments over the 24-month period following
Executive's termination of employment.
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(ii) The Company shall pay the monthly COBRA
medical insurance cost (less any required employee payments calculated as if
Executive had continued to be an employee) if Executive continues medical
coverage under COBRA, for Executive, and, where applicable, her spouse and
dependents, during the 24-month period following Executive's termination date.
The Executive may elect COBRA continuation coverage according to the terms of
the Company's applicable medical plan for the period permitted under such plan.
(iii) Executive shall receive any benefits accrued
in accordance with the terms of any applicable benefit plans and programs of the
Company. In addition, Executive shall be entitled to the annual bonus, if any,
payable for the fiscal year in which the termination occurs (prorated to reflect
Executive's actual period of service during such fiscal year) without regard to
the last sentence of Section 1.5.
(iv) Except as otherwise required by Section
2.10, the benefits described in subsections (i) and (ii) above shall begin
within 30 days after Executive's termination date (or at the end of the
revocation period for the Release, if later). The Company shall provide the
Release to Executive on or before the termination date, and Executive shall
execute the Release during the time period permitted by applicable law.
(v) Executive agrees that if Executive fails to
comply with Section 4, 5, 6 or 7 below, all payments under this Section 2.1
shall immediately cease.
2.2 Termination Without Cause or Resignation for Good Reason After
A Change of Control.
(a) If a Change of Control occurs and the Company
terminates Executive's employment without Cause at any time upon or after a
Change of Control or Executive resigns for Good Reason (as defined in Section
2.9) upon or at any time during the one-year period following the Change of
Control, this Section 2.2 shall apply.
(b) If Executive's employment terminates as described in
subsection (a) above and Executive executes and does not revoke a Release,
Executive shall be entitled to receive the following severance compensation, as
long as Executive complies with the terms of Sections 4, 5, 6 and 7 below:
(i) Executive shall receive a lump sum severance
payment in an amount equal to 3.00 times the sum of Executive's annual Base
Salary at the rate in effect at the time of Executive's termination and
Executive's target bonus for the calendar year in which the date of termination
occurs;
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(ii) For a period of thirty-six (36) months
following the Executive's date of termination, Executive shall continue to
receive the medical and dental coverage in effect on Executive's date of
termination (or generally comparable coverage) for Executive and, where
applicable, Executive's spouse and dependents, as the same may be changed from
time to time for employees generally, as if Executive had continued in
employment during such period; or, as an alternative, the Company may elect to
pay Executive cash in lieu of such coverage in an amount equal to Executive's
after-tax cost of continuing comparable coverage, where such coverage may not be
continued by the Company (or where such continuation would adversely affect the
tax status of the plan pursuant to which the coverage is provided). The COBRA
health continuation coverage period under section 4980B of the Code shall run
concurrently during the thirty-six (36) month period.
(iii) Executive shall receive any benefits accrued
in accordance with the terms of any applicable benefit plans and programs of the
Company. In addition, Executive shall be entitled to the annual bonus, if any,
payable for the fiscal year in which the termination occurs (prorated to reflect
Executive's actual period of service during such fiscal year) without regard to
the last sentence of Section 1.5.
(iv) Except as otherwise required by Section
2.10, the lump sum payment described in subsection (i) shall be made, and the
monthly payments described in subsection (ii) above shall begin, within 30 days
after Executive's termination date (or at the end of the revocation period for
the Release, if later). The Company shall provide the Release to Executive on or
before the termination date, and Executive shall execute the Release during the
time period permitted by applicable law.
(c) Notwithstanding any provision to the contrary in the
Company's 2006 Stock Incentive Plan or any applicable plan, program or
agreement, upon the occurrence of a Change of Control, all stock options,
restricted stock and other equity rights held by the Executive will become fully
vested and/or exercisable, as the case may be, on the date on which the Change
in Control occurs, and all stock options held by the Executive shall remain
exercisable, notwithstanding anything in any other agreement governing such
options, for a period of twenty-four (24) months following the end of the
remaining balance of the Term of the Agreement; provided, however, that in no
event will the option be exercisable (a) beyond its original term; or (b) beyond
the extension period permitted under Section 409A of the Code.
(d) Notwithstanding any provision to the contrary in any
applicable plan, program or agreement providing for supplemental retirement
benefits or deferred compensation, upon the occurrence of a Change of Control,
Executive's accrued benefit under such plans, programs or agreements shall
become fully vested on the date on which the Change in Control occurs, and shall
be immediately payable on the Executive's date of termination, unless the
Executive has made a valid election under such plan, program or agreement to
defer payment of such accrued benefits.
(e) Executive agrees that if Executive materially
breaches Section 4, 5, 6 or 7 below, all payments and benefits under this
Section 2.2 shall immediately cease.
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2.3 Increase in Payments Upon a Change of Control.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a "Payment"), would constitute an "excess parachute payment"
within the meaning of Section 280G of the Code, the Company shall pay to
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by Executive after deduction of any excise tax imposed under Section
4999 of the Code, and any federal, state and local income tax, employment tax
and excise tax imposed upon the Gross-Up Payment, shall be equal to the Payment.
For purposes of determining the amount of the Gross-Up Payment, unless Executive
specifies that other rates apply, Executive shall be deemed to pay federal
income tax and employment taxes at the highest marginal rate of federal income
and employment taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of Executive's residence on Executive's
termination date, net of the maximum reduction in federal income taxes that may
be obtained from the deduction of such state and local taxes.
(b) All determinations to be made under this Section 2.3
shall be made by the Company's independent public accountant immediately prior
to the Change of Control or by another independent public accounting firm
mutually selected by the Company and Executive before the date of the Change of
Control (the "Accounting Firm"), which firm shall provide its determinations and
any supporting calculations both to the Company and Executive within 20 days
after Executive's termination date. Any such determination by the Accounting
Firm shall be binding upon the Company and Executive.
(c) The Company shall pay the Gross-Up Payment as and
when the related excise tax under section 4999 of the Code ("Excise Tax") is
incurred. The Gross-Up Payment shall be paid in accordance with Section 409A of
the Code, to the extent applicable. If required in order to comply with Section
409A of the Code, (i) the Gross-Up Payment attributable to Payments other than
severance compensation shall be paid in a lump sum payment upon the closing of
the Change of Control, subject to Section 2.10 below, if applicable, and (ii)
the Gross-Up Payment attributable to severance compensation shall be paid in a
lump sum payment on the first day on which severance compensation is paid. If
the amount of a Gross-Up Payment cannot be fully determined by the date on which
the applicable portion of the Payment becomes subject to the Excise Tax
("Payment Date"), the Company shall pay to the Employee by the Payment Date an
estimate of such Gross-Up Payment, as determined by the Accounting Firm, and the
Company shall pay to the Employee the remainder of such Gross-Up Payment (if
any) as soon as the amount can be determined, but in no event later than 20 days
after the Payment Date.
(d) All of the fees and expenses of the Accounting Firm
in performing the determinations referred to in this Section 2.3 shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm from any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to this Section 2.3, except for claims,
damages or expenses resulting from the gross negligence or willful misconduct of
the Accounting Firm.
2.4 Voluntary Termination. Executive may voluntarily terminate
Executive's employment for any reason upon 30 days' prior written notice. In
such event, after the effective date of such termination, except as provided in
Section 2.2 with respect to a resignation for Good Reason, no further payments
shall be due under this Agreement, except that Executive shall be entitled to
any benefits accrued in accordance with the terms of any applicable benefit
plans and programs of the Company.
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2.5 Disability. The Company may terminate Executive's employment
if Executive has been unable to perform the material duties of Executive's
employment for a period of 90 days in any 12-month period because of physical or
mental injury or illness ("Disability"); provided, however, that the Company
shall continue to pay Executive's Base Salary until the Company acts to
terminate Executive's employment. Executive agrees, in the event of a dispute
under this Section 2.5 relating to Executive's Disability, to submit to a
physical examination by a licensed physician jointly selected by the Board and
Executive. If the Company terminates Executive's employment for Disability, no
further payments shall be due under this Agreement, except that Executive shall
be entitled to any benefits accrued in accordance with the terms of any
applicable benefit plans and programs of the Company. In addition, Executive
shall be entitled to the annual bonus, if any, payable for the fiscal year in
which the termination occurs (prorated to reflect Executive's actual period of
service during such fiscal year) without regard to the last sentence of Section
1.5.
2.6 Death. If Executive dies while employed by the Company, the
Company shall pay to Executive's executor, legal representative, administrator
or designated beneficiary, as applicable, any benefits accrued under the
Company's benefit plans and programs. Otherwise, the Company shall have no
further liability or obligation under this Agreement to Executive's executors,
legal representatives, administrators, heirs or assigns or any other person
claiming under or through Executive. In addition, Executive shall be entitled to
the annual bonus, if any, payable for the fiscal year in which the termination
occurs (prorated to reflect Executive's actual period of service during such
fiscal year) without regard to the last sentence of Section 1.5.
2.7 Cause. The Company may terminate Executive's employment at any
time for Cause (as defined in Section 2.9) upon written notice to Executive, in
which event all payments under this Agreement shall cease. Executive shall be
entitled to any benefits accrued before Executive's termination in accordance
with the terms of any applicable benefit plans and programs of the Company.
2.8 Notice of Termination. Any termination of Executive's
employment shall be communicated by a written notice of termination to the other
party hereto given in accordance with Section 11. The notice of termination
shall (i) indicate the specific termination provision in this Agreement relied
upon, (ii) briefly summarize the facts and circumstances deemed to provide a
basis for a termination of employment and the applicable provision hereof, and
(iii) specify the termination date in accordance with the requirements of this
Agreement.
2.9 Definitions.
(a) "Cause" shall mean any of the following grounds for
termination of Executive's employment:
(i) Executive shall have been convicted of a
felony, or enters in a plea of guilty or nolo contendere with respect thereto;
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(ii) Executive intentionally and continually
fails to perform Executive's reasonably assigned material duties to the Company
(other than a failure resulting from Executive's incapacity due to physical or
mental illness), which failure has continued for a period of at least 30 days
after a written notice of demand for substantial performance, signed by a duly
authorized officer of the Company, has been delivered to Executive specifying
the manner in which Executive has failed substantially to perform;
(iii) Executive causes material, intentional,
wrongful damage to the property of the Company;
(iv) Executive engages in public conduct that is
harmful to the reputation of the Company;
(v) Executive engages in willful misconduct in
the performance of Executive's duties; or
(vi) Executive materially breaches Xxxxxxxx 0, 0,
0 xx 0 xxxxx.
(x) "Change of Control" shall mean:
(i) A merger, consolidation or reorganization
approved by the Company's stockholders, unless securities representing more than
fifty percent (50%) of the total combined voting power of the outstanding voting
securities of the successor corporation are immediately thereafter beneficially
owned, directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Company's outstanding voting securities
immediately prior to such transaction; or
(ii) The sale, transfer or other disposition of
all or substantially all of the Company's assets as an entirety or substantially
as an entirety to any person, entity or group of persons acting in consort,
other than a sale, transfer or disposition to an entity at least fifty percent
(50%) of the combined voting power of the voting securities of which is owned by
the Company or by stockholders of the Company in substantially the same
proportion as their ownership of the Company immediately prior to such
transaction;
(iii) Any transaction or series of related
transactions pursuant to which any person or any group of persons comprising a
"group" within the meaning of Rule13d-5(b)(1) under the Securities Exchange Act
of 1934, as amended (other than the Company or a person that, prior to such
transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Company) becomes directly
or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing (or
convertible into or exercisable for securities possessing) more than fifty
percent (50%) of the total combined voting power of the Company's securities
outstanding immediately after the consummation of such transaction or series of
related transactions, whether such transaction involves a direct issuance from
the Company or the acquisition of outstanding securities held by one or more of
the Company's stockholders; or
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(iv) A change in the composition of the Board
over a period of thirty-six (36) consecutive months or less such that a majority
of the Board members ceases by reason of one or more contested elections for
Board membership to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time the Board approved such election or nomination;
(v) The liquidation or winding up of the
Company's business;
(vi) Any other transaction or event which
constitutes a "change in control" for purposes of the Company's 2006 Stock
Incentive Plan;
(vii) Any event or transaction that a majority of
the Incumbent Directors who are "independent directors" (as such term is defined
under the Marketplace Rules of the National Association of Securities Dealers,
Inc.) determine to be a "Change of Control."
A transaction shall not constitute a Change of Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in the same proportions by the persons who held the Company's
securities immediately before such transaction.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(d) "Good Reason" shall mean the occurrence of any of the
following events or conditions, unless Executive has expressly consented in
writing thereto, or except as a result of Executive's physical or mental
incapacity or as described in the last sentence of this subsection (c):
(i) A reduction in Executive's Base Salary;
(ii) The material diminution of the Executive's
duties, responsibilities, powers or authorities, including the assignment of any
duties and responsibilities inconsistent with her position as President and
Chief Executive Officer; or
(iii) The Company requires that Executive's
principal office location be moved to a location more than 50 miles from
Executive's principal office location immediately before the change.
Notwithstanding the foregoing, Executive shall not have Good Reason for
termination unless Executive gives written notice of termination for Good Reason
within 15 days after the event giving rise to Good Reason occurs and the Company
does not correct the action or failure to act that constitutes the grounds for
Good Reason, as set forth in Executive's notice of termination, within 30 days
after the date on which Executive gives written notice of termination.
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2.10 Required Postponement for Specified Executives.
(a) If Executive is considered a Specified Executive (as
defined below) and payment of any amounts under this Agreement is required to be
delayed for a period of six months after separation from service pursuant to
Section 409A of the Code, payment of such amounts shall be delayed as required
by section 409A, and the accumulated postponed amounts, with accrued interest as
described below, shall be paid in a lump sum payment within five days after the
end of the six month period. If Executive dies during the postponement period
prior to the payment of benefits, the amounts postponed on account of Section
409A, with accrued interest as described in subsection (b) below, shall be paid
to the personal representative of Executive's estate within 60 days after the
date of Executive's death.
(b) If payment of any amounts under this Agreement is
required to be delayed pursuant to section 409A of the Code, the Company shall
pay interest on the postponed payments from the date on which the amounts
otherwise would have been paid to the date on which such amounts are paid at an
annual rate equal to the rate published in the Wall Street Journal as the "prime
rate" as of Executive's date of termination.
(c) The term "Specified Executive" means an employee who,
at any time during the 12-month period ending on the identification date
(defined below), is (i) an officer of the Company or a member of its controlled
group (as determined for purposes of section 416(i) of the Code) who has annual
compensation greater than $135,000 (or such other amount as may be in effect
under Section 416(i)(1) of the Code), (ii) a 5% owner of the Company or (iii) a
1% owner of the Company who has annual compensation greater than $150,000. The
identification date shall be each December 31, and the determination of
Specified Executives as of such identification date shall apply for the 12-month
period following April 1 after the identification date. The determination of
Specified Executives, including the number and identity of persons considered
officers, shall be made by the Company in accordance with the provisions of
Sections 416(i) and 409A of the Code and the regulations issued thereunder.
3. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit Executive's continuing or future participation in or rights under any
benefit, bonus, incentive or other plan or program provided by the Company and
for which Executive may qualify; provided, however, that if Executive becomes
entitled to and receives the payments provided for in Section 2 of this
Agreement, Executive hereby waives Executive's right to receive payments under
any severance plan or similar program applicable to all employees of the
Company.
4. Confidentiality. Executive agrees that Executive's services to the
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Company and its subsidiaries and any successors or assigns (collectively, the
"Employer") were and are of a special, unique and extraordinary character, and
that Executive's position places Executive in a position of confidence and trust
with the Employer's customers and employees. Executive also recognizes that
Executive's position with the Employer will give Executive substantial access to
Confidential Information (as defined below), the disclosure of which to
competitors of the Employer would cause the Employer to suffer substantial and
irreparable damage. Executive recognizes, therefore, that it is in the
Employer's legitimate business interest to restrict Executive's use of
Confidential Information for any purposes other than the discharge of
Executive's employment duties at the Employer, and to limit any potential
appropriation of Confidential Information by Executive for the benefit of the
Employer's competitors and to the detriment of the Employer. Accordingly,
Executive agrees as follows:
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(a) Executive will not at any time, whether during or after the
termination of Executive's employment, reveal to any person or entity any of the
trade secrets or confidential information of the Employer or of any third party
which the Employer is under an obligation to keep confidential (including but
not limited to trade secrets or confidential information respecting inventions,
products, designs, methods, know-how, techniques, systems, processes, software
programs, works of authorship, customer lists, projects, plans and proposals)
("Confidential Information"), except as may be required in the ordinary course
of performing Executive's duties as an employee of the Employer, and Executive
shall keep secret all matters entrusted to Executive and shall not use or
attempt to use any such information in any manner which may injure or cause loss
or may be calculated to injure or cause loss whether directly or indirectly to
the Employer.
(b) The above restrictions shall not apply to: (i) information
that at the time of disclosure is in the public domain through no fault of
Executive; (ii) information received from a third party outside of the Employer
that was disclosed without a breach of any confidentiality obligation; (iii)
information approved for release by written authorization of the Employer; or
(iv) information that may be required by law or an order of any court, agency or
proceeding to be disclosed; provided Executive shall provide the Employer notice
of any such required disclosure once Executive has knowledge of it and will help
the Employer to the extent reasonable to obtain an appropriate protective order.
(c) Further, Executive agrees that during Executive's employment
Executive shall not take, use or permit to be used any notes, memoranda,
reports, lists, records, drawings, sketches, specifications, software programs,
data, documentation or other materials of any nature relating to any matter
within the scope of the business of the Employer or concerning any of its
dealings or affairs otherwise than for the benefit of the Employer. Executive
further agrees that Executive shall not, after the termination of Executive's
employment, use or permit to be used any such notes, memoranda, reports, lists,
records, drawings, sketches, specifications, software programs, data,
documentation or other materials, it being agreed that all of the foregoing
shall be and remain the sole and exclusive property of the Employer and that,
immediately upon the termination of Executive's employment, Executive shall
deliver all of the foregoing, and all copies thereof, to the Employer, at its
main office.
(d) Executive agrees that upon the termination of Executive's
employment with the Employer, Executive will not take or retain without written
authorization any documents, files or other property of the Employer, and
Executive will return promptly to the Employer any such documents, files or
property in Executive's possession or custody, including any copies thereof
maintained in any medium or format. Executive recognizes that all documents,
files and property which Executive has received and will receive from the
Employer, including but not limited to scientific research, customer lists,
handbooks, memoranda, product specifications, and other materials (with the
exception of documents relating to benefits to which Executive might be entitled
following the termination of Executive's employment with the Employer), are for
the exclusive use of the Employer and employees who are discharging their
responsibilities on behalf of the Employer, and that Executive has no claim or
right to the continued use, possession or custody of such documents, files or
property following the termination of Executive's employment with the Employer.
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5. Intellectual Property.
---------------------
(a) If at any time or times during Executive's employment
Executive shall (either alone or with others) make, conceive, discover or reduce
to practice any invention, modification, discovery, design, development,
improvement, process, software program, work of authorship, documentation,
formula, data, technique, know-how, secret or intellectual property right
whatsoever or any interest therein (whether or not patentable or registrable
under copyright or similar statutes or subject to analogous protection) (herein
called "Developments") that (i) relates to the business of the Employer or any
customer of or supplier to the Employer or any of the products or services being
developed, manufactured or sold by the Employer or which may be used in relation
therewith, (ii) results from tasks assigned to Executive by the Employer or
(iii) results from the use of premises or personal property (whether tangible or
intangible) owned, leased or contracted for by the Employer, such Developments
and the benefits thereof shall immediately become the sole and absolute property
of the Employer and its assigns, and Executive shall promptly disclose to the
Employer (or any persons designated by it) each such Development, and Executive
hereby assigns any rights Executive may have or acquire in the Developments and
benefits and/or rights resulting therefrom to the Employer and its assigns
without further compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto (with
all necessary plans and models) to the Employer.
(b) Upon disclosure of each Development to the Employer,
Executive will, during Executive's employment and at any time thereafter, at the
request and cost of the Employer, sign, execute, make and do all such deeds,
documents, acts and things as the Employer and its duly authorized agents may
reasonably require:
(i) to apply for, obtain and vest in the name of
the Employer alone (unless the Employer otherwise directs) letters patent,
copyrights or other analogous protection in any country throughout the world and
when so obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in
respect of such applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other analogous
protection.
(c) In the event the Employer is unable, after reasonable
effort, to secure Executive's signature on any letters patent, copyright or
other analogous protection relating to a Development, whether because of
Executive's physical or mental incapacity or for any other reason whatsoever,
Executive hereby irrevocably designates and appoints the Employer and its duly
authorized officers and agents as Executive's agent and attorney-in-fact, to act
for and on Executive's behalf and stead to execute and file any such application
or applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letter patents, copyright and other analogous
protection thereon with the same legal force and effect as if executed by
Executive.
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6. Non-Competition. While Executive is employed at the Employer and for a
---------------
period of two (2) years after termination of Executive's employment (for any
reason whatsoever, whether voluntary or involuntarily), Executive will not,
without the prior written approval of the Board, whether alone or as a partner,
officer, director, consultant, agent, employee or stockholder of any company or
other commercial enterprise, directly or indirectly engage in any business or
other activity in the United States or Canada which competes with the Employer
in the field of therapeutic antibodies for cancer. The foregoing prohibition
shall not prevent Executive's employment or engagement after termination of
Executive's employment by any company or business organization, as long as the
activities of any such employment or engagement, in any capacity, do not involve
work on matters related to the products being developed, manufactured, or
marketed by the Employer during Executive's employment with the Employer.
Executive shall be permitted to own securities of a public company not in excess
of five percent of any class of such securities and to own stock, partnership
interests or other securities of any entity not in excess of five percent of any
class of such securities and such ownership shall not be considered to be in
competition with the Employer.
7. Non-Solicitation. While Executive is employed at the Employer and for a
----------------
period of two (2) years after termination of such employment (for any reason,
whether voluntary or involuntarily), Executive agrees that Executive will not:
(a) directly or indirectly solicit, entice or induce any
customer to become a customer of any other person, firm or corporation with
respect to products then sold or under development by the Employer or to cease
doing business with the Employer, and Executive shall not approach any such
person, firm or corporation for such purpose or authorize or knowingly approve
the taking of such actions by any other person; or
(b) directly or indirectly solicit or recruit any
employee of the Employer to work for a third party other than the Employer
(excluding newspaper or similar print or electronic solicitations of general
circulation).
8. General Provisions.
------------------
(a) Executive acknowledges and agrees that the type and
periods of restrictions imposed in Sections 4, 5, 6 and 7 of this Agreement are
fair and reasonable, and that such restrictions are intended solely to protect
the legitimate interests of the Employer, rather than to prevent Executive from
earning a livelihood. Executive recognizes that the Employer competes worldwide,
and that Executive's access to Confidential Information makes it necessary for
the Employer to restrict Executive's post-employment activities in any market in
which the Employer competes, and in which Executive's access to Confidential
Information and other proprietary information could be used to the detriment of
the Employer. In the event that any restriction set forth in this Agreement is
determined to be overbroad with respect to scope, time or geographical coverage,
Executive agrees that such a restriction or restrictions should be modified and
narrowed, either by a court or by the Employer, so as to preserve and protect
the legitimate interests of the Employer as described in this Agreement, and
without negating or impairing any other restrictions or agreements set forth
herein.
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(b) Executive acknowledges and agrees that if Executive
should breach any of the covenants, restrictions and agreements contained
herein, irreparable loss and injury would result to the Employer, and that
damages arising out of such a breach may be difficult to ascertain. Executive
therefore agrees that, in addition to all other remedies provided at law or at
equity, the Employer shall be entitled to have the covenants, restrictions and
agreements contained in Sections 4, 5, 6, and 7 specifically enforced
(including, without limitation, by temporary, preliminary, and permanent
injunctions and restraining orders) by any state or federal court in the State
of New Jersey having equity jurisdiction and Executive agrees to subject
Executive to the jurisdiction of such court.
(c) Executive agrees that if the Employer fails to take
action to remedy any breach by Executive of this Agreement or any portion of the
Agreement, such inaction by the Employer shall not operate or be construed as a
waiver of any subsequent breach by Executive of the same or any other provision,
agreement or covenant.
(d) Executive acknowledges and agrees that the payments
and benefits to be provided to Executive under this Agreement are provided as
consideration for the covenants in Sections 4, 5, 6, and 7 hereof.
9. Survivorship. The respective rights and obligations of the parties
------------
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.
10. Mitigation. Executive shall not be required to mitigate the amount of
----------
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.
11. Notices. All notices and other communications required or permitted
-------
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Immunomedics, Inc.
000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
If to Executive, to:
Xxxxxxx X. Xxxxxxxx
-------------------
-------------------
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or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
12. Contents of Agreement; Amendment and Assignment.
-----------------------------------------------
(a) This Agreement sets forth the entire understanding
between the parties hereto with respect to the subject matter hereof and
supercedes any and all prior agreements, including the Prior Employment
Agreement, and understandings concerning Executive's employment by the Company
and cannot be changed, modified, extended or terminated except upon written
amendment approved by the Board and executed on its behalf by a duly authorized
officer and by Executive.
(b) All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, executors, administrators, legal representatives, successors
and assigns of the parties hereto, except that the duties and responsibilities
of Executive under this Agreement are of a personal nature and shall not be
assignable or delegatable in whole or in part by Executive. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, within 15 days of such succession, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform if no such succession had
taken place.
13. Severability. If any provision of this Agreement or application thereof
------------
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
14. Remedies Cumulative; No Waiver. No remedy conferred upon a party by
------------------------------
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission by a party in exercising any right, remedy or power
under this Agreement or existing at law or in equity shall be construed as a
waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.
15. Withholding. All payments under this Agreement shall be made subject to
-----------
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
Except as otherwise provided by Section 2.3, Executive shall bear all expense
of, and be solely responsible for, all federal, state and local taxes due with
respect to any payment received under this Agreement.
15
16. Miscellaneous. This Agreement may be executed in counterparts, each of
-------------
which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
17. Governing Law. This Agreement shall be governed by and interpreted
-------------
under the laws of the State of New Jersey without giving effect to any conflict
of laws provisions or canons of construction that construe agreements against
the draftsperson.
18. Section 409A of the Code. This Agreement is intended to comply with
------------------------
Section 409A of the Code and its corresponding regulations, to the extent
applicable. Notwithstanding anything in this Agreement to the contrary, payments
may only be made under this Agreement upon an event and in a manner permitted by
Section 409A of the Code, to the extent applicable.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
IMMUNOMEDICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President,
Finance and Business
Development, and
Chief Financial Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
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