CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of December 16, 1996, between
IMMUNOMEDICS, INC., a Delaware corporation having its principal executive office
at 000 Xxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Company"), and XXXX
X. XXXXX having an address at 00 Xxxxxxx Xxxx, Xxxxx, Xxx Xxxxxx 00000
("Consultant").
The Company desires to employ Consultant on the terms and conditions
set forth herein, and Consultant desires to accept such employment.
In consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, the parties agree as follows:
1. ENGAGEMENT.
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1.1. The Company agrees to retain Consultant, and Consultant agrees to
serve the Company, on the terms and conditions set forth herein for the period
(the "Term") commencing on the date hereof and ending (unless sooner terminated
as hereinafter set forth) on the earlier of (a) June 1, 1997 or (b) the
appointment or election of a Chief Operating Officer of the Company, effective
as of the date of his or her commencement of employment. Subject to the
provisions of Section 6., Consultant's services shall be rendered on a
non-exclusive basis. Consultant will apply all of his skill and experience to
the performance of his duties in such engagement.
1.2. Consultant shall devote an average of two and one-half days per
week to the performance of his duties hereunder, which shall include any time
incurred by Consultant for travel outside of the Northern New Jersey area.
1.3. Consultant shall be entitled to a vacation of two weeks, with full
compensation, during the Term.
1.4. The Company shall use its best efforts to cause Consultant to be
elected as Vice-Chairman of the Board of Directors of the Company.
2. DUTIES.
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2.1. During the Term, Consultant shall act as Chief Operating Officer
of the Company and render consulting services to the Company with respect to its
businesses, operations and prospects, including, without limitation, to:
(a) assist the Board of Directors in the recruitment of a
permanent Chief Operating Officer and the delineation of the functions to be
performed by such individual.
(b) finalize and direct the implementation of the introduction of
CEA-Scan in the United States and Europe and pursue other opportunities for
expanding the geographic market for CEA-Scan geographic and the indications for
which it can be used.
(c) develop, prioritize, obtain board acceptance of and implement
a strategic plan for developing and commercializing other of the Company's
products and technology and propose and consummate agreements with third parties
in connection therewith.
(d) recruit a Chief Financial Officer, to report to the Chairman
of the Board, Chief Executive Officer and Chief Operating Officer, delineate the
functions to be performed by such individual and prioritize the tasks to be
performed.
(e) recruit additional internal and external marketing and sales
staff as are deemed necessary to realize the full potential for CEA-Scan,
Leuko-Scan and Lympho-Scan.
(f) subject to approval by Chairman of the Board and Chief
Executive Officer, propose and implement changes in organizational structure,
propose and implement strategies and policies to strengthen employee loyalty and
reduce turnover, and propose and implement middle and senior management
performance objectives for 1997 and ensure that performance and compensation
reviews are timely and professionally completed.
(g) chair regular management team meetings to ensure internal
communications and to identify business needs and generally provide assistance
to other management personnel.
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(h) subject to time availability and other priorities of
Consultant pursuant to this Agreement, undertake such other tasks and activities
as may be agreed with the Chairman of the Board.
2.2. In rendering his services, Consultant shall report to, and be
subject to the instructions, directions and control of, the Board of Directors,
Chairman of the Board and Chief Executive Officer of the Company.
2.3. Consultant shall render his services in person at the offices of
the Company and at other locations such as Consultant's home or as necessitated
by the performance of Consultant's duties (subject to reasonable periods of
non-availability); provided, however, that Consultant shall use his reasonable
efforts to spend at least an average of two days per week at the offices of the
Company in order that Consultant may perform certain of the functions presently
being performed by the Chief Executive Officer of the Company thereby permitting
the Chief Executive Officer to devote more time to other business activities of
the Company.
3. COMPENSATION.
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3.1. During the Term, Consultant shall receive for his services
hereunder a consulting fee of $17,500 per month ("Consulting Fee"), payable
monthly in arrears, commencing January 1, 1997.
3.2. Subject to approval of the Board of Directors or the Compensation
Committee thereof, concurrently with the execution of this Agreement, Consultant
shall receive a non-qualified stock option to purchase 25,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), pursuant
to the terms of the Company's 1992 Stock Option Plan, which option (a) shall be
exercisable at a price of $5-7/8 per share (the closing price of the Common
Stock on December 13, 1996), (b) shall vest in four equal annual installments of
6,250 shares commencing on December 15, 1997, and (c) shall expire on December
15, 2006.
3.3. Consultant shall be entitled to reimbursement for all reasonable
expenses incurred by him (and, subject to the prior approval of the Chairman of
the Board of the Company, the travel expenses of Consultant's wife when
accompanying Consultant on business travel) in performing services hereunder,
provided that Consultant
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properly accounts therefor in accordance with Company policy.
3.4. Consultant acknowledges that the compensation and stock options
granted to Consultant hereunder shall be in addition to and not in lieu of any
compensation or options granted or to be granted to Consultant for services as a
director of the Company during the Company's fiscal year ended June 30, 1997.
4. TERMINATION.
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4.1. This Agreement shall terminate upon the death or permanent
disability of Consultant.
4.2. Either party may terminate this Agreement upon 15 days' prior
notice to the other party; provided, however, that no prior notice shall be
required by the Company to terminate this Agreement if Consultant (i) willfully
engages in conduct adverse to the Company, (ii) is guilty of any act of gross
misconduct, or (iii) commits any wrongful criminal act.
5. COMPENSATION UPON TERMINATION.
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5.1. Upon termination of this Agreement, the Company shall pay
Consultant his full Consulting Fee through the date of termination, and the
Company shall have no other obligations to Consultant after the date of
termination, but the Company shall retain all rights and remedies it may have
against Consultant by reason of any breach of this Agreement by Consultant.
5.2. Termination of this Agreement by the Company or Consultant, for
any reason, shall not affect in any manner Consultant's continuing obligations
under Section 6.
6. NON-COMPETE; CONFIDENTIAL INFORMATION.
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6.1. Consultant recognizes that in his position as acting Chief
Operating Officer he will be performing a highly responsible role in the very
competitive biopharmaceutical industry in which trade secrets and proprietary
information have extraordinary significance. Because of the damage which would
accrue to the Company through his association with a competitor of the Company,
due to his access to the Company's trade secrets and other proprietary
information, Consultant understands that it is
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important that the Company protect itself against such occurrence. Further,
Consultant recognizes that the assumption of the obligations set forth herein
are express conditions of his retention pursuant to this Agreement.
6.2. For the purposes of this Section 6, the "Company" shall means and
includes Immunomedics, Inc. and all of its existing, past, or future parents,
subsidiaries and Affiliates, and (b) "Affiliate" means a person or entity
controlling, controlled by, or under common control with, the Company.
6.3. (a) During his retention as a consultant by the Company,
Consultant shall not, directly or indirectly, enter into, participate in, engage
in, render services to, offer or sell any products or services to, manage,
operate, control, supervise, or engage in the solicitation of, any business or
activity which is competitive, or proposes to be competitive, with any line of
business or field of research or development activities in which the Company is
engaged or proposes to engage ("Competitive Activities").
(b) During a period of one year after his retention as a
consultant is terminated by the Company or by Consultant, Consultant shall not
engage in any Competitive Activities; PROVIDED, HOWEVER, that such restriction
shall relate only to activities competitive with any line of business or field
of research or development in which the Company is engaged or proposes to engage
at the time such retention ends; and PROVIDED, FURTHER, such restriction shall
relate only to activities which are similar to those which Consultant performed
for the Company.
(c) Consultant agrees that the covenants contained in clauses (a)
and (b) shall apply:
(i) to all of his business activities, whether as an individual for
his own account, as an employee, agent or consultant of or to any person or
entity, as a partner or joint venturer, as a guarantor or lender, as the
owner (direct or indirect) or the holder of an option to purchase an
interest in, or as a director, trustee or officer of, any entity (except
that he may own not more than 5% of any class of debt or equity securities
of a corporation whose securities are publicly traded on a national
securities exchange or on the NASDAQ system), or otherwise; and
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(ii) within the continental United States, which Consultant
acknowledges to be reasonable in view of his involvement with the Company
as set forth herein.
(d) During his retention by the Company as a consultant by the
Company, and for a period of one year after such retention is terminated by the
Company or by Consultant, Consultant shall not (i) induce or attempt to induce
or arrange for a third party to induce any person who has been an employee,
director or agent of the Company at any time during the immediately preceding
one year to discontinue their relationship with the Company, or (ii) solicit,
take away, attempt to take away, or otherwise interfere with the Company's
business relationship with any of its customers or suppliers.
6.4. Consultant agrees that, in the event of the termination of his
retention as a consultant to the Company, he can obtain employment in business
activities which are of a different or non-competing nature with his activities
as a consultant to the Company; and the enforcement of a remedy hereunder by way
of injunction will not prevent him from earning a reasonable livelihood.
Consultant further agrees that the covenants contained herein are necessary for
the protection of the Company's legitimate business interests and are reasonable
in scope and content.
6.5. (a) Consultant understands that his position with the Company
creates a relationship of trust and confidence between him and the Company.
Consultant agrees that he will not, at any time during or after the termination
of his retention as a consultant to the Company, communicate, disclose, or
otherwise make available to any person or entity other than the Company (except
and to the extent that such disclosure or use is necessary to carry out his
duties as a consultant to the Company), or use for his account or for the
benefit of any other person or entity, any information or materials proprietary
to the Company that relate to the business or affairs of the Company or any
client or customer of the Company, including, but not limited to, trade secrets
(in all and various stages of development) processes, methods of operation,
techniques, improvements, data, "know-how", marketing techniques and materials,
marketing and development plans, strategies, forecasts, customer lists and other
customer information (including, without limitation, current prospects, supplier
lists and supplier information), price lists, pricing policies, personnel
information, and financial information
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and documentation and materials relating to any of the foregoing (collectively,
"Proprietary Information").
(b) Notwithstanding the foregoing, Proprietary Information
includes, without limitation, any and all information and materials described in
the immediately preceding paragraph, whether or not obtained by Consultant with
the knowledge and permission of the Company, whether or not developed, devised,
or otherwise created in whole or in part by Consultant's efforts, and whether or
not a matter of public knowledge unless as a result of authorized disclosure.
Consultant further agrees that he will retain such knowledge and information
which he acquires and develops during his retention as a consultant respecting
such Proprietary Information in trust for the sole and exclusive benefit of the
Company and its successors and assigns.
(c) The provisions of this Section 6.5 shall apply to Proprietary
Information obtained by the Company from any third party under an agreement that
includes restrictions on disclosure known (or which reasonably should have been
known) to Consultant.
(d) Consultant acknowledges and agrees that Proprietary
Information is of incalculable value to the Company and that the Company would
suffer irreparable damage if any Proprietary Information were improperly
disclosed.
6.6. Consultant understands that if he violates the provisions of this
Section 6 the Company will suffer irreparable damage for which money damages
alone could not adequately compensate the Company and for which the Company will
have no adequate remedy at law. The Company shall have the right, in addition to
any other rights it may have, (a) to obtain in any court of competent
jurisdiction (without the posting of bond or security) injunctive relief to
restrain any breach or threatened breach of, or otherwise to specifically
enforce, the provisions of this Section 6; (b) to hold Consultant liable for all
costs and expenses of the Company resulting from such breach (including, without
limitation, reasonable attorneys' fees and expenses in dealing with his breach
and/or any suits or actions with regard thereto). If Consultant shall breach the
provisions of this Section 6, the periods specified in Section 6.2 shall be
tolled until such relief is granted, and the duration of the period between such
breach and the granting of such relief shall be added to such period.
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6.7. Consultant represents and warrants to the Company that Consultant
has not previously assumed any obligations inconsistent with those of this
Agreement.
7. MISCELLANEOUS PROVISIONS.
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7.1. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding between the parties with respect to the employment of
Consultant by the Company and supersedes all prior agreements, arrangements and
understandings between the parties with respect thereto, including, without
limitation, the Letter Agreement, dated as of August 6, 1996, between the
Company and Consultant.
7.2. MODIFICATION. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by an instrument executed by the party to be charged, or in the case of a
waiver, by the party waiving compliance.
7.3. WAIVER. The failure of either party at any time or times to
require performance of any provision of this Agreement in no manner shall affect
the right at a later time to enforce the same. No waiver by either party of a
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such breach, or a waiver of any other
term or covenant contained in this Agreement.
7.4. NOTICES. All notices, authorizations, requests, reports,
deliveries, consents, waivers, agreements and other communications required or
permitted to be given hereunder (collectively, "Communications") shall be in
writing and shall be deemed to have been duly given when (a) delivered
personally with receipt acknowledged, (b) sent by facsimile, provided that a
copy thereof is sent the same day by first class mail, (c) sent by overnight
courier or certified mail, postage prepaid, addressed to the other party at the
following address or to such other address as
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either party may thereafter specify by notice to the other:
(a) If to the Company:
Immunomedics, Inc.
000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Consultant:
Xxxx X. Xxxxx
00 Xxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All Communications shall be deemed received on the date delivered personally,
one business day after being sent by overnight courier or by facsimile or three
business days after mailing, except that a notice of change of address shall be
deemed given when actually received or upon refusal to accept delivery thereof.
7.5. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of [New Jersey] applicable to
contracts made and to be performed wholly within such state.
7.6. ASSIGNABILITY. This Agreement, and Consultant's rights and
obligations hereunder, may not be assigned by Consultant. The Company may assign
its rights, together with its obligations hereunder, to a successor by merger or
to a purchaser of all or substantially all of its assets, and such rights and
obligations shall inure to, and be binding upon, any such successor.
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7.7. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective legal representatives, heirs,
successors and permitted assigns.
7.8. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, the making, interpretation or the breach thereof, shall be
settled by arbitration in New York County, New York in accordance with the
commercial rules of the American Arbitration Association which are then
obtaining. Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof and any party to the arbitration may, if
it so elects, institute proceedings in any court having jurisdiction for the
specific performance of any award. The powers of the arbitrator shall include,
but not be limited to, the awarding of injunctive or other equitable relief but
shall not include the power to modify or amend in any respect the provisions of
this Agreement. The arbitrator shall include in any award the amount of the
reasonable attorneys' fees and disbursements and expenses of the arbitration
incurred by the prevailing party and a direction that it be paid by the other
parties within 30 days after the making of such award. In the event that the
arbitrator does not rule in favor of the prevailing party in respect of all the
claims alleged by such party, the arbitrator shall include in any award the
portion of the amount of the reasonable attorneys' fees and disbursements and
other expenses of the arbitration incurred by the prevailing party as the
arbitrator deems just and equitable under the circumstances, together with a
direction that such amounts be paid by the other parties within 30 days thereof.
Except as provided above, each party shall bear its own attorney's fees,
disbursements and other expenses and the parties shall bear equally all other
costs and expenses of the arbitration.
7.9. SURVIVAL. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
Consultant's termination of employment, irrespective of any investigation made
by or on behalf of any party.
7.10. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby and the parties will attempt to agree upon a
valid and enforceable provision which shall be a reasonable substitute for such
invalid and unenforceable
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provision in light of the tenor of this Agreement, and, upon so agreeing, shall
incorporate such substitute provision in this Agreement.
7.11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each such duplicate counterpart shall constitute an original,
any one of which may be introduced in evidence or used for any other purpose
without the production of its duplicate counterpart. Moreover, notwithstanding
that any of the parties did not execute the same counterpart, each counterpart
shall be deemed for all purposes to be an original, and all such counterparts
shall constitute one and the same instrument, binding on all of the parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
IMMUNOMEDICS, INC.
By: \s\ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
Chairman of the Board and
Chief Executive Officer
CONSULTANT
\s\ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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