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 Morris Plains, New Jersey (the "Company"), and Cynthia L. Sullivan (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.

 

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         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 Sections 4, 5,

6 or 7 below.

 

                  (b)      "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

         -------------------------

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

         ---------------

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.

 

                                       11

<PAGE>

 

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.

 

                                       12

<PAGE>

 

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.

 

                                       13

<PAGE>

 

                  (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.

                  300 American Road

                  Morris Plains, NJ 07950

 

         If to Executive, to:

 

                  Cynthia L. Sullivan

 

                  -------------------

 

                  -------------------

 

                                       14

<PAGE>

 

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

<PAGE>

 

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]

 

                                       16

<PAGE>

 

         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/ Gerard G. Gorman

                                                         -----------------------

                                                  Name:  Gerard G. Gorman

                                                  Title: Senior Vice President,

                                                         Finance and Business

                                                         Development, and

                                                         Chief Financial Officer

 

                                                  EXECUTIVE

 

                                                  /s/ Cynthia L. Sullivan

                                                  ------------------------------

                                                  Cynthia L. Sullivan

 

                                       17

</TEXT>

</DOCUMENT>