IMMUCELL CORP /DE/
2000 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
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<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>2000 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
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                                                                    EXHIBIT 10.3
                                                                    ------------

                              IMMUCELL CORPORATION

         2000 Stock Option Plan for Outside Directors of the Registrant


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                              IMMUCELL CORPORATION

                  2000 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

1. PURPOSE. The purpose of this 2000 Stock Option Plan for Outside Directors
(the "Plan") is to attract and retain the continued services of non-employee
directors of ImmuCell Corporation (the "Company") with the requisite
qualifications and to encourage such directors to secure or increase on
reasonable terms their stock ownership in the Company. The Board of Directors of
the Company (the "Board") believes that the granting of options (the "Options")
under the plan will promote continuity of management and increased personal
interest in the welfare of the Company by those who are responsible for shaping
and carrying out the long-range plans of the Company and securing its continued
growth and financial success.

2. EFFECTIVE DATE OF THE PLAN. The Plan has been adopted by the Board on
February 17, 2000, but shall not become effective until approved by the
Stockholders of the Company. The date of approval by the Stockholders is herein
referred to as the "Effective Date". If the Plan is not approved by the
Stockholders of the Company prior to October 1, 2001 this plan shall be null and
void and shall be of no effect.

3. STOCK SUBJECT TO PLAN. 120,000 of the authorized but unissued shares of the
Company's common stock, par value $.10 per share, (the "Shares") have been
reserved for issuance upon the exercise of Options; provided, however, that the
number of Shares so reserved may from time to time be reduced to the extent that
a corresponding number of treasury shares are set aside for issuance upon the
exercise of Options. If any Options expire or terminate for any reason without
having been exercised in full, the unpurchased Shares subject thereto shall
again be available for the grant of Options.

4. ADMINISTRATION. The Plan shall be administered by the Compensation and Stock
Option Committee (the "Committee") appointed by the Board referred to in Section
5 hereof. Subject to the provision of the Plan, the Committee shall have
complete authority in its discretion to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to prescribe the form of
agreement evidencing Options granted under this Plan and to make all other
determinations necessary or advisable for the administration of the Plan;
provided, however, that the Committee shall have no discretion to determine the
non-employee directors who will receive Options, the number of Shares subject to
Options, the terms upon which, the times at which or the periods within which
Shares may be acquired or the Options may be acquired and exercised.

5. COMMITTEE. The Committee shall consist of at least two members of the Board,
each of whom shall be a "non-employee director" as defined in Rule 16b-3 under
the Securities Exchange Act of 1934, as such rule may hereafter be amended
("Rule 16b-3").

         The Board, at its pleasure, may remove members from or add members to
the Committee. A majority of Committee members shall constitute a quorum of
members and the actions of the majority shall be final and binding on the whole
Committee. Any decision or determination of the Committee reduced to writing and
signed by all of the members of the Committee shall be fully effective as if it
had been made at a meeting duly called and held.

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6. ELIGIBILITY. An Option may be granted only to members of the Board who are
not otherwise employees of the Company or any of its parents or subsidiaries on
the date of grant and have not been employees of the Company or any of its
subsidiaries at any time since the beginning of the preceding fiscal year (the
"Participants").

7. GRANT OF OPTIONS AND OPTION PRICE. Each individual who is a Participant on
the Effective Date shall automatically be granted on the Effective Date an
Option to purchase 15,000 Shares.

         Directors who are newly elected to the Board subsequent to the
Effective Date shall receive an automatic grant of an Option to purchase 15,000
Shares on the date when such director is first elected to the Board by the
Stockholders of the Company, provided, however, that such automatic grant shall
only be made if the new director is a Participant on the date of his election by
the Stockholders, and the number of Shares subject to future grant under the
Plan is sufficient to make the automatic grant required to be made pursuant to
the Plan on such date.

         In the event a new non-employee director is appointed by the Board to
fill a vacant directorship position, the new director will not be eligible for
an automatic grant of Options until he or she has been elected to that position
at the Annual Meeting of the Stockholders of the Company.

         The initial per Share price to be paid by a Participant upon the
exercise of an Option shall be equal to the fair market value of a Share on the
date of grant. For the purpose thereof, the fair market value of a Share on any
date shall be equal to the last sales price on such date (or if no such sale
occurred on that date, on the next preceding date on which there was such a
sale), as reported by The Nasdaq SmallCap Market or if no such prices are
available, the fair market value as determined by rules to be adopted by the
Committee.

8. OPTION PERIOD. The period within which each Option may be exercised shall
expire, in all cases, five (5) years from the date the Option is granted, unless
terminated sooner pursuant to Section 12 or fully exercised prior to the end of
such period.

9. EXERCISE AND PAYMENT. An Option may be exercised at any time and from time to
time, subject to the limitations set forth in Section 10, by the delivery to the
Company of a written notice of intent to exercise the Option with respect to a
specified number of Shares and payment to the Company of the exercise price for
the number of Shares with respect to which the Option is then exercised. All or
any portion of such payment may be made in kind by the delivery of Shares having
a fair market value (as determined in the manner set forth in Section 7 hereof),
on the date of delivery, equal to the portion of the Option exercised price so
paid; provided, however, that no such payment may be made by the delivery of
Shares unless the holder has held such Shares for more than six months.

10. VESTING; SERVICE REQUIRED FOR EXERCISE. For those directors who are
Participants on the Effective Date, each Option shall become exercisable as to
one-third (1/3) of the Shares subject to the Option on the first business day
after the 2001 Annual Meeting of Stockholders, as to an additional one-third
(1/3) of the Shares subject to the Option on the first business day after the
2002 Annual Meeting of the Stockholders, and as to the remaining one-third (1/3)
of the Shares

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on the first business day after the 2003 Annual Meeting of Stockholders
providing service by the holder thereof, as a director of the Company, since the
date of the grant of the Option has been continuous.

         For those directors who become Participants subsequent to the Effective
Date, each Option shall become exercisable as to one-third (1/3) of the Shares
subject to the Option on the first business day after the first Annual Meeting
of Stockholders subsequent to the Annual Meeting at which the Participant is
first elected to the Board of Directors by the Stockholders, as to an additional
one-third (1/3) of the Shares on the first business day after the second such
succeeding Annual Meeting of Stockholders, and as to the remaining one-third
(1/3) of the Shares on the first business day after the third such succeeding
Annual Meeting of Stockholders providing service by the holder thereof, as a
director of the Company, since the date of the grant of the Option has been
continuous. The Option shall not be exercisable as to any Shares as to which the
continuous service requirement shall not be satisfied, regardless of the
circumstances under which the holder's service to the Company shall be
terminated. The number of Shares as to which the Option may be exercised shall
be cumulative, so that once the Option shall become exercisable as to any Shares
it shall continue to be exercisable as to such Shares, until the expiration or
termination of the Option as provided in the Plan.

         Notwithstanding anything to the contrary set forth in the foregoing, no
Option granted hereunder shall become exercisable unless the Plan shall have
been approved by the stockholders of the Company.

11. TRANSFERABILITY. No Option shall be assignable or transferable except by
will and/or by the laws descent and distribution and, during the life of any
Participant, each Option granted to the Participant may be exercised only by the
Participant.

12.  CEASING TO BE A DIRECTOR.

         (A) TERMINATION. If a Participant terminates service as a director for
any reason other than disability, death or retirement, any outstanding Option
held by the Participant shall terminate on the earlier of the date on which such
Option would otherwise expire or three (3) months after such termination;
provided, however, that if such termination is for cause, such option shall
expire on the date of termination.

         (B) DISABILITY. If a Participant's service as a director is terminated
by disability, the terms of any then outstanding Option held by the Participant
shall terminate on the earlier of the date on which such Option would otherwise
expire or one (1) year after such termination.

         (C) DEATH. If a Participant's service as a director is terminated by
death, the representative of the Participant's estate or beneficiaries thereof
to whom the Option has been transferred shall have the right during the period
commencing on the date of the Participant's death and ending on the earlier of
the date on which such Option would otherwise expire or one (1) year after such
termination to exercise any then outstanding Options in whole or in part.

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         (D) RETIREMENT. If a Participant's service as a director is terminated
by retirement in accordance with the age limits then in effect for members of
the Board, any then outstanding Option held by the Participants shall remain
outstanding and terminate in accordance with its terms.

13. DURATION OF PLAN. Unless sooner terminated, the Plan shall remain in effect
for a period of five (5) years after the Effective Date and shall thereafter
terminate. No Options may be granted after the termination of this Plan;
provided, however, that except as otherwise provided in Section 2, termination
of the Plan shall not affect any Options previously granted, or the vesting of
such Options, which Options shall remain in effect until exercised, surrendered
or cancelled, or until they have expired, all in accordance with their terms.

14. CHANGES IN CAPITAL STRUCTURE, ETC. In the event of changes in the
outstanding common stock of the Company by reasons of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations or exchange of
shares, separations, reorganizations, or liquidations, the number of Shares
available under the plan in the aggregate and the number of Shares as to which
Options may be granted to any Participant shall be correspondingly adjusted by
the Committee. In addition, the Committee shall make appropriate adjustments in
the number of Shares as to which outstanding Options, or portions thereof then
unexercised, shall relate, to the end that the Participant's proportionate
interest shall be maintained as before the occurrence of such events; such
adjustments shall be made without change in the total price applicable to the
unexercised portion of Options and with a corresponding adjustment in the Option
price per Share.

         In addition, if the Company is to be consolidated with or acquired by
another entity in a merger, sale of all or substantially all of the Company's
assets or otherwise, the Committee or the Board of Directors of any entity
assuming the obligations of the Company hereunder, may, as to outstanding
Options, either (i) provide that such Options shall be assumed, or equivalent
options shall be substituted, by the acquiring or successor corporation (or an
affiliate thereof), (ii) upon written notice to the optionees, provide that all
Options must be exercised, to the extent then exercisable, within a specified
number of days of the date of such notice, at the end of which period the
Options shall terminate, or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the Fair Market Value of the Shares subject to
such Options (to the extent then exercisable) over the exercise price thereof.

15. RIGHTS AS SHAREHOLDER. A Participant entitled to Shares as a result of the
exercise of an Option shall not be deemed for any purpose to be, or have rights
as, a Stockholder of the Company by virtue of such exercise, except to the
extent a Stock Certificate is issued therefor and then only from the date such
certificate is issued. No adjustments shall be made for dividends or
distributions or other rights for which the record date is prior to the date
such Stock Certificate is issued.

16. EXPENSES. The expenses of this Plan shall be paid by the Company.

17. COMPLIANCE WITH APPLICABLE LAW. Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates evidencing Shares to be delivered pursuant to the exercise of
an Option, unless and until the Company is

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advised by its counsel that the issuance and delivery of such certificates is in
compliance with all applicable laws and regulations of governmental authority.
The Company shall in no event be obligated to register any securities pursuant
to the Securities Act of 1933 (as now in effect or as hereafter amended) or to
take any other action in order to cause the issuance and delivery of such
certificates to comply with any such law or regulation. The committee may
require, as a condition of the issuance and delivery of such certificates and in
order to ensure compliance with such laws and regulations, that the Participant
make such covenants, agreements and representations as the Committee, it its
sole discretion, deems necessary or desirable.

18. APPLICATION OF FUNDS. Any cash proceeds received by the Company from the
sale of Shares pursuant to Options will be used for general corporate purposes.

19. AMENDMENT TO THE PLAN. The Board may from time to time suspend or
discontinue this Plan or revise or amend it in any respect whatsoever; provided,
however, that no such suspension, discontinuance, revision or amendment shall in
any manner affect any grant theretofore made without the consent of the
Participant or the transferee of the Participant, unless necessary to comply
with applicable law.

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