8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 25, 2008

NORTHFIELD LABORATORIES INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-24050	36-3378733
(State or Other Jurisdiction of	(Commission File Number)	(IRS Employer Identification
Incorporation)		No.)

1560 Sherman Avenue
Suite 1000
Evanston, Illinois 60201-4800
(Address of Principal Executive Offices and Zip Code)

(847) 864-3500
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Employment Agreements

Steven A. Gould, M.D. & Jack J. Kogut

On February 25, 2008, Northfield Laboratories Inc. (the “Company”) entered into amended and restated employment agreements originally made as of January 28, 2005, with Steven A. Gould, M.D., the Chief Executive Officer of the Company and Jack J. Kogut, the Senior Vice President Administration of the Company, which are attached hereto as Exhibits 10.1 and 10.2, respectively.

Each employment agreement was amended to bring the following provisions, among others, into compliance with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”): (i) the payment of the annual cash bonus; (ii) the payment of certain consideration, including a cash bonus, in the event that the executive’s employment terminates as a result of his death or disability; (iii) certain payments and other consideration that are payable if the Company terminates the executive’s employment other than by reason of death, disability or cause, or if the executive terminates his employment for good reason; (iv) certain payments and other consideration that may be payable in the event of a change in control of the Company; (v) the payout provisions for the “Gross-Up Payment” (as defined in each agreement); and (vi) the addition of a Section 409A savings clause.

Also, each employment agreement was amended so that each executive has 30-days (instead of 90-days) following the date of a change in control during which if the executive voluntarily terminates his employment he will be deemed to have been terminated in connection with such change in control and, thus, be entitled to certain additional payments and other consideration.

Robert L. McGinnis

On February 25, 2008, the Company entered into an employment agreement with Robert L. McGinnis, Senior Vice President — Operations of the Company. The employment agreement is attached hereto as Exhibit 10.3.

The annual salary payable under the employment agreement is not less than $255,000, effective commencing February 25, 2008. The Board of Directors is obligated to review the salaries on an annual basis and may increase but not decrease the salaries in its discretion.

Pursuant to the employment agreement, Mr. McGinnis is entitled to receive a cash bonus payment equal to 100% of his annual base salary, as then in effect, upon the approval by Food and Drug Administration of the commercial sale of PolyHeme in the United States for any indication. He is also entitled to receive an annual cash bonus for achieving performance goals to be determined by mutual agreement of the Board of Directors and the executive. The target bonus opportunity is equal to 40% of Mr. McGinnis’s annual base salary in effect during the applicable performance year, with a maximum bonus opportunity for superior performance of 100% of his annual base salary for that year. A reduced bonus may be payable at the discretion of the Board of Directors for partial achievement of Mr. McGinnis’s performance goals.

The employment agreement entitles Mr. McGinnis to participate in all executive benefit plans and fringe benefit programs available to the Company’s senior executive officers and to receive reimbursement by the Company for financial planning and tax preparation assistance, estate planning services, annual physical examinations and legal services in connection with the negotiation of the employment agreement.

Mr. McGinnis’s employment may terminate upon his death, disability, termination by the Company for cause or voluntary termination by Mr. McGinnis at any time. He is entitled to the following payments

upon termination of his employment with the Company for any reason: (i) base salary through the date of termination, (ii) the balance of any earned but unpaid bonus, (iii) up to a maximum of 60 days of accrued but unused paid time off, (iv) all vested benefits under the Company’s benefit plans and (v) all benefit continuation and conversion rights as provided under the Company’s benefit plans. If Mr. McGinnis’s employment terminates due to death or disability, he is also entitled to receive a cash bonus equal to his target bonus payable with respect to the year in which the date of termination occurs.

Additionally, if the Company terminates Mr. McGinnis’s employment other than by reason of death, disability or cause, or if Mr. McGinnis terminates his employment for good reason, then he will be entitled to receive a cash bonus equal to his target bonus with respect to the year in which the date of termination occurs (prorated based on date of termination), as well as a lump sum cash payment of an amount equal to 200% of his annual base salary and target bonus payable with respect to that year (300% if Mr. McGinnis’s termination occurs within 12 months following a change in control of the Company or he voluntarily terminates his employment within 30 days following a change in control of the Company). In addition, Mr. McGinnis will remain eligible to participate in the Company’s insurance and similar plans for 24 months after termination (36 months if his termination occurs within 12 months following a change in control of the Company or he voluntarily terminates his employment within 30 days following a change in control of the Company). Mr. McGinnis also will be entitled to Company-paid executive level career transition assistance, immediate vesting of all unvested stock options and other equity compensation awards and the right to exercise all stock options and other equity compensation awards for 12 months following termination.

Severance Protection Agreements

On February 25, 2008, the Company entered into Severance Protection Agreements with certain of its executive officers that do not have written employment agreements with the Company, including Donna O’Neill-Mulvihill and Laurel A. Omert, M.D. Each of the Severance Protection Agreements were amended and restated solely to comply with Section 409A. A form of the Severance Protection Agreement is attached hereto as Exhibit 10.4.

Agreement to Continue Employment

On February 25, 2008, the Company entered into Agreements to Continue Employment with certain of its executive officers that do not have written employment agreements with the Company, including Donna O’Neill-Mulvihill and Laurel A. Omert, M.D. A form of the Agreement to Continue Employment is attached hereto as Exhibit 10.5.

The intent of the Agreement to Continue Employment is to retain the services of the Company’s key employees through the period during which the Company will submit its Biologics License Agreement for PolyHeme to the Food and Drug Administration and the near-term regulatory activities associated with such submission. Under the Agreement to Continue Employment, the Company agrees to (i) continue to employ the employee in such employee’s current position through December 31, 2008 (the “Period”); (ii) not reduce the level of the employee’s salary during the Period; (iii) not materially change the employee’s benefits during the Period; and (iv) if the employee receives a promotion or salary increase during the period, that such new position and/or salary will remain in effect during the Period. In addition, under the Agreement to Continue Employment, if the employee’s employment is terminated during the Period, other than if the employee voluntarily terminates his or her employment or if the Company terminates the employee as a result of the Company’s determination, in its exclusive discretion, that the employee failed to perform his or her job responsibilities, then the employee will be entitled to receive a lump sum payment of the employee’s accrued, but unused paid time off plus an amount equal to 12 months of the employee’s base salary and other consideration.

Item 9.01.      Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit No.	Description
10.1+	Employment Agreement, originally made as of January 28, 2005, by and between Steven A. Gould , M.D. and the Company, amended and restated effective as of February 25, 2008
10.2+	Employment Agreement, originally made as of January 28, 2005, by and between Jack J. Kogut and the Company, amended and restated effective as of February 25, 2008
10.3+	Employment Agreement, dated as of February 25, 2008, by and between Robert L. McGinnis and the Company
10.4+	Form of Severance Protection Agreement, dated February 25, 2008, by and between the Company and certain of its executive officers, amended and restated as of February 25, 2008.
10.5+	Form of Agreement of Continue Employment, dated February 25, 2008, by and between the Company and certain of its executive officers.

+ Management compensatory contract or plan.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 29, 2008	NORTHFIELD LABORATORIES INC.
	By:	/s/ Donna O’Neill-Mulvihill
		Donna O’Neill-Mulvihill
			Vice President Finance

EXHIBIT INDEX

Exhibit No.	Description
10.1+	Employment Agreement, originally made as of January 28, 2005, by and between Steven A. Gould , M.D. and the Company, amended and restated effective as of February 25, 2008
10.2+	Employment Agreement, originally made as of January 28, 2005, by and between Jack J. Kogut and the Company, amended and restated effective as of February 25, 2008
10.3+	Employment Agreement, dated as of February 25, 2008, by and between Robert L. McGinnis and the Company
10.4+	Form of Severance Protection Agreement, dated February 25, 2008, by and between the Company and certain of its executive officers, amended and restated as of February 25, 2008.
10.5+	Form of Agreement of Continue Employment, dated February 25, 2008, by and between the Company and certain of its executive officers.

+ Management compensatory contract or plan.

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, originally made as of this January 28, 2005, by and between Steven A. Gould, M.D. (“Executive”) and Northfield Laboratories Inc., a Delaware corporation (the “Company”), is amended effective as of this 25^th day of February, 2008.

W I T N E S S E T H :

     WHEREAS, Executive is now, and has been, employed as the Chief Executive Officer of the Company;

     WHEREAS, the Company and Executive originally entered into an Employment Agreement dated January 28, 2005 in order to continue such employment for the term set forth herein and subject to the terms and conditions set forth herein;

     WHEREAS, the Company and Executive desire to continue the Proprietary Information and Inventions Agreement entered into by and between Executive and the Company dated September 1, 1985 (the “Proprietary Information and Inventions Agreement”) in full force and effect; and

     WHEREAS, the Company and Executive now desire to amend and restate the Agreement to solely comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).

     NOW, THEREFORE, in consideration of the premises, and of the mutual covenants hereinafter set forth, the parties do hereby agree as follows:

     1. Employment. The Company agrees to employ Executive, and Executive agrees to remain in the employ of the Company, for the period (the “Employment Period”) beginning as of the original date of this Agreement and ending on the date as of which Executive’s employment is terminated pursuant to paragraph 5 of this Agreement. During the Employment Period, Executive shall serve as the Chief Executive Officer of the Company reporting to the Board of Directors of the Company and shall perform such executive and managerial duties consistent with such position as the Board of Directors of the Company shall from time to time direct. Executive shall have such duties and authority as are customarily and ordinarily exercised by executives in similar positions in similar businesses in the United States. Executive shall devote his full business time and attention to the business of the Company and its subsidiaries. Executive may (i) participate in civic, charitable and industry organizations which do not materially interfere with his duties and (ii) serve on the board of directors of one non-competing for-profit business which does not materially interfere with his duties, it being understood that any additional

non-competing for-profit board memberships shall require the consent of the Board of Directors of the Company.

     2. Location. Executive shall be based at the Company’s headquarters in Evanston, Illinois, or at such other location as may be agreed upon by Executive and the Board of Directors of the Company. Executive shall, however, also travel to other locations at such times as may be reasonably required for the performance of his duties under this Agreement; provided that the frequency and duration of such travel shall not be substantially greater than the frequency and duration of Executive’s travel during his employment by the Company prior to the date of this Agreement.

     3. Compensation. During the Employment Period, Executive shall be compensated as follows:

     (a) Salary. Executive shall be paid an annual base salary at a rate which is not less than $350,000 per year, effective commencing January 1, 2005. Executive’s base salary shall be reviewed by the Board of Directors of the Company on an annual basis and shall be subject to increases from time to time at the discretion of the Board of Directors. Executive’s base salary as in effect from time to time may not be decreased and shall be paid in equal, semi-monthly installments.

     (b) Bonus.

     (i) On the original date of the Agreement, Executive shall be paid a cash bonus of $100,000.

     (ii) Executive shall be paid a cash bonus equal to 150% of his annual base salary, as then in effect, on the date the Company is granted Food and Drug Administration approval for the commercial sale of PolyHeme in the United States for any indication. Such bonus will be paid within 14 days after the Company receives written notification of such approval.

     (iii) Executive shall be entitled to receive an annual cash bonus for the achievement of performance goals to be determined by mutual agreement of the Board of Directors and Executive. The annual cash bonus is payable with respect to performance during the Company’s fiscal year ending each May 31. Executive and the Board of Directors shall use their good faith efforts to agree prior to June 30 of each fiscal year on the performance goals to be applicable for such fiscal year. The target bonus opportunity shall be equal to 50% of Executive’s annual base salary, as in effect at the beginning of the fiscal year for which Executive’s performance is being measured, with a maximum bonus opportunity for superior performance of 150% of Executive’s annual base salary as so determined. A reduced bonus may be payable at the discretion of the Board of Directors

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for partial achievement of Executive’s performance goals. In no event shall any annual cash bonus be paid later than the 15^th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, in which the annual performance goals are met to the satisfaction of the Board of Directors, as the case may be, consistent with the short-term deferral rule in Treasury Regulation Section 1.409A-1(b)(4).

     (c) Award of Stock Options. On the original date of this Agreement, the Company shall award Executive stock options under the Northfield Laboratories Inc. 2003 Equity Compensation Plan to acquire 100,000 shares of the Company’s Common Stock at an exercise price per share equal to the fair market value of the Company’s Common Stock as of the date of grant. The Board of Directors of the Company may in its discretion determine to award Executive additional stock options or other forms of equity incentive compensation from time to time during the Employment Period.

     (d) Paid Time Off. Executive shall be entitled to a total of 30 days of paid time off, including vacation, sick days and other absences, during each calendar year. Unused day of paid time off may be used by Executive in succeeding calendar years, provided that Executive shall not be entitled to utilize more than a total of 60 days of paid time off during any calendar year.

     (e) Expenses. Executive shall be reimbursed for all reasonable business expenses incurred in the performance of his duties pursuant to this Agreement, to the extent such expenses are substantiated and are consistent with the general policies of the Company and its subsidiaries relating to the reimbursement of expenses of senior executive officers. The reimbursement of expenses during a calendar year will not affect the expenses eligible for reimbursement in any other calendar year. In no event shall such an expense be reimbursed after December 31 of the calendar year following the calendar year in which the expense was incurred.

     (f) Fringe Benefits. Executive shall be entitled to participate, during the Employment Period, in any and all pension, stock option, relocation, profit sharing, and other Executive benefit plans or fringe benefit programs which are from time to time maintained by the Company or its subsidiaries for their senior executive officers, in accordance with the provisions of such plans or programs as from time to time in effect.

     (g) Financial Planning and Other Services. Executive shall be entitled to reimbursement of up to $3,500 per calendar year for financial planning and tax preparation assistance; provided that any portion of such annual amount not incurred by Executive as of each December 31 shall be forfeited. In calendar year 2008, Executive shall additionally be entitled to reimbursement for up to a total of $10,000 for estate planning expenses. In no event shall an expense incurred pursuant to this paragraph (g) be reimbursed later than December 31 of the calendar year following the calendar year in which such expense was incurred.

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     (h) Annual Physical. Executive shall be entitled to reimbursement for all costs associated with an annual executive physical at a medical facility of Executive’s choice. To the extent such a cost is not paid for or reimbursed under an insurance policy or benefit plan of the Company and is taxable to the Executive, such cost shall be reimbursed no later than December 31 of the calendar year following the calendar year in which the cost was incurred.

     (i) Deduction and Withholding. All compensation and other benefits payable to or on behalf of Executive pursuant to this Agreement shall be subject to such deductions and withholding as may be agreed to by Executive or required by applicable law.

     4. Other Benefits. The compensation provisions of this Agreement shall be in addition to, and not in derogation or diminution of, any benefits that Executive or his beneficiaries may be entitled to receive under the provisions of any pension, stock option, profit sharing, disability, relocation or other Executive benefit plan now or hereafter maintained by the Company or by any of its subsidiaries. The Company shall not make any changes in such plans or arrangements which would adversely affect Executive’s rights or benefits thereunder, unless such change is made uniformly in a plan of general application to all of the Company’s or a subsidiary’s eligible Executives.

     5. Termination. Executive’s employment may be terminated without any breach of this Agreement only under the following circumstances:

     (a) Death. Executive’s employment shall terminate upon his death.

     (b) Disability. If, as a result of Executive’s incapacity due to physical or mental illness or accident, Executive shall be unable to perform in all material respects his duties as Chief Executive Officer of the Company for a period equal to the eligibility waiting period applicable under the Company’s long term disability insurance policy, the Company may terminate Executive’s employment for “disability.”

     (c) Cause. The Company may terminate Executive’s employment hereunder for “cause.” For purposes of this Agreement, “cause” shall mean the conviction of Executive of any felony or any failure by Executive to comply in all material respects with any material term of this Agreement or the Proprietary Information and Inventions Agreement which conduct or failure is materially injurious to the Company, monetarily or otherwise. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for cause without (i) at least 60 days prior written notice from the Company to Executive setting forth the reasons for the Company’s intention to terminate for cause, (ii) an opportunity to cure the stated cause during the 60-day notice period, and (iii) after all of the preceding procedures have been satisfied or made available, delivery to Executive of a Notice of Termination from the Board of Directors of the Company finding that in the good faith opinion of such Board of Directors, Executive was guilty of

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the conduct or of the failure described in the second sentence of this subparagraph, specifying the particulars in detail, and that Executive has failed to cure the stated cause.

     (d) Termination by Executive. Executive may voluntarily terminate his employment at any time. Executive’s termination of employment shall be for “good reason” if he voluntarily terminates his employment:

     (i) upon the occurrence, without the Executive’s consent, of any of the following events:

     (A) a material diminution of Executive’s duties or authority, or the assignment to Executive of duties materially inconsistent with his position, in either case, with or without a change in Executive’s title;

     (B) the institution of a requirement that Executive report to any person other than the Board of Directors;

     (C) a material diminution in Executive’s base salary or a material diminution in Executive’s benefits;

     (D) the failure of the Board of Directors to nominate Executive for election as a director in connection with any annual or special meeting of the Company’s stockholders at which directors are to be elected (Executive having indicated his willingness to be nominated as a director and to serve as a director if elected), the failure of Executive to be elected as a director by the Company’s stockholders in connection with any annual or special meeting of the Company’s stockholders at which directors are to be elected (Executive having indicated his willingness to serve as a director if elected), or Executive is removed from office as a director, without cause, by vote or consent of the Company’s stockholders; or

     (E) a material change in the geographic location at which Executive must perform services pursuant to this Agreement.

     (ii) because of a failure by the Company to comply with any material provision of this Agreement which has not been cured within 30 days after written notice of such noncompliance has been given by the Executive to the Company; or

     (iii) because of any purported termination of the Executive’s employment by the Company which is not effected pursuant to a Notice of Termination satisfying the requirements of subparagraph 5(e) hereof (and for purposes of this Agreement no such purported termination shall be effective).

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Notwithstanding the foregoing, the Executive shall not be deemed to have terminated for good reason unless, within 45 days after the initial condition giving rise to good reason, the Executive provides the Company with written notice of such condition. The Company shall have 30 days following receipt of such notice to cure the condition. If the Company does not cure such condition within the 30 day period, then the Executive’s Date of Termination shall be the first day after the 30 day cure period expires.

     (e) Notice of Termination. Any termination of Executive’s employment by the Company or by Executive (other than termination because of Executive’s death) shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision of this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

     (f) Date of Termination of Employment. “Date of Termination” shall mean (i) if Executive’s employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated for disability pursuant to subparagraph 5(b) above, 30 days after Notice of Termination is given (provided that Executive shall not have returned to the performance of his duties during such thirty-day period); (iii) if Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination which shall not be less than 30 days nor more than 60 days from the date Notice of Termination is given (except as provided in subparagraph 5(d)); provided that if within 30 days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

     6. Compensation Upon Termination of Employment.

     (a) All Terminations. Upon the termination of Executive’s employment with the Company for any reason, Executive shall be entitled to receive (i) his base salary through the Date of Termination, (ii) the balance of any earned but unpaid bonus, (iii) up to a maximum of 60 days of accrued but unused paid time off, (iv) all vested benefits under the Company’s benefit plans payable in accordance with the terms of such plans and (v) all benefit continuation and conversion rights as provided under the Company’s benefit plans. The foregoing are referred to collectively as the “Base Termination Benefit.”

     (b) Death or Disability. If Executive’s employment with the Company terminates as a result of his death or his disability, then Executive shall be entitled to receive (i) the Base Termination Benefit and (ii) a cash bonus equal to his target

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bonus payable with respect to the year in which the Date of Termination occurs, with such amounts paid no later than the 15^th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, of the Date of Termination.

     (c) Cause. If Executive’s employment is terminated by the Company for cause, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (d) Breach; Termination for Good Reason. If (A) the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c) or (B) Executive terminates his employment for good reason, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 200% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 24 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

     For purposes of compliance with Section 409A, the following provisions shall apply. Payments pursuant to clauses (ii) and (iii) shall be paid to Executive no later than the 15^th day of the third month following the later of (A) the end of the Company’s fiscal year that includes the Date of Termination, or (B) the end of the calendar year that includes the Date of Termination. To the extent that any payment of medical benefits provided pursuant to clause (iv) does not qualify for exemption from Section 409A, such payment shall meet the requirements of Section 409A by satisfying the

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following conditions: (A) the amount of payment in any one taxable year may not affect the amount of payment in another taxable year; and (B) any such payment reimbursing Executive or his eligible dependents for an expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred. In addition, career transition assistance provided pursuant to clause (v) shall not be provided beyond December 31 of the second calendar year after the calendar year that includes the Date of Termination.

     (e) Voluntary Termination. If Executive voluntarily terminates his employment with the Company other than for good reason, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (f) Termination Following a Change in Control. Notwithstanding subparagraphs 6(d) and 6(e), if (i) within the 12-month period following a change in control the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c) or Executive terminates his employment for good reason or (ii) within the 30-day period following a change in control Executive voluntarily terminates his employment with the Company, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 300% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 36 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

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     Payments and benefits provided pursuant to clauses (ii) — (v) shall be subject to the Section 409A rules set forth above in subparagraph 5(d)

     For purposes of this Agreement, a “change in control” shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 1(a) of the Current Report on Form 8-K, as in effect as of the original date of this Agreement, promulgated pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to the reporting requirements of the Exchange Act; provided that, without limitation, such a change in control shall be deemed to have occurred if:

     (i) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Company’s assets;

     (ii) the stockholders of the Company approve any plan or proposal of liquidation or dissolution of the Company;

     (iii) there shall be consummated any consolidation or merger of the Company in which the Company is not the surviving or continuing corporation, or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have, directly or indirectly, at least an 80% ownership interest in the outstanding Common Stock of the surviving corporation immediately after the merger;

     (iv) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding voting securities ordinarily having the right to vote for the election of directors; provided that no change in control shall be deemed to occur as a result of any acquisition of voting securities directly from the Company (or as a result of the exercise, conversion or exchange of any securities acquired directly from the Company) if the transaction pursuant to which such voting securities or exercisable, convertible or exchangeable securities are issued is approved by vote of at least three-quarters of the directors comprising the Incumbent Board (as defined below);

     (v) individuals who, as of the original date of this Agreement, constitute the Board of Directors of the Company (the “Board” generally, and as of the date hereof, the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided that any individual becoming a director subsequent to the original date of this Agreement whose election,

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or nomination for election by the Company’s stockholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board shall be, for purposes of this Agreement, considered as though such individual were a member of the Incumbent Board; provided further that, notwithstanding the foregoing, an individual whose initial assumption of office as a director is in connection with any actual or threatened “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated under the Exchange Act) by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) other than the Incumbent Board shall not be considered as a member of the Incumbent Board for purposes of this Agreement; or

     (vi) the Board fails to nominate Executive for election as a director in connection with any annual or special meeting of the Company’s stockholders at which directors are to be elected (Executive having indicated his willingness to be nominated as a director and to serve as a director if elected), Executive is nominated for election as a director in connection with any annual or special meeting of the Company’s stockholders at which directors are to be elected (Executive having indicated his willingness to serve as a director if elected) but is not elected as a director by the Company’s stockholders at such meeting, or Executive is removed from office as a director, with or without cause, by vote or consent of the Company’s stockholders, if, in each case, such event occurs in connection with any actual or threatened “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated under the Exchange Act) by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) other than the Incumbent Board.

     (g) Obligations under Proprietary Information and Inventions Agreement. Executive understands and agrees that if he materially breaches any material provision of the Proprietary Information and Inventions Agreement, the Company shall cease to have any obligation to make any severance or other post-employment payments under this paragraph 6. Executive further understands and agrees that the severance and other post-employment payments to be made to Executive pursuant to this paragraph 6 may be applied by the Company to satisfy its payment obligations set forth in Section 5 of the Proprietary Information and Inventions Agreement for the period during which payments are being made to Executive in accordance with this paragraph 6.

     (h) Mitigation. Executive shall not be required to mitigate the amount of any payment provided for this paragraph 6 by seeking other employment or otherwise, nor shall the amount of any payments provided in this Agreement be reduced by any compensation earned by Executive as the result of his self-employment or his employment by another employer after his Date of Termination.

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     (i) Exclusive Severance. The severance pay and benefits provided for in this paragraph 6 will be in lieu of any other severance or termination pay to which the Executive may be entitled under any Company severance or termination plan program, practice or arrangement. The Executive’s entitlement to any other compensation or benefits will be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices as in effect from time to time.

     7. Excise Tax Payments.

     (a) Right to Receive Gross-Up Payment. In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code to Executive or for Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, Executive’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to herein as the “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes and the Excise Tax, other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return, and including any Excise Tax imposed upon the Gross-Up Payment), Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

     (b) Determination Relating to Gross-Up Payment. An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm of recognized national standing selected by the Company and reasonably acceptable to Executive (the “Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation, to the Company and Executive within five days of the Date of Termination, if applicable, or such other time as requested by the Company or by Executive (provided Executive reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by Executive with respect to a Payment or Payments, it shall furnish Executive with an opinion reasonably acceptable to Executive that no Excise Tax shall be imposed with respect to any such Payment or Payments. The Gross-Up Payment, if any, as determined pursuant to this subparagraph 7(b) shall be paid by the Company to Executive within five days after the receipt of the Determination. Within ten days after the delivery of the Determination to Executive, Executive shall have the right to dispute the Determination (the “Dispute”). The existence of the Dispute shall not in any way affect Executive’s right to receive the Gross-Up Payment in accordance

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with the Determination. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and Executive, subject to the application of the provisions of subparagraph 7(c).

     (c) Excess Payment and Underpayment. As a result of uncertainty in the application of Sections 280G and 4999 of the Code, it is possible that a Gross-Up Payment (or a portion thereof) shall be paid which should not be paid (an “Excess Payment”) or that a Gross-Up Payment (or a portion thereof) which should be paid shall not be paid (an “Underpayment”). An Underpayment shall be deemed to have occurred (i) upon notice (formal or informal) to Executive from any governmental taxing authority that Executive’s tax liability (whether in respect of Executive’s current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which the Company has failed to make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by reason of a determination by the Company (which shall include the position taken by the Company, together with its consolidated group, on its federal income tax return) or (iv) upon the resolution of the Dispute to Executive’s satisfaction. If an Underpayment occurs, Executive shall promptly notify the Company and the Company shall promptly, but in any event at least five days prior to the date on which the applicable government taxing authority has requested payment, pay to Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return) imposed on the Underpayment. An Excess Payment shall deemed to have occurred upon a Final Determination (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or portion thereof) with respect to which Executive had previously received a Gross-Up Payment. A “Final Determination” shall be deemed to have occurred when Executive has received from the applicable government taxing authority a refund of taxes or other reduction in Executive’s tax liability by reason of the Excise Payment and upon either (i) the date a determination is made by, or an agreement is entered into with, the applicable governmental taxing authority which finally and conclusively binds Executive and such taxing authority, or in the event that a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (ii) the statute of limitations with respect to Executive’s applicable tax return has expired. If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by the Company to Executive and Executive shall pay to the Company on demand (but not less than 10 days after the determination of such Excess Payment and written notice has been delivered to Executive) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to Executive until the date of repayment to the Company.

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     (d) Payment in Compliance with Section 409A. Notwithstanding the foregoing, if Executive is a “specified employee” (within the meaning of Code Section 409A) as of the Date of Termination, the Company shall pay any Gross-Up Payment due as a result of an Excise Tax or Underpayment no earlier than the first day following the six-month anniversary of the Date of Termination and no later than December 31 of the calendar year following the calendar year in which Executive pays such Excise Tax.

     (e) Payment of Excise Tax Withholding. Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the Determination, an Excise Tax is imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

     8. Successors; Binding Agreement.

     (a) Successors to the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to terminate his employment with the Company for good reason. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which executes and delivers the agreement provided for in this paragraph 8 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

     (b) Assignment. Executive’s rights and interests under this Agreement may not be assigned, pledged or encumbered by him without the Company’s written consent. This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder if he had continued to live all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s surviving spouse or, if there is no surviving spouse, to his estate.

     9. Proprietary Information. Executive and the Company have entered into the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect.

     10. Payment of Costs and Indemnification.

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     (a) Payment of Costs. In the event that a dispute arises regarding termination of Executive’s employment or the interpretation or enforcement of this Agreement, the Company shall promptly pay, or reimburse to Executive, as and when incurred, all reasonable fees and expenses (including reasonable legal fees and expenses, court costs, costs of investigation and similar expenses) incurred by Executive in contesting or disputing any such termination, in seeking to obtain or enforce any right or benefit provided for in this Agreement, or in otherwise pursuing his claim; provided, however, that the Company shall be entitled to recover from Executive the amount of any such fees and expenses paid by the Company if the Company obtains a final judgment in its favor on the merits of such dispute from a court of competent jurisdiction from which no appeal may be taken, whether because the time to do so has expired or otherwise. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) Indemnification. The Company shall indemnify and hold Executive harmless to he maximum extent permitted by law against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, incurred by Executive in connection with the defense of, or as a result of, any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that Executive is or was an Executive, officer, or director of the Company or any of its subsidiaries, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor. The undertaking of subparagraph (a) above is independent of, and shall not be limited or prejudiced by, the undertakings of this subparagraph (b). The indemnification provided in this Agreement is in addition to, and not in derogation of, any rights to indemnification or advancement of expenses to which Executive may otherwise be entitled under the Certificate of Incorporation or Bylaws of the Company, any indemnification contract or agreement, any policy of insurance or otherwise.

     (c) Warranty. The Company hereby represents and warrants that the undertakings of payment and indemnification set out in (a) and (b) above are not in conflict with the Certificate of Incorporation or Bylaws of the Company or with any validly existing agreement or other proper corporate action of the Company.

     11. Registration Rights.

     (a) Demand Registration. Upon the terms and subject to the conditions set forth in this paragraph 11, Executive or his estate or legal representative may request a single registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of all or part of the shares of the Company’s Common Stock beneficially owned by Executive or his estate (collectively, the “Registrable Securities”).

     (b) Demand Priority. The Company shall not include in the Demand Registration any securities which are not Registrable Securities without the prior

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written consent of Executive or his estate or legal representative. If the Demand Registration is an underwritten offering and the managing underwriters advise the Company that in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities which can be sold in an orderly manner in such offering within a price range acceptable to Executive or his estate or legal representative, the Company shall include in such registration prior to the inclusion of any securities which are not Registrable Securities the number of Registrable Securities requested to be included which in the opinion of such underwriters can be sold in an orderly manner within the price range of such offering.

     (c) Postponement Right. The Company may postpone for up to 90 days the filing or the effectiveness of a registration statement for the Demand Registration if the Board of Directors of the Company determines in good faith that such Demand Registration would reasonably be expected to have an adverse effect on any proposal or plan by the Company to engage in any acquisition of assets (other than in the ordinary course of business), merger, consolidation or tender offer or to enter into any material license agreement, joint venture arrangement or similar transaction; provided that in such event, the holders of Registrable Securities shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as the permitted Demand Registration hereunder and the Company shall pay all registration expenses in connection with such registration in accordance with subparagraph 11(h).

     (d) Piggyback Registrations. Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a Demand Registration) and the registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice to Executive of its intention to effect such a registration and shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after the giving of the Company’s notice.

     (e) Piggyback Priority on Company Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company shall include in such registration (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities and any other securities requested to be included in such registration by holders entitled to registration rights in connection therewith, pro rata among such holders based on the number of shares requested to be included in such registration, and (iii) third, other securities requested to be included in such registration

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     (f) Piggyback Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the holders initially requesting such registration, the Company shall include in such registration (i) first, the securities requested to be included therein by the holders requesting such registration and the Registrable Securities requested to be included therein by the holders thereof, pro rata among such holders based on the number of shares requested to be included in such registration, and (ii) second, other securities requested to be included in such registration.

     (g) Best Efforts by the Company. Whenever the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition.

     (h) Registration Expenses. The Company shall pay all expenses incident to the registration and disposition of the Registrable Securities pursuant to this Agreement, including all registration, filing and applicable securities exchange fees, all fees and expenses of complying with state securities or blue sky laws (including fees and disbursements of counsel to the underwriters or the holders of Registrable Securities in connection with “blue sky” qualification of the Registrable Securities and determination of their eligibility for investment under the laws of the various jurisdictions), all word processing, duplicating and printing expenses, all messenger and delivery expenses, the fees and disbursements of counsel for the Company and of counsel for any other person reasonably requested by the holders of a majority of the Registrable Securities included in the registration, the fees and expenses of the Company’s independent public accountants and any other independent public accountants whose opinions are included in the registration statement, including the expenses of “cold comfort” letters or any special audits required by, or incident to, such registration, all fees and disbursements of underwriters (other than underwriting discounts and commissions), all transfer taxes, and the reasonable fees and expenses of counsel and accountants to the holders of Registrable Securities; provided that the holders of Registrable Securities shall be required to pay all underwriting discounts and commissions in respect of the Registrable Securities being registered by such holders. In connection with any registration pursuant to this Agreement, the Company shall not be obligated to pay the fees and expenses for more than one counsel, other than local and special counsel, or for more than one firm of accountants representing the holders of Registrable Securities.

     (i) Indemnification by the Company. The Company agrees to indemnify, to the extent permitted by law, each holder of Registrable Securities, its officers and directors and each person who controls such holder (within the

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meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder expressly for use therein or by such holder’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with a sufficient number of copies of the same. In connection with an underwritten offering, the Company shall indemnify such underwriters, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities.

     (j) Indemnification by Holders. In connection with any registration statement in which a holder of Registrable Securities is participating, each such holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such holder; provided that the obligation to indemnify shall be individual to each holder and shall be limited to the net amount of proceeds received by such holder from the sale of Registrable Securities pursuant to such registration statement.

     (k) Limitations on Exercise. The registration rights provided in this paragraph 11 shall be exercisable only after the occurrence of a change in control of the Company.

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     12. General Provisions.

     (a) Fees and Expenses. The Company shall pay as they become due all legal fees and related expenses (including the costs of experts) incurred by Executive as a result of (i) Executive’s termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment) and (ii) Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including any such fees and expenses incurred in connection with any Dispute or Gross-Up Payment, whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which Executive is or may be entitled to receive benefits.

     In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any right of set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

     (c) Effect of Headings. The headings of all of the paragraphs and subparagraphs of this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

     (d) Modification, Amendment, Waiver. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless approved in writing by both parties. The failure at any time to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of either party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

     (e) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidly, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

     (f) No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any person.

     (g) Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois.

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     (h) Arbitration. All disputes arising out of or in connection with this Agreement shall be referred to and finally resolved by binding arbitration under American Arbitration Association’s National Rules for Resolution of Employment Disputes, which arbitration rules are incorporated herein by reference. The tribunal shall consist of a sole arbitrator. The place of arbitration shall be Chicago, Illinois. Process in any such arbitration proceeding may be served on any party anywhere in the world by notice given to the party in accordance with paragraph 12(i).

     (i) Notices. Any notice to be served under this Agreement shall be in writing and shall be mailed by registered mail, return receipt requested, addressed:

If to the Company, to:

Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422
Attention: Board of Directors

If to Executive, to:

c/o Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422

     or to such other place as either party may specify in writing, delivered in accordance with the provisions of this subparagraph.

     (j) Survival. The rights and obligations of the parties shall survive the term of Executive’s employment to the extent that any performance is required under this Agreement after the expiration or termination of such term.

     (k) Entire Agreement. This Agreement, together with the Proprietary Information and Inventions Agreement described in paragraph 9 above, constitutes the entire agreement of the parties with respect to the subject matter thereof, and supersedes all previous agreements between the parties relating to the same subject matter (but excluding the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect).

     (l) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same document.

     (m) Compliance with Section 409A. It is the intention of the Company and Executive that the provisions of this Agreement comply with Section 409A and all provisions of this Agreement will be construed and interpreted in a manner consistent with Section 409A. Any mention of “termination” of Executive’s

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employment contained herein refers to a separation from service as determined pursuant to Treasury Regulation Section 1.409A-1(h).

* * * * *

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

EXECUTIVE	NORTHFIELD LABORATORIES INC.
/s/ Steven A. Gould	By	/s/ David A. Savner
Steven A. Gould, M.D.	Its	Director and Compensation Committee Chairman

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, originally made as of January 28, 2005, by and between Jack J. Kogut (“Executive”) and Northfield Laboratories Inc., a Delaware corporation (the “Company”), is amended effective as of this 25^th day of February, 2008.

W I T N E S S E T H:

     WHEREAS, Executive is now, and has been, employed as the Senior Vice President Administration of the Company;

     WHEREAS, the Company and Executive originally entered into an Employment Agreement dated as of January 28, 2005 in order to continue such employment for the term set forth herein and subject to the terms and conditions set forth herein;

     WHEREAS, the Company and Executive desire to continue the Proprietary Information and Inventions Agreement entered into by and between Executive and the Company dated October 1, 1986 (the “Proprietary Information and Inventions Agreement”) in full force and effect; and

     WHEREAS, the Company and Executive now desire to amend and restate the Agreement to solely comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).

     NOW, THEREFORE, in consideration of the premises, and of the mutual covenants hereinafter set forth, the parties do hereby agree as follows:

     1. Employment. The Company agrees to employ Executive, and Executive agrees to remain in the employ of the Company, for the period (the “Employment Period”) beginning as of the original date of this Agreement and ending on the date as of which Executive’s employment is terminated pursuant to paragraph 5 of this Agreement. During the Employment Period, Employee shall serve as the Senior Vice President Administration of the Company and shall perform such executive and managerial duties consistent with such position as the Chief Executive Officer and Board of Directors of the Company shall from time to time direct. Executive shall have such duties and authority as are customarily and ordinarily exercised by executives in similar positions in similar businesses in the United States. Employee shall devote his full business time and attention to the business of the Company and its subsidiaries. Executive may (i) participate in civic, charitable and industry organizations which do not materially interfere with his duties and (ii) serve on the board of directors of one non-competing for-profit business which does not materially interfere with his duties, it being understood that any additional non-competing for-profit board memberships shall require the consent of the Board of Directors of the Company.

     2. Location. Executive shall be based at the Company’s headquarters in Evanston, Illinois, or at such other location as may be agreed upon by Executive and the Board of Directors of the Company. Executive shall, however, also travel to other locations at such times as may be reasonably required for the performance of his duties under this Agreement; provided that the frequency and duration of such travel shall not be substantially greater than the frequency and

duration of Executive’s travel during his employment by the Company prior to the original date of this Agreement.

     3. Compensation. During the Employment Period, Executive shall be compensated as follows:

     (a) Salary. Executive shall be paid an annual base salary at a rate which is not less than $275,625 per year, effective commencing January 1, 2005. Executive’s base salary shall be reviewed by the Board of Directors of the Company on an annual basis and shall be subject to increases from time to time at the discretion of the Board of Directors. Executive’s base salary as in effect from time to time may not be decreased and shall be paid in equal, semi-monthly installments.

     (b) Bonus.

     (i) On the original date of this Agreement, Executive shall be paid a cash bonus of $50,000.

     (ii) Executive shall be paid a cash bonus equal to 100% of his annual base salary, as then in effect, on the date the Company is granted Food and Drug Administration approval for the commercial sale of PolyHeme in the United States for any indication. Such bonus will be paid within 14 days after the Company receives written notification of such approval.

     (iii) Executive shall be entitled to receive an annual cash bonus for the achievement of performance goals to be determined by mutual agreement of the Board of Directors and Executive. The annual cash bonus is payable with respect to performance during the Company’s fiscal year ending each May 31. Executive and the Board of Directors shall use their good faith efforts to agree prior to June 30 of each fiscal year on the performance goals to be applicable for such fiscal year. The target bonus opportunity shall be equal to 40% of Executive’s annual base salary, as in effect at the beginning of the fiscal year for which Executive’s performance is being measured, with a maximum bonus opportunity for superior performance of 100% of Executive’s annual base salary as so determined. A reduced bonus may be payable at the discretion of the Board of Directors for partial achievement of Executive’s performance goals. In no event shall any annual cash bonus be paid later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, in which the annual performance goals are met to the satisfaction of the Board of Directors, as the case may be, consistent with the short-term deferral rule in Treasury Regulation Section 1.409A-1(b)(4).

     (c) Award of Stock Options. On the original date of this Agreement, the Company shall award Executive stock options under the Northfield Laboratories Inc. 2003 Equity Compensation Plan to acquire 50,000 shares of the Company’s Common Stock at an exercise price per share equal to the fair market value of the Company’s Common Stock as of the date of grant. The Board of Directors of the Company may in

2

its discretion determine to award Executive additional stock options or other forms of equity incentive compensation from time to time during the Employment Period.

     (d) Paid Time Off. Executive shall be entitled to a total of 30 days of paid time off, including vacation, sick days and other absences, during each calendar year. Unused day of paid time off may be used by Executive in succeeding calendar years, provided that Executive shall not be entitled to utilize more than a total of 60 days of paid time off during any calendar year.

     (e) Expenses. Executive shall be reimbursed for all reasonable business expenses incurred in the performance of his duties pursuant to this Agreement, to the extent such expenses are substantiated and are consistent with the general policies of the Company and its subsidiaries relating to the reimbursement of expenses of senior executive officers. The reimbursement of expenses during a calendar year will not affect the expenses eligible for reimbursement in any other calendar year. In no event shall such an expense be reimbursed after December 31 of the calendar year following the calendar year in which the expense was incurred.

     (f) Fringe Benefits. Executive shall be entitled to participate, during the Employment Period, in any and all pension, stock option, relocation, profit sharing, and other Executive benefit plans or fringe benefit programs which are from time to time maintained by the Company or its subsidiaries for their senior executive officers, in accordance with the provisions of such plans or programs as from time to time in effect.

     (g) Financial Planning and Other Services. Executive shall be entitled to reimbursement of up to $3,500 per calendar year for financial planning and tax preparation assistance; provided that any portion of such annual amount not incurred by Executive as of each December 31 shall be forfeited. In calendar year 2008, Executive shall additionally be entitled to reimbursement for up to a total of $10,000 for estate planning expenses. In no event shall an expense incurred pursuant to this paragraph (g) be reimbursed later than December 31 of the calendar year following the calendar year in which such expense was incurred.

     (h) Annual Physical. Executive shall be entitled to reimbursement for all costs associated with an annual executive physical at a medical facility of Executive’s choice. To the extent such a cost is not paid for or reimbursed under an insurance policy or benefit plan of the Company and is taxable to the Executive, such cost shall be reimbursed no later than December 31 of the calendar year following the calendar year in which the cost was incurred.

     (i) Deduction and Withholding. All compensation and other benefits payable to or on behalf of Executive pursuant to this Agreement shall be subject to such deductions and withholding as may be agreed to by Executive or required by applicable law.

     4. Other Benefits. The compensation provisions of this Agreement shall be in addition to, and not in derogation or diminution of, any benefits that Executive or his

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beneficiaries may be entitled to receive under the provisions of any pension, stock option, profit sharing, disability, relocation or other Executive benefit plan now or hereafter maintained by the Company or by any of its subsidiaries. The Company shall not make any changes in such plans or arrangements which would adversely affect Executive’s rights or benefits thereunder, unless such change is made uniformly in a plan of general application to all of the Company’s or a subsidiary’s eligible Executives.

     5. Termination. Executive’s employment may be terminated without any breach of this Agreement only under the following circumstances:

     (a) Death. Executive’s employment shall terminate upon his death.

     (b) Disability. If, as a result of Executive’s incapacity due to physical or mental illness or accident, Executive shall be unable to perform in all material respects his duties as Senior Vice President Administration of the Company for a period equal to the eligibility waiting period applicable under the Company’s long term disability insurance policy, the Company may terminate Executive’s employment for “disability.”

     (c) Cause. The Company may terminate Executive’s employment hereunder for “cause.” For purposes of this Agreement, “cause” shall mean the conviction of Executive of any felony or any failure by Executive to comply in all material respects with any material term of this Agreement or the Proprietary Information and Inventions Agreement which conduct or failure is materially injurious to the Company, monetarily or otherwise. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for cause without (1) at least 60 days prior written notice from the Company to Executive setting forth the reasons for the Company’s intention to terminate for cause, (ii) an opportunity to cure the stated cause during the 60-day notice period, and (iii) after all of the preceding procedures have been satisfied or made available, delivery to Executive of a Notice of Termination from the Board of Directors of the Company finding that in the good faith opinion of such Board of Directors, Executive was guilty of the conduct or of the failure described in the second sentence of this subparagraph, specifying the particulars in detail, and that Executive has failed to cure the stated cause.

     (d) Termination by Executive. Executive may voluntarily terminate his employment at any time. Executive’s termination of employment shall be for “good reason” if he voluntarily terminates his employment:

     (i) upon the occurrence, without the Executive’s consent, of any of the following events:

     (A) a material diminution of Executive’s duties or authority, or the assignment to Executive of duties materially inconsistent with his position, in either case, with or without a change in Executive’s title;

     (B) the institution of a requirement that Executive report to any person other than the Chief Executive Officer;

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     (C) a material diminution in Executive’s base salary or a material diminution in Executive’s benefits;

     (D) a material change in the geographic location at which Executive must perform services pursuant to this Agreement; or

     (ii) because of a failure by the Company to comply with any material provision of this Agreement which has not been cured within 30 days after written notice of such noncompliance has been given by the Executive to the Company; or

     (iii) because of any purported termination of the Executive’s employment by the Company which is not effected pursuant to a Notice of Termination satisfying the requirements of subparagraph 5(e) hereof (and for purposes of this Agreement no such purported termination shall be effective).

     Notwithstanding the foregoing, the Executive shall not be deemed to have terminated for good reason unless, within 45 days after the initial condition giving rise to good reason, the Executive provides the Company with written notice of such condition. The Company shall have 30 days following receipt of such notice to cure the condition. If the Company does not cure such condition within the 30 day period, then Executive’s Date of Termination shall be the first day after the 30 day cure period expires.

     (e) Notice of Termination. Any termination of Executive’s employment by the Company or by Executive (other than termination because of Executive’s death) shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision of this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

     (f) Date of Termination of Employment. “Date of Termination” shall mean (i) if Executive’s employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated for disability pursuant to subparagraph 5(b) above, 30 days after Notice of Termination is given (provided that Executive shall not have returned to the performance of his duties during such thirty-day period); (iii) if Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination which shall not be less than 30 days nor more than 60 days from the date Notice of Termination is given (except as provided in subparagraph 5(d)); provided that if within 30 days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

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     6. Compensation Upon Termination of Employment.

     (a) All Terminations. Upon the termination of Executive’s employment with the Company for any reason, Executive shall be entitled to receive (i) his base salary through the Date of Termination, (ii) the balance of any earned but unpaid bonus, (iii) up to a maximum of 60 days of accrued but unused paid time off, (iv) all vested benefits under the Company’s benefit plans payable in accordance with the terms of such plans and (v) all benefit continuation and conversion rights as provided under the Company’s benefit plans. The foregoing are referred to collectively as the “Base Termination Benefit.”

     (b) Death or Disability. If Executive’s employment with the Company terminates as a result of his death or his disability, then Executive shall be entitled to receive (i) the Base Termination Benefit and (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, with such amounts paid no later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, of the Date of Termination.

     (c) Cause. If Executive’s employment is terminated by the Company for cause, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (d) Breach; Termination for Good Reason. If (A) the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c), or (B) Executive terminates his employment for good reason, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 200% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 24 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

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     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

     For purposes of compliance with Section 409A, the following provisions shall apply. Payments pursuant to clauses (ii) and (iii) shall be paid to Executive no later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year that includes the Date of Termination, or (B) the end of the calendar year that includes the Date of Termination. To the extent that any payment of medical benefits provided pursuant to clause (iv) does not qualify for exemption from Section 409A, such payment shall meet the requirements of Section 409A by satisfying the following conditions: (A) the amount of payment in any one taxable year may not affect the amount of payment in another taxable year; and (B) any such payment reimbursing Executive or his eligible dependents for an expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred. In addition, career transition assistance provided pursuant to clause (v) shall not be provided beyond December 31 of the second calendar year after the calendar year that includes the Date of Termination.

     (e) Voluntary Termination. If Executive voluntarily terminates his employment with the Company other than for good reason, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (f) Termination Following a Change in Control. Notwithstanding subparagraphs 6(d) and 6(e), if (i) within the 12-month period following a change in control the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c) or Executive terminates his employment for good reason or (ii) within the 30-day period following a change in control Executive voluntarily terminates his employment with the Company, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 300% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 36 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

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     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

     Payments and benefits provided pursuant to clauses (ii)-(v) shall be subject to the Section 409A rules set forth above in subparagraph 5(d).

     For purposes of this Agreement, a “change in control” shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 1(a) of the Current Report on Form 8-K, as in effect as of the original date of this Agreement, promulgated pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to the reporting requirements of the Exchange Act; provided that, without limitation, such a change in control shall be deemed to have occurred if

     (i) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Company’s assets;

     (ii) the stockholders of the Company approve any plan or proposal of liquidation or dissolution of the Company;

     (iii) there shall be consummated any consolidation or merger of the Company in which the Company is not the surviving or continuing corporation, or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have, directly or indirectly, at least an 80% ownership interest in the outstanding Common Stock of the surviving corporation immediately after the merger;

     (iv) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding voting securities ordinarily having the right to vote for the election of directors; provided that no change in control shall be deemed to occur as a result of any acquisition of voting securities directly from the Company (or as a result of the exercise, conversion or exchange of any securities acquired directly from the Company) if the transaction pursuant to which such voting securities or exercisable, convertible or exchangeable securities are issued is approved by vote of at least three-quarters of the directors comprising the Incumbent Board (as defined below); or

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     (v) individuals who, as of the original date of this Agreement, constitute the Board of Directors of the Company (the “Board” generally, and as of the date hereof, the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided that any individual becoming a director subsequent to the original date of this Agreement whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board shall be, for purposes of this Agreement, considered as though such individual were a member of the Incumbent Board; provided further that, notwithstanding the foregoing, an individual whose initial assumption of office as a director is in connection with any actual or threatened “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated under the Exchange Act) by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) other than the Incumbent Board shall not be considered as a member of the Incumbent Board for purposes of this Agreement.

     (g) Obligations under Proprietary Information and Inventions Agreement. Executive understands and agrees that if he materially breaches any material provision of the Proprietary Information and Inventions Agreement, the Company shall cease to have any obligation to make any severance or other post-employment payments under this paragraph 6. Executive further understands and agrees that the severance and other post-employment payments to be made to Executive pursuant to this paragraph 6 may be applied by the Company to satisfy its payment obligations set forth in Section 5 of the Proprietary Information and Inventions Agreement for the period during which payments are being made to Executive in accordance with this paragraph 6.

     (h) Mitigation. Executive shall not be required to mitigate the amount of any payment provided for this paragraph 6 by seeking other employment or otherwise, nor shall the amount of any payments provided in this Agreement be reduced by any compensation earned by Executive as the result of his self-employment or his employment by another employer after his Date of Termination.

     (i) Exclusive Severance. The severance pay and benefits provided for in this paragraph 6 will be in lieu of any other severance or termination pay to which the Executive may be entitled under any Company severance or termination plan, program, practice or arrangement. The Executive’s entitlement to any other compensation or benefits will be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices as in effect from time to time.

     7. Excise Tax Payments.

     (a) Right to Receive Gross-Up Payment. In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to Executive or for Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, Executive’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (a “Payment”), would be subject to the

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excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to herein as the “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes and the Excise Tax, other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return, and including any Excise Tax imposed upon the Gross-Up Payment), Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

     (b) Determination Relating to Gross-Up Payment. An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm of recognized national standing selected by the Company and reasonably acceptable to Executive (the “Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation, to the Company and Executive within five days of the Date of Termination, if applicable, or such other time as requested by the Company or by Executive (provided Executive reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by Executive with respect to a Payment or Payments, it shall furnish Executive with an opinion reasonably acceptable to Executive that no Excise Tax shall be imposed with respect to any such Payment or Payments. The Gross-Up Payment, if any, as determined pursuant to this subparagraph 7(b) shall be paid by the Company to Executive within five days after the receipt of the Determination. Within ten days after the delivery of the Determination to Executive, Executive shall have the right to dispute the Determination (the “Dispute”). The existence of the Dispute shall not in any way affect Executive’s right to receive the Gross-Up Payment in accordance with the Determination. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and Executive, subject to the application of the provisions of subparagraph 7(c).

     (c) Excess Payment and Underpayment. As a result of uncertainty in the application of Sections 280G and 4999 of the Code, it is possible that a Gross-Up Payment (or a portion thereof) shall be paid which should not be paid (an “Excess Payment”) or that a Gross-Up Payment (or a portion thereof) which should be paid shall not be paid (an “Underpayment”). An Underpayment shall be deemed to have occurred (i) upon notice (formal or informal) to Executive from any governmental taxing authority that Executive’s tax liability (whether in respect of Executive’s current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which the Company has failed to make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by reason of a determination by the Company (which shall include the position taken by the Company, together with its consolidated group, on its federal income tax return) or (iv) upon the resolution of the Dispute to Executive’s satisfaction. If an Underpayment occurs, Executive shall promptly notify the Company and the Company shall promptly, but in any event at least five days prior to the date on which the applicable government

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taxing authority has requested payment, pay to Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return) imposed on the Underpayment. An Excess Payment shall deemed to have occurred upon a Final Determination (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or portion thereof) with respect to which Executive had previously received a Gross-Up Payment. A “Final Determination” shall be deemed to have occurred when Executive has received from the applicable government taxing authority a refund of taxes or other reduction in Executive’s tax liability by reason of the Excise Payment and upon either (i) the date a determination is made by, or an agreement is entered into with, the applicable governmental taxing authority which finally and conclusively binds Executive and such taxing authority, or in the event that a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (ii) the statute of limitations with respect to Executive’s applicable tax return has expired. If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by the Company to Executive and Executive shall pay to the Company on demand (but not less than 10 days after the determination of such Excess Payment and written notice has been delivered to Executive) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to Executive until the date of repayment to the Company.

     (d) Payment in Compliance with Section 409A. Notwithstanding the foregoing, if Executive is a “specified employee” (within the meaning of Code Section 409A) as of the Date of Termination, the Company shall pay any Gross-Up Payment due as a result of an Excise Tax or Underpayment no earlier than the first day following the six-month anniversary of the Date of Termination and no later than December 31 of the calendar year following the calendar year in which Executive pays such Excise Tax.

     (e) Payment of Excise Tax Withholding. Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the Determination, an Excise Tax is imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

     8. Successors; Binding Agreement.

     (a) Successors to the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to

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obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to terminate his employment with the Company for good reason. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which executes and delivers the agreement provided for in this paragraph 8 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

     (b) Assignment. Executive’s rights and interests under this Agreement may not be assigned, pledged or encumbered by him without the Company’s written consent. This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder if he had continued to live all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s surviving spouse or, if there is no surviving spouse, to his estate.

     9. Proprietary Information. Executive and the Company have entered into the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect.

     10. Payment of Costs and Indemnification.

     (a) Payment of Costs. In the event that a dispute arises regarding termination of Executive’s employment or the interpretation or enforcement of this Agreement, the Company shall promptly pay, or reimburse to Executive, as and when incurred, all reasonable fees and expenses (including reasonable legal fees and expenses, court costs, costs of investigation and similar expenses) incurred by Executive in contesting or disputing any such termination, in seeking to obtain or enforce any right or benefit provided for in this Agreement, or in otherwise pursuing his claim; provided, however, that the Company shall be entitled to recover from Executive the amount of any such fees and expenses paid by the Company if the Company obtains a final judgment in its favor on the merits of such dispute from a court of competent jurisdiction from which no appeal may be taken, whether because the time to do so has expired or otherwise. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) Indemnification. The Company shall indemnify and hold Executive harmless to he maximum extent permitted by law against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, incurred by Executive in connection with the defense of, or as a result of, any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that Executive is or was an Executive, officer, or director of the Company or any of its subsidiaries, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor. The undertaking of subparagraph (a) above is independent of, and shall not be limited or prejudiced by, the undertakings of this subparagraph (b). The indemnification provided

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in this Agreement is in addition to, and not in derogation of, any rights to indemnification or advancement of expenses to which Executive may otherwise be entitled under the Certificate of Incorporation or Bylaws of the Company, any indemnification contract or agreement, any policy of insurance or otherwise.

     (c) Warranty. The Company hereby represents and warrants that the undertakings of payment and indemnification set out in (a) and (b) above are not in conflict with the Certificate of Incorporation or Bylaws of the Company or with any validly existing agreement or other proper corporate action of the Company.

     11. General Provisions.

     (a) Fees and Expenses. The Company shall pay as they become due all legal fees and related expenses (including the costs of experts) incurred by Executive as a result of (i) Executive’s termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment) and (ii) Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including any such fees and expenses incurred in connection with any Dispute or Gross-Up Payment, whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which Executive is or may be entitled to receive benefits. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any right of set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

     (c) Effect of Headings. The headings of all of the paragraphs and subparagraphs of this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

     (d) Modification, Amendment, Waiver. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless approved in writing by both parties. The failure at any time to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of either party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

     (e) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidly, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

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     (f) No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any person.

     (g) Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois.

     (h) Arbitration. All disputes arising out of or in connection with this Agreement shall be referred to and finally resolved by binding arbitration under American Arbitration Association’s National Rules for Resolution of Employment Disputes, which arbitration rules are incorporated herein by reference. The tribunal shall consist of a sole arbitrator. The place of arbitration shall be Chicago, Illinois. Process in any such arbitration proceeding may be served on any party anywhere in the world by notice given to the party in accordance with paragraph 11(i).

     (i) Notices. Any notice to be served under this Agreement shall be in writing and shall be mailed by registered mail, return receipt requested, addressed:

     If to the Company, to:

Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422
Attention: Board of Directors

     If to Executive, to:

c/o Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422

     or to such other place as either party may specify in writing, delivered in accordance with the provisions of this subparagraph.

     (j) Survival. The rights and obligations of the parties shall survive the term of Executive’s employment to the extent that any performance is required under this Agreement after the expiration or termination of such term.

     (k) Entire Agreement. This Agreement, together with the Proprietary Information and Inventions Agreement described in paragraph 9 above, constitutes the entire agreement of the parties with respect to the subject matter thereof, and supersedes all previous agreements between the parties relating to the same subject matter (but excluding the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect).

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     (l) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same document.

     (m) Compliance with Section 409A. It is the intention of the Company and Executive that the provisions of this Agreement comply with Section 409A and all provisions of this Agreement will be construed and interpreted in a manner consistent with Section 409A. Any mention of “termination” of Executive’s employment contained herein refers to a separation from service as determined pursuant to Treasury Regulation Section 1.409A-1(h).

* * * * *

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

EXECUTIVE	NORTHFIELD LABORATORIES INC.
/s/ Jack J. Kogut	By:	/s/ David A. Savner
Jack J. Kogut	Its:	Director and Compensation Committee Chairman

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EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, originally made as of February 25, 2008, by and between Robert L. McGinnis (“Executive”) and Northfield Laboratories Inc., a Delaware corporation (the “Company”).

W I T N E S S E T H:

     WHEREAS, Executive is now, and has been, employed as the Senior Vice President – Operations of the Company;

     WHEREAS, the Company and Executive now desire to enter into an Employment Agreement in order to continue such employment for the term set forth herein and subject to the terms and conditions set forth herein;

     WHEREAS, the Company and Executive desire to continue the Proprietary Information and Inventions Agreement entered into by and between Executive and the Company dated July 24, 1997 (the “Proprietary Information and Inventions Agreement”) in full force and effect; and

     NOW, THEREFORE, in consideration of the premises, and of the mutual covenants hereinafter set forth, the parties do hereby agree as follows:

     1. Employment. The Company agrees to employ Executive, and Executive agrees to remain in the employ of the Company, for the period (the “Employment Period”) beginning as of the date of this Agreement and ending on the date as of which Executive’s employment is terminated pursuant to paragraph 5 of this Agreement. During the Employment Period, Employee shall serve as the Senior Vice President — Operations of the Company and shall perform such executive and managerial duties consistent with such position as the Chief Executive Officer and Board of Directors of the Company shall from time to time direct. Executive shall have such duties and authority as are customarily and ordinarily exercised by executives in similar positions in similar businesses in the United States. Employee shall devote his full business time and attention to the business of the Company and its subsidiaries. Executive may (i) participate in civic, charitable and industry organizations which do not materially interfere with his duties and (ii) serve on the board of directors of one non-competing for-profit business which does not materially interfere with his duties, it being understood that any additional non-competing for-profit board memberships shall require the consent of the Board of Directors of the Company.

     2. Location. Executive shall be based at the Company’s headquarters in Evanston, Illinois, or at such other location as may be agreed upon by Executive and the Chief Executive Officer of the Company. Executive shall, however, also travel to other locations at such times as may be reasonably required for the performance of his duties under this Agreement; provided that the frequency and duration of such travel shall not be substantially greater than the frequency and duration of Executive’s travel during his employment by the Company prior to the date of this Agreement.

     3. Compensation. During the Employment Period, Executive shall be compensated as follows:

     (a) Salary. Executive shall be paid an annual base salary at a rate which is not less than $255,000 per year, effective commencing February 25, 2008. Executive’s base salary shall be reviewed by the Board of Directors of the Company on an annual basis and shall be subject to increases from time to time at the discretion of the Board of Directors. Executive’s base salary as in effect from time to time may not be decreased and shall be paid in equal, bi-weekly installments.

     (b) Bonus.

     (i) Executive shall be paid a cash bonus equal to 100% of his annual base salary, as then in effect, on the date the Company is granted Food and Drug Administration approval for the commercial sale of PolyHeme in the United States for any indication. Such bonus will be paid within 14 days after the Company receives written notification of such approval.

     (ii) Executive shall be entitled to receive an annual cash bonus for the achievement of performance goals to be determined by mutual agreement of the Board of Directors and Executive. The annual cash bonus is payable with respect to performance during the Company’s fiscal year ending each May 31. Executive and the Board of Directors shall use their good faith efforts to agree prior to June 30 of each fiscal year on the performance goals to be applicable for such fiscal year. The target bonus opportunity shall be equal to 40% of Executive’s annual base salary, as in effect at the beginning of the fiscal year for which Executive’s performance is being measured, with a maximum bonus opportunity for superior performance of 100% of Executive’s annual base salary as so determined. A reduced bonus may be payable at the discretion of the Board of Directors for partial achievement of Executive’s performance goals. In no event shall any annual cash bonus be paid later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, in which the annual performance goals are met to the satisfaction of the Board of Directors, as the case may be, consistent with the short-term deferral rule in Treasury Regulation Section 1.409A-1(b)(4).

     (c) Paid Time Off. Executive shall accrue a total of 30 days of paid time off, including vacation, sick days and other absences, during each calendar year. Unused day of paid time off may be used by Executive in succeeding calendar years, provided that Executive shall not be entitled to utilize more than a total of 60 days of paid time off during any calendar year.

     (d) Expenses. Executive shall be reimbursed for all reasonable business expenses incurred in the performance of his duties pursuant to this Agreement, to the extent such expenses are substantiated and are consistent with the general policies of the

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Company and its subsidiaries relating to the reimbursement of expenses of senior executive officers. The reimbursement of expenses during a calendar year will not affect the expenses eligible for reimbursement in any other calendar year. In no event shall such an expense be reimbursed after December 31 of the calendar year following the calendar year in which the expense was incurred.

     (e) Fringe Benefits. Executive shall be entitled to participate, during the Employment Period, in any and all pension, stock option, relocation, profit sharing, and other Executive benefit plans or fringe benefit programs which are from time to time maintained by the Company or its subsidiaries for their senior executive officers, in accordance with the provisions of such plans or programs as from time to time in effect.

     (f) Financial Planning and Other Services. Executive shall be entitled to reimbursement of up to $3,500 per calendar year for financial planning and tax preparation assistance; provided that any portion of such annual amount not incurred by Executive as of each December 31 shall be forfeited. In calendar year 2008, Executive shall additionally be entitled to reimbursement for up to a total of $10,000 for estate planning expenses. In no event shall an expense incurred pursuant to this paragraph (f) be reimbursed later than December 31 of the calendar year following the calendar year in which such expense was incurred.

     (g) Annual Physical. Executive shall be entitled to reimbursement for all costs associated with an annual executive physical at a medical facility of Executive’s choice. To the extent such a cost is not paid for or reimbursed under an insurance policy or benefit plan of the Company and is taxable to the Executive, such cost shall be reimbursed no later than December 31 of the calendar year following the calendar year in which the cost was incurred.

     (h) Deduction and Withholding. All compensation and other benefits payable to or on behalf of Executive pursuant to this Agreement shall be subject to such deductions and withholding as may be agreed to by Executive or required by applicable law.

     4. Other Benefits. The compensation provisions of this Agreement shall be in addition to, and not in derogation or diminution of, any benefits that Executive or his beneficiaries may be entitled to receive under the provisions of any pension, stock option, profit sharing, disability, relocation or other Executive benefit plan now or hereafter maintained by the Company or by any of its subsidiaries. The Company shall not make any changes in such plans or arrangements which would adversely affect Executive’s rights or benefits thereunder, unless such change is made uniformly in a plan of general application to all of the Company’s or a subsidiary’s eligible Executives.

     5. Termination. Executive’s employment may be terminated without any breach of this Agreement only under the following circumstances:

     (a) Death. Executive’s employment shall terminate upon his death.

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     (b) Disability. If, as a result of Executive’s incapacity due to physical or mental illness or accident, Executive shall be unable to perform in all material respects his duties as Senior Vice President — Operations of the Company for a period equal to the eligibility waiting period applicable under the Company’s long term disability insurance policy, the Company may terminate Executive’s employment for “disability.”

     (c) Cause. The Company may terminate Executive’s employment hereunder for “cause.” For purposes of this Agreement, “cause” shall mean the conviction of Executive of any felony or any failure by Executive to comply in all material respects with any material term of this Agreement or the Proprietary Information and Inventions Agreement which conduct or failure is materially injurious to the Company, monetarily or otherwise. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for cause without (1) at least 60 days prior written notice from the Company to Executive setting forth the reasons for the Company’s intention to terminate for cause, (ii) an opportunity to cure the stated cause during the 60-day notice period, and (iii) after all of the preceding procedures have been satisfied or made available, delivery to Executive of a Notice of Termination from the Board of Directors of the Company finding that in the good faith opinion of such Board of Directors, Executive was guilty of the conduct or of the failure described in the second sentence of this subparagraph, specifying the particulars in detail, and that Executive has failed to cure the stated cause.

     (d) Termination by Executive. Executive may voluntarily terminate his employment at any time. Executive’s termination of employment shall be for “good reason” if he voluntarily terminates his employment:

     (i) upon the occurrence, without the Executive’s consent, of any of the following events:

     (A) a material diminution of Executive’s duties or authority, or the assignment to Executive of duties materially inconsistent with his position, in either case, with or without a change in Executive’s title;

     (B) the institution of a requirement that Executive report to any person other than the Chief Executive Officer or the Board of Directors;

     (C) a material diminution in Executive’s base salary or a material diminution in Executive’s benefits; or

     (D) a material change in the geographic location at which Executive must perform services pursuant to this Agreement;

     (ii) because of a failure by the Company to comply with any material provision of this Agreement which has not been cured within 30 days after written notice of such noncompliance has been given by the Executive to the Company; or

     (iii) because of any purported termination of the Executive’s employment by the Company which is not effected pursuant to a Notice of

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Termination satisfying the requirements of subparagraph 5(e) hereof (and for purposes of this Agreement no such purported termination shall be effective).

     Notwithstanding the foregoing, the Executive shall not be deemed to have terminated for good reason unless, within 45 days after the initial condition giving rise to good reason, the Executive provides the Company with written notice of such condition. The Company shall have 30 days following receipt of such notice to cure the condition. If the Company does not cure such condition within the 30 day period, then Executive’s Date of Termination shall be the first day after the 30 day cure period expires.

     (e) Notice of Termination. Any termination of Executive’s employment by the Company or by Executive (other than termination because of Executive’s death) shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision of this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

     (f) Date of Termination of Employment. “Date of Termination” shall mean (i) if Executive’s employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated for disability pursuant to subparagraph 5(b) above, 30 days after Notice of Termination is given (provided that Executive shall not have returned to the performance of his duties during such thirty-day period); (iii) if Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination which shall not be less than 30 days nor more than 60 days from the date Notice of Termination is given (except as provided in subparagraph 5(d)); provided that if within 30 days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

     6. Compensation Upon Termination of Employment.

     (a) All Terminations. Upon the termination of Executive’s employment with the Company for any reason, Executive shall be entitled to receive (i) his base salary through the Date of Termination, (ii) the balance of any earned but unpaid bonus, (iii) up to a maximum of 60 days of accrued but unused paid time off, (iv) all vested benefits under the Company’s benefit plans payable in accordance with the terms of such plans and (v) all benefit continuation and conversion rights as provided under the Company’s benefit plans. The foregoing are referred to collectively as the “Base Termination Benefit.”

     (b) Death or Disability. If Executive’s employment with the Company terminates as a result of his death or his disability, then Executive shall be entitled to

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receive (i) the Base Termination Benefit and (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, with such amounts paid no later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year, or (B) the end of the calendar year, of the Date of Termination.

     (c) Cause. If Executive’s employment is terminated by the Company for cause, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (d) Breach; Termination for Good Reason. If (A) the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c), or (B) Executive terminates his employment for good reason, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 200% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 24 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

     For purposes of compliance with Section 409A, the following provisions shall apply. Payments pursuant to clauses (ii) and (iii) shall be paid to Executive no later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year that includes the Date of Termination, or (B) the end of the calendar year that includes the Date of Termination. To the extent that any payment of medical benefits provided pursuant to clause (iv) does not qualify for exemption from Section 409A, such payment shall meet the requirements of Section 409A by satisfying the following conditions: (A) the amount of payment in any one taxable year may not affect the amount

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of payment in another taxable year; and (B) any such payment reimbursing Executive or his eligible dependents for an expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred. In addition, career transition assistance provided pursuant to clause (v) shall not be provided beyond December 31 of the second calendar year after the calendar year that includes the Date of Termination.

     (e) Voluntary Termination. If Executive voluntarily terminates his employment with the Company other than for good reason, then Executive shall be entitled to receive the Base Termination Benefit and the Company shall have no further obligations to Executive under this Agreement except as otherwise required by applicable law.

     (f) Termination Following a Change in Control. Notwithstanding subparagraphs 6(d) and 6(e), if (i) within the 12-month period following a change in control the Company terminates Executive’s employment other than pursuant to subparagraphs 5(b) or 5(c) or Executive terminates his employment for good reason or (ii) within the 30-day period following a change in control Executive voluntarily terminates his employment with the Company, then Executive shall be entitled to receive:

     (i) the Base Termination Benefit;

     (ii) a cash bonus equal to his target bonus payable with respect to the year in which the Date of Termination occurs, prorated based on the date on which the Date of Termination occurs;

     (iii) a lump sum cash payment equal to 300% of his annual base salary and target bonus payable with respect to the year in which the Date of Termination occurs;

     (iv) continuation for a period of 36 months after the Date of Termination of all medical and life insurance and other welfare benefits for Executive and his eligible dependents at active Executive contribution rates;

     (v) reasonable Company-paid executive level career transition assistance by a firm designated by Executive;

     (vi) immediate vesting of all unvested stock options, restricted stock grants, stock appreciation rights and other equity compensation awards; and

     (vii) the right to exercise all stock options, stock appreciation rights and other equity compensation awards for a period of 12 months following the Date of Termination.

     Payments and benefits provided pursuant to clauses (ii)-(v) shall be subject to the Section 409A rules set forth above in subparagraph 5(d).

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     For purposes of this Agreement, a “change in control” shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 1(a) of the Current Report on Form 8-K, as in effect as of the date of this Agreement, promulgated pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to the reporting requirements of the Exchange Act; provided that, without limitation, such a change in control shall be deemed to have occurred if

     (i) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Company’s assets;

     (ii) the stockholders of the Company approve any plan or proposal of liquidation or dissolution of the Company;

     (iii) there shall be consummated any consolidation or merger of the Company in which the Company is not the surviving or continuing corporation, or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have, directly or indirectly, at least an 80% ownership interest in the outstanding Common Stock of the surviving corporation immediately after the merger;

     (iv) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding voting securities ordinarily having the right to vote for the election of directors; provided that no change in control shall be deemed to occur as a result of any acquisition of voting securities directly from the Company (or as a result of the exercise, conversion or exchange of any securities acquired directly from the Company) if the transaction pursuant to which such voting securities or exercisable, convertible or exchangeable securities are issued is approved by vote of at least three-quarters of the directors comprising the Incumbent Board (as defined below); or

     (v) individuals who, as of the date of this Agreement, constitute the Board of Directors of the Company (the “Board” generally, and as of the date hereof, the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided that any individual becoming a director subsequent to the date of this Agreement whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board shall be, for purposes of this Agreement, considered as though such individual were a member of the Incumbent Board; provided further that, notwithstanding the foregoing, an individual whose initial assumption of office as a director is in connection with

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any actual or threatened “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated under the Exchange Act) by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) other than the Incumbent Board shall not be considered as a member of the Incumbent Board for purposes of this Agreement.

     (g) Obligations under Proprietary Information and Inventions Agreement. Executive understands and agrees that if he materially breaches any material provision of the Proprietary Information and Inventions Agreement, the Company shall cease to have any obligation to make any severance or other post-employment payments under this paragraph 6. Executive further understands and agrees that the severance and other post-employment payments to be made to Executive pursuant to this paragraph 6 may be applied by the Company to satisfy its payment obligations set forth in Section 5 of the Proprietary Information and Inventions Agreement for the period during which payments are being made to Executive in accordance with this paragraph 6.

     (h) Mitigation. Executive shall not be required to mitigate the amount of any payment provided for this paragraph 6 by seeking other employment or otherwise, nor shall the amount of any payments provided in this Agreement be reduced by any compensation earned by Executive as the result of his self-employment or his employment by another employer after his Date of Termination.

     (i) Exclusive Severance. The severance pay and benefits provided for in this paragraph 6 will be in lieu of any other severance or termination pay to which the Executive may be entitled under any Company severance or termination plan, program, practice or arrangement. The Executive’s entitlement to any other compensation or benefits will be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices as in effect from time to time.

     7. Excise Tax Payments.

     (a) Right to Receive Gross-Up Payment. In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to Executive or for Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, Executive’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to herein as the “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes and the Excise Tax, other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return, and including any Excise Tax imposed upon the Gross-Up Payment), Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

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     (b) Determination Relating to Gross-Up Payment. An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm of recognized national standing selected by the Company and reasonably acceptable to Executive (the “Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation, to the Company and Executive within five days of the Date of Termination, if applicable, or such other time as requested by the Company or by Executive (provided Executive reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by Executive with respect to a Payment or Payments, it shall furnish Executive with an opinion reasonably acceptable to Executive that no Excise Tax shall be imposed with respect to any such Payment or Payments. The Gross-Up Payment, if any, as determined pursuant to this subparagraph 7(b) shall be paid by the Company to Executive within five days after the receipt of the Determination. Within ten days after the delivery of the Determination to Executive, Executive shall have the right to dispute the Determination (the “Dispute”). The existence of the Dispute shall not in any way affect Executive’s right to receive the Gross-Up Payment in accordance with the Determination. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and Executive, subject to the application of the provisions of subparagraph 7(c).

     (c) Excess Payment and Underpayment. As a result of uncertainty in the application of Sections 280G and 4999 of the Code, it is possible that a Gross-Up Payment (or a portion thereof) shall be paid which should not be paid (an “Excess Payment”) or that a Gross-Up Payment (or a portion thereof) which should be paid shall not be paid (an “Underpayment”). An Underpayment shall be deemed to have occurred (i) upon notice (formal or informal) to Executive from any governmental taxing authority that Executive’s tax liability (whether in respect of Executive’s current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which the Company has failed to make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by reason of a determination by the Company (which shall include the position taken by the Company, together with its consolidated group, on its federal income tax return) or (iv) upon the resolution of the Dispute to Executive’s satisfaction. If an Underpayment occurs, Executive shall promptly notify the Company and the Company shall promptly, but in any event at least five days prior to the date on which the applicable government taxing authority has requested payment, pay to Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of Executive’s failure to file timely a tax return or pay taxes shown due on Executive’s return) imposed on the Underpayment. An Excess Payment shall deemed to have occurred upon a Final Determination (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or portion thereof) with respect to which Executive had previously received a Gross-Up Payment. A “Final Determination” shall be deemed to have occurred when Executive has received from the applicable government taxing authority a refund of taxes or other reduction in Executive’s tax liability by reason of the Excise Payment and upon either (i) the date a determination is made by, or an agreement is entered into with, the

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applicable governmental taxing authority which finally and conclusively binds Executive and such taxing authority, or in the event that a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (ii) the statute of limitations with respect to Executive’s applicable tax return has expired. If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by the Company to Executive and Executive shall pay to the Company on demand (but not less than 10 days after the determination of such Excess Payment and written notice has been delivered to Executive) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to Executive until the date of repayment to the Company.

     (d) Payment in Compliance with Section 409A. Notwithstanding the foregoing, if Executive is a “specified employee” (within the meaning of Code Section 409A) as of the Date of Termination, the Company shall pay any Gross-Up Payment due as a result of an Excise Tax or Underpayment no earlier than the first day following the six-month anniversary of the Date of Termination and no later than December 31 of the calendar year following the calendar year in which Executive pays such Excise Tax.

     (e) Payment of Excise Tax Withholding. Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the Determination, an Excise Tax is imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

     8. Successors; Binding Agreement.

     (a) Successors to the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to terminate his employment with the Company for good reason. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which executes and delivers the agreement provided for in this paragraph 8 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

     (b) Assignment. Executive’s rights and interests under this Agreement may not be assigned, pledged or encumbered by him without the Company’s written consent. This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators,

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successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder if he had continued to live all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s surviving spouse or, if there is no surviving spouse, to his estate.

     9. Proprietary Information. Executive and the Company have entered into the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect.

     10. Payment of Costs and Indemnification.

     (a) Payment of Costs. In the event that a dispute arises regarding termination of Executive’s employment or the interpretation or enforcement of this Agreement, the Company shall promptly pay, or reimburse to Executive, as and when incurred, all reasonable fees and expenses (including reasonable legal fees and expenses, court costs, costs of investigation and similar expenses) incurred by Executive in contesting or disputing any such termination, in seeking to obtain or enforce any right or benefit provided for in this Agreement, or in otherwise pursuing his claim; provided, however, that the Company shall be entitled to recover from Executive the amount of any such fees and expenses paid by the Company if the Company obtains a final judgment in its favor on the merits of such dispute from a court of competent jurisdiction from which no appeal may be taken, whether because the time to do so has expired or otherwise. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) Indemnification. The Company shall indemnify and hold Executive harmless to he maximum extent permitted by law against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, incurred by Executive in connection with the defense of, or as a result of, any action or proceeding (or any appeal from any action or proceeding) in which Executive is made or is threatened to be made a party by reason of the fact that Executive is or was an Executive, officer, or director of the Company or any of its subsidiaries, regardless of whether such action or proceeding is one brought by or in the right of the Company to procure a judgment in its favor. The undertaking of subparagraph (a) above is independent of, and shall not be limited or prejudiced by, the undertakings of this subparagraph (b). The indemnification provided in this Agreement is in addition to, and not in derogation of, any rights to indemnification or advancement of expenses to which Executive may otherwise be entitled under the Certificate of Incorporation or Bylaws of the Company, any indemnification contract or agreement, any policy of insurance or otherwise.

     (c) Warranty. The Company hereby represents and warrants that the undertakings of payment and indemnification set out in (a) and (b) above are not in conflict with the Certificate of Incorporation or Bylaws of the Company or with any validly existing agreement or other proper corporate action of the Company.

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     11. General Provisions.

     (a) Fees and Expenses. The Company shall pay as they become due all legal fees and related expenses (including the costs of experts) incurred by Executive as a result of (i) Executive’s termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment) and (ii) Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including any such fees and expenses incurred in connection with any Dispute or Gross-Up Payment, whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which Executive is or may be entitled to receive benefits. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     (b) No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any right of set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

     (c) Effect of Headings. The headings of all of the paragraphs and subparagraphs of this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

     (d) Modification, Amendment, Waiver. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless approved in writing by both parties. The failure at any time to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of either party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

     (e) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidly, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

     (f) No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any person.

     (g) Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois.

     (h) Arbitration. All disputes arising out of or in connection with this Agreement shall be referred to and finally resolved by binding arbitration under American Arbitration Association’s National Rules for Resolution of Employment

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Disputes, which arbitration rules are incorporated herein by reference. The tribunal shall consist of a sole arbitrator. The place of arbitration shall be Chicago, Illinois. Process in any such arbitration proceeding may be served on any party anywhere in the world by notice given to the party in accordance with paragraph 11(i).

     (i) Notices. Any notice to be served under this Agreement shall be in writing and shall be mailed by registered mail, return receipt requested, addressed:

     If to the Company, to:

Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422
Attention: Board of Directors

     If to Executive, to:

c/o Northfield Laboratories Inc.
1560 Sherman Avenue
Evanston, Illinois 60201-4422

     or to such other place as either party may specify in writing, delivered in accordance with the provisions of this subparagraph.

     (j) Survival. The rights and obligations of the parties shall survive the term of Executive’s employment to the extent that any performance is required under this Agreement after the expiration or termination of such term.

     (k) Entire Agreement. This Agreement, together with the Proprietary Information and Inventions Agreement described in paragraph 9 above, constitutes the entire agreement of the parties with respect to the subject matter thereof, and supersedes all previous agreements between the parties relating to the same subject matter (but excluding the Proprietary Information and Inventions Agreement, which agreement shall remain in full force and effect).

     (l) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same document.

     (m) Compliance with Section 409A. It is the intention of the Company and Executive that the provisions of this Agreement comply with Section 409A and all provisions of this Agreement will be construed and interpreted in a manner consistent with Section 409A. Any mention of “termination” of Executive’s employment contained herein refers to a separation from service as determined pursuant to Treasury Regulation Section 1.409A-1(h).

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* * * * *

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

EXECUTIVE	NORTHFIELD LABORATORIES INC.
/s/ Robert L. McGinnis	By:	/s/ David A. Savner
Robert L. McGinnis	Its:	Director and Compensation Committee Chairman

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EX-10.4

Exhibit 10.4

SEVERANCE PROTECTION AGREEMENT

     SEVERANCE PROTECTION AGREEMENT dated February 25, 2008 by and between Northfield Laboratories Inc., a Delaware corporation (the “Company”), and                                         (the “Executive”), and is amended and restated solely to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”) effective as of this 25th day of February, 2008.

     The Board of Directors of the Company (the “Board”) recognizes that the possibility of a Change in Control (as hereinafter defined) of the Company exists and that the threat or occurrence of a Change in Control may result in the distraction of its key management personnel because of the uncertainties inherent in such a situation.

     The Board has determined that it is essential and in the best interests of the Company and its stockholders to retain the services of the Executive in the event of the threat or occurrence of a Change in Control and to ensure the Executive’s continued dedication and efforts in such event without undue concern for the Executive’s personal financial and employment security.

     In order to induce the Executive to remain in the employ of the Company, particularly in the event of the threat or occurrence of a Change in Control, the Company desires to enter into this Agreement to provide the Executive with certain benefits in the event the Executive’s employment is terminated as a result of, or in connection with, a Change in Control.

     NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows:

     Section 1. Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

     “Board” means the Board of Directors of the Company.

     “Cause” for the termination of the Executive’s employment with the Company will be deemed to exist if the Executive is convicted of any felony or the Executive fails to comply in all material respects with any material term of the Proprietary Information and Inventions Agreement dated as of December 5, 2005 between the Company and the Executive, which conduct or failure is materially injurious to the Company, monetarily or otherwise.

     “Change in Control” means a change in control of the Company of a nature that would be required to be reported in response to Item 1(a) of the Current Report on Form 8- K, as in effect as of the original date of this Agreement, promulgated pursuant to Section 13 or 15(d) of the Securities Exchange Act, whether or not the Company is then subject to the reporting requirements of the Securities Exchange Act; provided that, without limitation, such a change in control will be deemed to have occurred if:

     (a) there is consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Company’s assets;

     (b) the stockholders of the Company approve any plan or proposal of liquidation or dissolution of the Company;

     (c) there is consummated any consolidation or merger of the Company in which the Company is not the surviving or continuing corporation, or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have, directly or indirectly, at least an 80% ownership interest in the outstanding Common Stock of the surviving corporation immediately after the merger;

     (d) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding voting securities ordinarily having the right to vote for the election of directors; provided that no change in control will be deemed to occur as a result of any acquisition of voting securities directly from the Company (or as a result of the exercise, conversion or exchange of any securities acquired directly from the Company) if the transaction pursuant to which such voting securities or exercisable, convertible or exchangeable securities are issued is approved by vote of at least three-quarters of the directors comprising the Incumbent Board (as defined below); or

     (e) individuals who, as of the original date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided that any individual becoming a director subsequent to the original date of this Agreement whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board will be, for purposes of this Agreement, considered as though such individual were a member of the Incumbent Board; provided further that, notwithstanding the foregoing, an individual whose initial assumption of office as a director is in connection with any actual or threatened “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated under the Securities Exchange Act) by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act) other than the Incumbent Board will not be considered as a member of the Incumbent Board for purposes of this Agreement.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company” means Northfield Laboratories Inc., a Delaware corporation, and includes its Successors.

     “Continuation Period” has the meaning set forth in Section 3.1(b)(iii).

     “Disability” means the Executive’s incapacity due to physical or mental illness or accident such that the Executive is absent from his duties for the Company on a full-time basis for the entire period of six consecutive months or for 270 days in any 365-day period.

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     “Good Reason” for the Executive’s termination of employment with the Company will be deemed to exist if, within 24 months after the occurrence of a Change in Control one of the following events occurs without the Executive’s consent and the event is not cured by the Company subject to the rules below:

     (a) the Executive is reassigned to a position of lesser rank or status whereby the Executive’s duties or authorities are materially inconsistent with his position immediately before the reassignment;

     (b) there is a material change in the geographic location at which the Executive must perform services; or

     (c) the Executive’s annual base salary is materially reduced.

     The Executive shall not be deemed to have terminated for Good Reason unless (i) within 45 days of the initial condition giving rise to Good Reason, the Executive provides the Company with written notice of such condition, (ii) the Company does not cure the condition within 30 days following receipt of such notice to cure the condition, and (iii) such 30 day cure period expires within 24 months after the Change in Control. If the Company does not cure such condition within the 30 day period, then the Executive’s Termination Date shall be the first day after the 30 day cure period expires.

     “Notice of Termination” means a written notice from the Company of the termination of the Executive’s employment which indicates the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

     “Person” has the meaning as used in Section 13(d) or 14(d) of the Securities Exchange Act and will include any “group” as such term is used in such sections.

     “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Successor” means a corporation or other entity acquiring all or substantially all the assets and business of the Company, whether by operation of law, by assignment or otherwise.

     “Termination Date” means (a) in the case of the Executive’s death, the Executive’s date of death, (b) in the case of the termination of the Executive’s employment with the Company by the Executive for Good Reason, the first day after the Company’s 30 day cure period expires (referenced above under “Good Reason”), and (c) in all other cases, the date specified in the Notice of Termination; provided that if the Executive’s employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination will be at least 30 days after the date the Notice of Termination is given to the Executive.

     Section 2. Term of Agreement. This Agreement will commence as of October 4, 2002 and will continue in effect until September 30, 2004; provided that commencing on September 30, 2004 and on each September 30 thereafter, the term of this Agreement will automatically be extended for one year unless either the Company or the Executive gives written

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notice to the other at least 90 days prior to such date that the term of this Agreement will not be so extended. Notwithstanding any such notice by the Company, the term of this Agreement will in any case not expire prior to the expiration of 24 months after the occurrence of a Change in Control.

     Section 3. Termination of Employment.

     3.1 If, during the term of this Agreement, the Executive’s employment with the Company is terminated within 24 months following a Change in Control, the Executive will be entitled to the following compensation and benefits:

     (a) If the Executive’s employment with the Company is terminated (i) by the Company for Cause or Disability, (ii) by reason of the Executive’s death or (iii) by the Executive other than for Good Reason, the Company will pay to the Executive all compensation, including all accrued vacation pay, earned by the Executive through and including the Termination Date;

     (b) If the Executive’s employment with the Company is terminated for any reason other than as specified in Section 3.1(a), the Executive will be entitled to the following:

     (i) the Company will pay the Executive all compensation, including all accrued vacation pay, earned by the Executive through and including the Termination Date;

     (ii) the Company will pay the Executive as severance pay, and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment an amount in cash equal to one time the average of the Executive’s annual base salary for the Company’s two most recently completed fiscal years preceding the Termination Date;

     (iii) for a period of 12 months (the “Continuation Period”), the Company will at its expense continue on behalf of the Executive and the Executive’s dependents and beneficiaries the medical, dental and hospitalization benefits provided (A) to the Executive at any time during the 180-day period prior to the Change in Control or at any time thereafter or (B) to other similarly situated executives who continue in the employ of the Company during the Continuation Period. The coverage and benefits (including deductibles and costs) provided in this Section 3.1(b)(iii) during the Continuation Period will be no less favorable to the Executive and the Executive’s dependents and beneficiaries than the most favorable of such coverages and benefits during any of the periods referred to in clauses (A) and (B) above. The Company’s obligation hereunder with respect to the foregoing benefits will be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer’s benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive hereunder as long as the coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and

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benefits required to be provided hereunder. This Section 3.1(b) will not be interpreted so as to limit any benefits to which the Executive or the Executive’s dependents or beneficiaries may be entitled under any of the Company’s medical, dental and hospitalization plans, programs or practices following the Executive’s termination of employment; and

     (iv) all stock options issued by the Company to the Executive will become fully vested and the Executive will be permitted to exercise such stock options at any time during the remaining exercise period applicable to such stock options (without giving effect to any requirement that such stock options be exercised within a specified period following the termination of the Executive’s employment with the Company).

     (c) The amount provided for in Section 3.1(a) will be paid in a single lump sum cash payment within fourteen days after the Termination Date. The amount provided for in Section 3.1(b)(i) may be paid within fourteen days after the Termination Date or, if the Company determines, with the amount provided for in Section 3.1(b)(ii), which will be paid in a single lump sum cash payment by the Company within fourteen days after the Executive executes and does not revoke a general release, in the form provided by the Company, of all claims relating to the Executive’s employment with the Company and the termination of such employment. The release shall be furnished to the Executive on or as soon as practical following the Termination Date, but in no event later than the latest date that will insure that any revocation period provided for in the release will expire no later than fourteen days before the applicable short-term deferral deadline provided in Section 15. If the Executive fails to execute the release within a reasonable period of time (21 days, at a minimum, for an individual termination) or revokes the signed release, the Company’s obligations under Sections 3.1(b)(ii)-(iv) shall terminate and no severance benefits shall be payable. In no event shall failure to execute a release or revocation of such release impact the amount payable under Section 3.1(b)(i).

     (d) The Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, and no such payment will be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as specifically provided in Section 3.1(b)(iii).

     3.2 Notwithstanding anything contained in this Agreement to the contrary, if the Executive’s employment with the Company is terminated prior to a Change in Control and the Executive reasonably demonstrates that such termination (a) was at the request of a Person who has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who subsequently effects a Change in Control or (b) otherwise occurred in connection with, or in anticipation of, a Change in Control which subsequently occurs, then for all purposes of this Agreement, the date of such Change in Control with respect to the Executive will mean the date immediately prior to the date of such termination of the Executive’s employment.

     3.3 The severance pay and benefits provided for in this Section 3 will be in lieu of any other severance or termination pay to which the Executive may be entitled under any

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Company severance or termination plan, program, practice or arrangement. The Executive’s entitlement to any other compensation or benefits will be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices as in effect from time to time.

     Section 4. Notice of Termination. Following a Change in Control, any purported termination of the Executive’s employment by the Company will be communicated by a Notice of Termination to the Executive. For purposes of this Agreement, no such purported termination will be effective without such Notice of Termination.

     Section 5. Successors; Binding Agreement. This Agreement will be binding upon and will inure to the benefit of the Company and its Successors, and the Company will require any Successors to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. Neither this Agreement nor any right or interest hereunder will be assignable or transferable by the Executive or by the Executive’s beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement will inure to the benefit of and be enforceable by the Executive’s legal representatives.

     Section 6. Fees and Expenses. The Company will pay as they become due all legal fees and related expenses (including the costs of experts) incurred by the Executive as a result of the Executive seeking to obtain or enforce any right or benefit provided by this Agreement or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits. In no event shall payment of such expenses be made later than December 31 of the calendar year following the calendar year in which the expense was incurred.

     Section 7. Notices. All notices, demands and other communications provided for in the Agreement, including the Notice of Termination, will be in writing and will be deemed to have been duly given when delivered personally to the recipient or when sent to the recipient by telecopy (receipt confirmed), one business day after the date when sent to the recipient by reputable express courier service (charges prepaid) or three business days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the Company and the Executive at the addresses indicated below:

If to the Company:	Northfield Laboratories Inc. 1560 Sherman Avenue Suite 1000 Evanston, Illinois 60201-4800 Attention: Corporate Secretary
If to the Executive:

or to such other address or to the attention of such other party as the recipient party has specified by prior written notice to the sending party.

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     Section 8. Nonexclusivity of Rights. Nothing in this Agreement will prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) for which the Executive may qualify, nor will anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company will be payable in accordance with such plan or program, except as specifically modified by this Agreement.

     Section 9. No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder will not be affected by any circumstances, including any right of set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others.

     Section 10. No Change in Employment Relationship. This Agreement and the rights granted to the Executive hereunder are not intended to (a) provide Executive with any severance or other rights prior to the occurrence of a Change in Control or (b) provide the Executive with any right of continuing employment with the Company or otherwise modify the “at will” employment relationship between the Company and the Executive.

     Section 11. Modification and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     Section 12. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.

     Section 13. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

     Section 14. Governing Law. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Illinois without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement will be brought and maintained in a court of competent jurisdiction in Cook County in the State of Illinois.

     Section 15. Compliance with Section 409A. It is the intention of the Company and Executive that the provisions of this Agreement comply with Section 409A and all provisions of this Agreement will be construed and interpreted in a manner consistent with Section 409A. Any

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mention of “termination” of Executive’s employment contained herein refers to a separation from service as determined pursuant to Treasury Regulation Section 1.409A-1(h). Further, any payments (other than those under Section 6) required hereunder shall in no event be paid later than the 15th day of the third month following the later of (A) the end of the Company’s fiscal year in which the Termination Date occurs, or (B) the end of the calendar year in which the Termination Date occurs.

*****

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

NORTHFIELD LABORATORIES INC.

By

Its

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EX-10.5

Exhibit 10.5

February 25, 2008

     Re: Agreement to Continue Employment.

Dear:

     We appreciate your hard work and dedication as an employee of Northfield Laboratories Inc. In view of your significant contributions, this letter will confirm the terms of your continued employment with Northfield through December 31, 2008.

     Northfield agrees to continue your employment in your present position through December 31, 2008. During this period, your current salary will not be reduced and the employee benefits you currently receive will not be materially changed without your consent. If you receive a promotion or salary increase, your new position and salary will remain in effect for the remainder of this period.

     If Northfield terminates your employment prior to December 31, 2008, you will be entitled to receive a lump sum payment of your accrued, but unused paid time off plus an amount equal to 12 months of your base salary (as in effect at the time of your termination). These payments will be paid within 14 days after actual termination, subject to any requirement to sign a written release of claims. If you are entitled to and elect to continue your medical benefits under COBRA, you will pay for that coverage at active employee rates for the first 12 months of your COBRA coverage or if earlier, until the end of your coverage. If your COBRA coverage extends for more than 12 months, you will pay the full COBRA rate for the remainder of your COBRA period. The severance pay and benefits provided for in this Agreement will be in lieu of any other severance or termination pay to which the Executive may be entitled under any Company severance or termination plan, program, practice or arrangement.

     Northfield will not be obligated to make a lump sum payment or to continue your salary or benefits if you voluntarily terminate your employment or if your employment is terminated as a result of Northfield’s determination, in its exclusive discretion, that you have failed to perform your responsibilities as a Northfield employee, including any failure to comply with your Proprietary Information and Inventions Agreement or with Northfield’s employment policies and code of business conduct and ethics.

     Northfield may require you to sign a written release of claims as a condition to providing you with payments or benefits after the date of the termination of your employment. All payments will be subject to tax withholding to the extent required by law. If you are required to sign a written release as a condition to payments or benefits, then payment will not be made until after you sign and return the release, and any required period to revoke a written release has expired.

     This letter agreement will terminate on December 31, 2008. Your Proprietary Information and Inventions Agreement will remain in force at all times. Unless we agree otherwise in writing, after that date your employment with Northfield will be on an at will basis in accordance with applicable law.

     If you agree to accept this proposal, please sign, date and return this document to my attention by not later than March 3, 2008.

     Thank you again for your continued efforts on behalf of Northfield.

Steven A. Gould, M.D.

I have read and understand this letter

and agree with its terms:

Signature:

Date:

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