Exhibit 10.2
AMENDED EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is effective as of November 26,
2001(the "Effective Date"), by and between Keryx (Israel) Ltd., an Israeli
company with it principal place of business at 0 Xxxxxx Xxxxxx, Xxxxxxxxx (the
"Company") and Xxxxxx Xxxxxx, I.D. No. 069455137, of 11 Xxxxxx Xxxxx Street,
Jerusalem (the "Employee").
Whereas the Company desires to continue to employ the Employee in the position
of Executive Chairman (the "Position");
Whereas the Employee desires have his employment continued by the Company and
fulfill the responsibilities of the Position; and
Whereas the parties desire to set forth the conditions of employment pursuant to
which the Employee will be continued to be employed by the Company;
It is hereby agreed by and between the parties as follows:
1. Preamble
The preamble to this Agreement and any attachments thereto are an integral part
of this Agreement.
2. Job Description
The Employee shall serve as the Executive Chairman of the Company and shall be
responsible, with the Chief Executive Officer and President of the Company, for
the formulation of the research and development and scientific activities of the
Company and its overall corporate strategy. He shall report directly to the
Board of Directors of the Company's parent corporation. The description of
responsibilities set forth herein shall serve as a general statement of the
duties, responsibilities and authority of the Employee. Additional duties,
responsibilities and authority may be assigned to the Employee by the Board of
Directors of the Company's parent corporation from time to time in its
reasonable discretion.
3. Working Hours
The Employee shall be employed by the Company on a full-time basis, namely for
not less than forty-four (44) hours per week (inclusive of meal time). The
Employee agrees that his position is considered to be a management position as
defined in the Hours of Work and Rest Law - 1951, which requires a special
measure of personal trust. Accordingly, the provisions of the Hours of Work and
Rest Law - 1951 shall not apply and the Employee shall not be entitled to
receive any additional payment for his work other than those that are set forth
in this Agreement.
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4.Term of Agreement
Unless terminated earlier as hereinafter provided, this Agreement shall take
effect from the Effective Date and shall remain in effect indefinitely.
5. Annual Salary
5.1. The Employee's annual salary shall be as follows:
5.1.1. The Employee shall receive an annual gross salary of two hundred
and fifty thousand dollars ($250,000), payable in New Israeli Shekels according
the representative rate of exchange in effect each month at the time Company
salaries are calculated (the "Global Salary"). The Employee's salary shall be
paid in twelve equal installments, monthly in arrears. Notwithstanding the
foregoing, the Employee's Global Salary shall not fall below the global salary
paid by the Company to its Chief Executive Officer. Furthermore, at the end of
each year, the Employee's entire compensation package shall be reviewed by the
Board of Directors and the Board of Directors shall ensure that the Employee's
compensation package is structured so that he will be the most highly
compensated employee in the Company.
5.1.2. The linkage of the Global Salary to the United States dollar is in
lieu of any generally-applicable increases, whether the statutory cost of living
increase ("Tosefet Yoker") or any other industry-wide increase applicable as the
result of collective bargaining agreements or other order of the Ministry of
Labor and Welfare (such as Tzavei Harhava). By signing this Agreement and
accepting employment pursuant to its terms, the Employee represents that s/he
will not claim any such increase.
5.1.3 The Employee shall not be entitled to receive from the Company any
salary or payment of any kind other than the Global Salary and other payments
specifically set forth in this Agreement or properly authorized by the Board of
Directors and, should the Employee be a director of the Company at the time such
other payments not specifically included in this Agreement are made, also by the
shareholders of the Company.
5.1.4. Notwithstanding the foregoing, the Employee's Global Salary shall
be increased annually by an amount to be determined by the Board of Directors,
but in no event shall such increase be less than the increase in the Israeli
Cost of Living Index for the year each anniversary date.
5.2. Other Terms of Employment
5.2.1. Bonuses: The Employee shall be eligible to receive one or more
bonuses during any calendar year in the discretion of the Board of Directors.
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5.2.2. Expenses: The Employee shall be entitled, in accordance with the
Company's standard policy in effect from time to time, to be reimbursed for
expenses (Hotza'ot Eshel) incurred in Israel and abroad in connection with
Company business against receipt by the Company of appropriate vouchers,
receipts or other proof of the Employee's expenditures.
5.2.3. Continuing Education Fund: The Employee shall be entitled to
participate in the Company's continuing education fund (Keren Hishtalmut). The
Company shall contribute an amount equal to five percent (5%) of the Employee's
Global Salary and shall deduct two and a half percent (2.5%) of the Employee's
Global Salary and transfer it as the Employee's contribution. The Employee
consents to the deduction of this amount as his contribution to the continuing
education fund. These contributions will be calculated up to the permissible
tax-exempt salary ceiling according to the income tax regulations in effect from
time to time. If the amount of the Company's contribution is greater than
permitted by those regulations, the Employee shall not have the right to receive
the excess amount.
5.2.4. Medical License Expense: The Company shall reimburse the Employee
for expenses incurred by him in connection with the maintenance of his medical
license in the United States, including, but not limited to, the costs of any
continuing medical education ("CME") required as a condition of such license.
5.2.5. Automobile Maintenance: The Employee shall be entitled to receive
reimbursement on a before-tax basis for the upkeep and maintenance entailed in
the use of his personal automobile of $12,000 per year.
5.2.6. Telephone: The Company shall pay or reimburse the Employee for the
costs of a cellular telephone, a car phone and a telephone line installed at his
home and for the telephone charges billed thereto during the term of his
employment after deducting the cost of the Employee's itemized personal calls.
The Company shall reimburse the Employee for the itemized costs of telephone
calls made for the Company's business purposes billed to any of Employee's
personal telephones. If the Employee incurs any income tax liability under
Israeli law for such payment or reimbursement, the Company will also pay the
Employee an amount equal to such tax liability (including any tax incurred
because of the payment described in this sentence.)
5.2.7. Reserve Duty: The Employee shall be entitled to receive his full
Global Salary and other payments while performing reserve duty, provided that
any amount received by the Employee from the I.D.F. or any other source
(excluding Damei Calcala) is transferred to the Company or, in the alternative,
an amount equal to that received from the I.D.F. or any other source is deducted
from the Global Salary payable to the Employee.
5.2.8. Annual Leave and Recreation Pay (Damei Havra'a): The Employee shall
be entitled to thirty (30) working days of paid annual leave each year. It is
the intention of the Company that the Employee utilize at least ten (10) working
days of paid annual
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leave each year. To the extent that such ten (10) working days of paid annual
leave are not utilized by the Employee, they shall be forfeited at the end of
each calendar year. In addition, the Employee shall not be allowed to accrue
more than thirty (30) working days of annual leave except in unusual
circumstances and with the permission of the Board of Directors of the Company.
Subject to the requirement that at least ten (10) working days of paid annual
leave be utilized by the Employee in each calendar year or be forfeited, should
the Employee's annual leave balance exceed thirty (30) working days at the end
of any calendar year, the excess number of days shall be paid out in accordance
with the provisions of the Annual Leave Law - 1951. The Company shall also pay
the Employee for five (5) days of recreation (damei havra'a) each year in
accordance with the law and the normal practice of the Company in effect from
time to time.
5.2.9. Sickness and Disability Insurance: The Employee shall be entitled
to the number of days for sick leave permitted by law. Compensation for sick
days utilized shall be paid according to his Global Salary only upon the
presentation of medical documentation as required by the Company. The Employee
shall be covered by disability insurance that provides monthly compensation. The
cost of such insurance shall be borne by the Company. Notwithstanding the
foregoing, the Employee shall not be entitled to receive compensation for sick
leave if such compensation is covered by the Employee's disability insurance
referred to above. However, should the amounts received by the Employee pursuant
to such disability insurance be less than the amount that is properly payable as
compensation for the Employee's available sick leave, according to the Global
Salary, the Company shall pay the difference. It is understood and agreed that
unused sick leave cannot be redeemed by the Employee. For the avoidance of
doubt, it is understood and agreed that the payments made by the Company in
consideration of sick leave covers all obligations of the Company pursuant to
the Sick Leave Law - 1976.
5.2.10. MBA: The Employee shall be entitled to participate in an Executive
MBA program during his employment with the Company, provided that such program
does not require him to be absent from his duties more than one (1) day a week
during the program. All expenses of the program, including tuition, shall be
borne by the Company. Should the Employee's employment with the Company be
terminated during the program, whether by him or the Company, for any reason,
the Company shall be entitled to retrieve, in accordance with paragraph 8.4,
below, any amounts it had paid for the program until the date of the termination
and, thereafter, it shall have no further obligation to fund the Employee's
participation in such program. If during a two year period from the completion
of the program, the Employee's employment with the Company is terminated by him
or by the Company, for any reason, the Employee shall pay the Company shall be
entitled to retrieve, in accordance with paragraph 8.4, below, the pro rata
share of any amounts it had paid for the program based on such two year period.
5.3. Pension Benefits and Severance Payments
5.3.1. The Company will pay into a Provident Fund (Kupat Gemel) (in the
meaning of paragraph 47 of the Income Tax Ordinance) in the form of Manager's
Insurance or
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another form according to the Employee's choice and the Company's agreement, an
amount equal to thirteen and one third percent (13 1/3 %) from the monthly
Global Salary paid to the Employee, and the Employee will pay, on his own
account, an amount equal to five percent (5%) from that Global Salary. The
Employee agrees that the Company shall be entitled to deduct the Employee's
contribution (5%) from the Global Salary. For the avoidance of doubt, it is
clarified that under no circumstance shall the Company's contribution exceed
thirteen and one third percent (13 1/3%) of the Global Salary in any one month.
5.3.2. Five percent (5%) of the thirteen and one third percent (13 1/3%)
that the Company contributes as set forth above and the five percent (5%) the
Employee contributes, together with linkage and interest on the contributions,
will be treated as pension benefits for the Employee or his survivors. The
remaining eight and one third percent (8 1/3 %) of the Company's contribution,
together with linkage and interest on that portion, will be utilized to pay
severance benefits to the Employee or his descendants in the event of the
termination of his employment with the Company, except in those circumstances
discussed below.
5.3.3. In the event that the Employee chooses Manager's Insurance, the
policy shall belong to the Company as long as it employs the Employee and it
makes the required payments on the policy. The payments made into the Kupat
Gemel pursuant to paragraph 5.3.1, above, shall fulfill the Company's obligation
for severance payment pursuant to the Severance Compensation Law - 1963. Upon
the termination of the Employee's employment, for whatever reason, and upon his
final departure from the Company, the Employee or his successors shall be
entitled to receive the ownership of all rights which have accrued on his behalf
in the Kupat Gemel or the ownership of the Manager's Insurance policy, as
appropriate and subject to the provisions of section 6, below.
5.3.4. In the event that there is a difference in the Employee's favor
between the amount to which he is entitled to receive pursuant to the Severance
Compensation Law - 1963 and the severance payment amount (including linkage and
interest) that is in the Kupat Gemel or Manager's Insurance policy, the Company
shall pay that difference. The Company shall be obligated to pay such difference
whether the termination of the Employee's employment is at the Employee's
initiative or the Company's, except in the case of termination pursuant to
paragraphs 6.4 and 6.5, below. For the avoidance of doubt, it is understood that
in the event that the severance payment amount (including linkage and interest)
that is in the Employee's Kupat Gemel or Manager's Insurance policy exceeds the
amount to which he is entitled to receive as severance compensation pursuant to
the Severance Compensation Law - 1963, the difference shall not be transferred
to the Employee, including to his pension account, but shall be the property of
the Company.
6. Termination of Employment
6.1. Either party may terminate the Employee's employment with the Company
without cause at any time upon three (3) month's notice. The Company shall have
the
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right, in its sole discretion, to require the Employee to continue working for
the Company during the notice period.
6.2. The Employee's employment shall be terminated by his death or
disability. (For purposes of this section, "disability" shall be deemed to have
occurred if the Employee is unable, due to any physical or mental disease or
condition, to perform his normal duties of employment for 120 consecutive days
or 180 days in any twelve-month period.) Should the Employee's employment be
terminated as a result of his death, the benefits granted in paragraph 6.3,
below, shall be granted instead to his lawful heir or heirs.
6.3. In the event the Employee's employment is terminated (a) by the Company
without cause, or because of his death or disability, or (b) by the Employee for
"just cause", he shall be entitled to continue to receive his annual salary for
twelve (12) months following his last day of actual employment by the Company.
Such amount shall be in addition to any salary he is entitled to receive during
or in consideration for the notice period set forth in paragraph 6.1, above, and
any severance payment he is entitled to receive according the provisions of the
Severance Compensation Law - 1963. In addition, the Company, in conjunction with
the Board of Directors of the Company's parent corporation, shall take the
necessary steps so that (a) any outstanding, but unvested, options granted to
the Employee shall vest upon the effective date of his termination; and (b) the
period during which the Employee shall be permitted to exercise such options
shall be extended to two (2) years from the effective date of his termination as
defined in the Share Option Plan governing the options in question.
6.4. Notwithstanding the foregoing, the Company may terminate the Employee
immediately and without prior notice in the following circumstances: (a) a
material breach of the Employee's obligations pursuant to paragraphs 8.8, 8.9
and 8.10 (confidentiality and non-competition); (b) a material breach by the
Employee of any other provision of this Agreement, which is not cured by the
Employee within fifteen (15) days after receiving notice thereof from the
Company containing a description of the breach or breaches alleged to have
occurred; (c) the habitual neglect or gross failure by the Employee to
adequately perform the duties of his position; (d) any criminal action connected
to his employment with the Company or his place of employment; or (e) the
Employee's refusal to comply with or his violation of lawful instructions of the
Board of Directors of the Company's parent corporation.
6.5. In the event that the Employee's employment has been terminated in
accordance with paragraph 6.3, above, the Employee shall not be entitled to
receive any of the severance payments set forth in paragraphs 5.3.4 and 6.3,
above but shall be entitled to receive any salary or bonus accrued to the date
of termination.
7. Taxes and Other Payments
7.1. Unless otherwise specifically provided for in this Agreement, the
Company shall not be liable for the payment of taxes or other payments for which
the Employee is responsible as result of this Agreement or any other legal
provision, and the Employee shall be personally liable for such taxes and other
payments.
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7.2. The Employee hereby agrees that the Company shall deduct from his
Global Salary the Employee's national insurance fees, income tax and other
amounts required by law or the terms of this Agreement. The Company shall
provide the Employee with documentation of such deductions.
8. The Obligations of the Employee
8.1. The Employee agrees to devote his entire business time, energy,
abilities and experience to the performance of his duties, effectively and in
good faith.
8.2. During the period of his employment, the Employee shall not be
employed, whether or not during regular business hours, for pay by any other
party other than the Company. The Employee must receive the prior written
consent of the Company before assuming an unpaid position outside the Company.
Notwithstanding the foregoing, the Employee may, with the written permission of
the the Board of Directors of the Company's parent corporation, become a member
of the board of directors of another company and may accept any compensation in
connection with such position.
8.3. The Employee agrees to immediately inform the Company of any Company
issue or transaction in which the Employee has a direct or indirect personal
interest and/or where such issue or transaction could cause a conflict of
interest for the Employee in the fulfillment of his responsibilities as an
employee of the Company.
8.4. The Employee hereby gives irrevocable instructions and permission to
the Company to deduct from any amounts owed to the Employee by the Company,
including amounts payable as severance compensation, (a) any debt he has or will
have to the Company; and/or (b) any amount that was wrongfully or mistakenly
paid to him by the Company. Any such amounts to be deducted shall be calculated
in real terms as of the date of the deduction, including linkage to cost of
living index.
8.5. The Company may at its discretion and at any time apply for and procure
as owner and for its own benefit and at its own expense, insurance on the life
of the Employee ("Key Man Life Insurance") in such amounts and in such form or
forms as the Company may choose. The Employee shall cooperate with the Company
in procuring such insurance and shall, at the Company's request, submit to such
medical examinations, supply such information and execute such documents as may
be required by the insurance company or companies to whom the Company has
applied for such insurance. Neither the Employee nor any of his dependents shall
have any interest whatsoever in any such policy or policies or in the proceeds
thereof.
8.6. The Employee declares that the terms and conditions of his employment
are personal and confidential and will not be disclosed by him.
8.7. The Employee declares that he is free to enter into this Agreement and
that he has no obligations of any kind to any third party that would impair this
Agreement, either
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as an employee or an independent contractor. The Employee further declares that
as long as he remains an employee of the Company, he will not incur any such
obligations.
8.8. The Employee agrees to keep confidential (a) all professional,
scientific, commercial, and business information; and (b) any other information
or document that comes to the Employee's knowledge in connection with the
affairs of the Company (collectively, the "Confidential Information"), and
agrees not to use or exploit the Confidential Information or to disclose it to
any third party where such use, exploitation or disclosure in not directly
related to the affairs of the Company, unless the Company gives prior written
authorization of such disclosure.
8.9. The Employees agrees that during his employment by the Company and
thereafter he (a) will not disseminate or otherwise make use of the Confidential
Information or of other non-public information of which he learned while working
for the Company, except where such dissemination or use is directly related to
the affairs of the Company; (b) will maintain the confidentiality of the
Confidential Information; and (c) will not in any way act to injure the
reputation of the Company or any of its affiliated companies.
8.10 The Employee understands and recognizes that his services to the
Company are special and unique. Therefore, he agrees that during the term of
this Agreement and for one (1) year after the termination for any reason of his
employment, he shall not be employed in or give any services to any business or
third party that directly competes with the business of the Company or whose
activities directly conflict with the activities of the Company, unless the
Board of Directors of the Company's parent corporation has given his explicit
written consent prior the commencement of such employment or the giving of such
services. For the purposes of this Section 8.10, the business of the Company
means the discovery, development and commercialization of drug candidates as
described on the Company's Registration Statement on Form S-1 filed with the
United States Securities Exchange Commission on May 19, 2000, provided that the
business of the Company shall include any additional specific business
activities undertaken by the Company since May 19, 2000, regardless of whether
such specific activities were described in a filing with any governmental
authority.
8.11. Upon termination of his employment, the Employee agrees to assist the
Company with an orderly transition of his responsibilities and to return to the
Company any documents, information and/or materials that were given to him or
which were created by him in connection with his employment.
9. Intellectual Property Rights
9.1. The Employee declares that he is aware that anything that is done by
him in the Company or in connection with the Company, whether it be an
invention, a discovery, or the development of an idea or a thing, all within the
framework of the Company's business (the Development") shall belong to and be
controlled by the Company, unless the Board of Directors shall, in writing,
direct otherwise.
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9.2. The Company shall have the right to fully utilize and exploit the
Development, as it sees fit, including changing it, registering part or all of
it as a patent, whether in Israel or abroad, selling it, transferring it to a
third party, all without being required to either receive the Employee's consent
or pay the Employee any additional payment for such Development apart from any
payment he receives pursuant to this Agreement.
9.3. The Development and any subsequent intellectual property arising
therefrom shall remain the sole property of the Employer even after the
Employee's employment terminates for any reason. The termination of this
Agreement, whether due to its breach or its own terms, shall not impair the
Company's exclusive rights in the Development. Notwithstanding the termination
of this Agreement, the Board of Directors shall have the discretion to award the
Employee a cash payment in accordance with the terms of paragraph 5.2.1, above,
as a result of any Development or subsequent intellectual property arising
therefrom developed primarily by the Employee.
9.4. The Employee may not do anything with the Development or any related
materials without the knowledge and prior consent of the Company. The Employee
declares that he neither has nor will have any rights in the Development or its
fruits and that all rights to the Development and its fruits shall fully reside
in the Company.
9.5. Even in the event that at the time of the termination of the Employee's
employment for any reason the Development has not been completed, the Employee
shall be prohibited from any continued activity in connection with the subject
of the Development, alone or in concert with others, that is not explicitly
allowed in writing by the Company. The Company alone will be the sole owner of
the uncompleted Development and shall have the sole right to complete the
Development or to take any other action in connection with the Development.
10. Indemnification
The Company shall take whatever steps are necessary to establish a policy of
indemnifying its officers, including, but not limited to the Employee, for all
actions taken in good faith in pursuit of their duties and obligations to the
Company. Such steps shall include, but shall not necessarily be limited to, the
obtaining of an appropriate level of Directors and Officers Liability coverage.
11. General
11.1. It is agreed that the provisions of this Agreement represent the full
scope of the agreement between the parties and that neither side shall be bound
by any promises, declarations, exhibits, agreements or obligations, oral or
written, that are not included in this Agreement prior to its execution,
provided that this Agreement and any binding agreements between Employee and the
Company's parent corporation, including, but not limited to, any agreements
granting the Employee the option to purchase shares of common stock of the
Company's parent corporation, shall be interpreted as a single
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agreement. Any changes or amendments to this Agreement must be in writing and
signed by both parties.
11.2. This Agreement shall be governed by, and construed and interpreted
under, the laws of the State of Israel. The parties agree that any legal claim
lodged by one party against the other arising from the terms of this Agreement
shall be adjudicated only by the appropriate court in Jerusalem, Israel.
11.3. If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable, and no
provision shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
11.4. The rights, benefits, duties and obligations under this Agreement
shall inure to, and be binding upon, the Company, its successors and assigns,
and upon the Employee and his legal representatives. This Agreement constitutes
a personal service agreement, and the performance of the Employee's obligations
hereunder may not be transferred or assigned by the Employee.
11.5 The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith or with
any other term, condition or provision hereof, and said terms, conditions and
provisions shall remain in full force and effect. No waiver of any term or
condition of this Agreement on the part of either party shall be effective or
any purpose whatsoever unless such waiver is in writing and signed by such
party.
11.6 The headings of Sections are inserted for convenience and shall not
affect any interpretation of this Agreement.
12. Notices
12.1. A notice that is sent by registered mail to a party at its address as
set forth in paragraph 12.2, below, shall be deemed received three (3) days
after its posting, and the receipt stamped by the post office shall represent
definitive evidence of the date of mailing.
12.2. The addresses of the parties for the purposes of this Agreement are:
Company:
0 Xxxxxx Xxxxxx
XXX 00000
Xxxxxxxxx 91236
Employee:
Xxxxxx Xxxxx 00
Xxxxxxxxx 00000
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IN WITNESS WHEREOF the parties have hereunto set their hands at the place and on
the date first above written.
COMPANY EMPLOYEE
/s/ Xxxxxxxx Xxxx /s/ Xxxxxx Xxxxxx
------------------------ ----------------------
By: Xxxxxxxx Xxxx Xxxxxx Xxxxxx
CEO & President
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