Exhibit 10.26
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of March 18, 2006 by and
between Omrix Biopharmaceuticals, Inc., a Delaware corporation (the "Company")
and Xxxxxx Xxxxxxxxxxx (the "Executive").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Term of Employment; Executive Representation.
a. Employment Term. Subject to the provisions of Section 6 of this Agreement,
Executive shall be employed by the Company for a period commencing on March 6,
2006 (the "Effective Date") and ending on the third anniversary of the Effective
Date (the "Employment Term") on the terms and subject to the conditions set
forth in the Agreement. Unless earlier terminated in accordance with the terms
hereof, upon the third anniversary of the Effective Date the Employment Term
will be automatically extended for successive one year terms, unless the Company
or the Executive gives the other party 90 days' prior written notice of an
intention not to renew the agreement.
b. Executive Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the Company and the
performance by Executive of the Executive's duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.
2. Position; Place of Performance.
a. During the Employment Term, Executive shall serve as Vice President, Business
Development. In such position, Executive shall have such duties and authority as
shall be determined from time to time by the Chief Executive Officer of the
Company ("CEO"). The Executive shall report to the CEO.
b. During the Employment Term, Executive shall devote Executive's full business
time and best efforts to the performance of Executive's duties hereunder and
will not engage in any other business, profession or occupation (including in an
advisory capacity, consulting capacity, or otherwise) for compensation or
otherwise which would conflict with the rendition of such services either
directly or indirectly, without the prior written consent of the CEO; provided
that Executive shall be permitted to participate in such charitable and
community-related activities as Executive may choose; provided further that such
services do not interfere or conflict with his duties hereunder.
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c. During the Employment Term, Executive shall be located in the Company's
offices in New York, New York, except for required travel on the Company's
business.
3. Compensation.
a. During the Employment Term, the Company shall pay Executive a base salary
(the "Base Salary") at the annual rate of $210,000 (less applicable withholding
taxes), payable in regular installments in accordance with the Company's usual
payment practices. Executive shall be entitled to such increases in Executive's
Base Salary, if any, as may be determined from time to time in the sole
discretion of the CEO.
b. With respect to each year during the Employment Term, provided the Executive
is employed and in good standing at the time bonuses are distributed, Executive
shall be eligible to receive an annual bonus award (an "Annual Bonus")
calculated based on Company and individual performance measures established by
the Board each year. For 2006, the Executive's target bonus award shall be 40%
of his Base Salary, and the Executive may receive between 0% and his target
percentage (pro-rated to reflect the partial year of employment), based on the
level of achievement of such performance measures.
c. During the Term of the Executive's employment hereunder, the Executive shall
be eligible to participate in the Company's 2004 Equity Incentive Plan or its
successor plan (the "Equity Incentive Plan") in accordance with the terms and
conditions of the Equity Incentive Plan. Except as set forth in paragraph 3(d)
below, the decision to grant any award to the Executive pursuant to the Equity
Incentive Plan, and the amount of any such award, shall be within the sole
discretion of the Company's Board of Directors.
d. The Company shall cause the Executive to be granted stock options to purchase
100,000 shares of Company common stock pursuant to the Equity Incentive Plan
(the "Stock Options") as soon as practicable following the Effective Date. The
exercise price of the Stock Options shall be the fair market value of the Stock
Options on the date of grant, and the Stock Options shall vest over four years,
with 25,000 Stock Options vesting each year based on continued employment
[(subject to acceleration upon a Change in Control, as set forth in paragraph
6(c)(iii) herein below) . The complete terms and condition of the Stock Options
shall be set forth in a separate stock option agreement between the Executive
and the Company.
4. Business and Commuting Expenses. During the Employment Term, reasonable,
documented business travel expenses incurred by Executive in the performance of
Executive's duties hereunder shall be reimbursed by the Company in accordance
with Company policies. In addition, the Company agrees to pay directly, or to
reimburse the Executive, for the Executive's actual, documented costs of
commuting (including a monthly commuter pass and parking fees) on the Metro
North Railroad, up to a maximum of $3,400 a year. The Executive shall be solely
responsible for any income tax liability resulting from these Company payments
or reimbursements.
5. Benefits; Vacation. The Company does not currently maintain any employee
benefits plans, and has agreed to pay directly, or reimburse the Executive, for
the Executive's actual, documented costs in connection with: (i) establishing
and maintaining a 401(k) plan or other
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comparable deferred tax savings plan for the benefit of the Executive, up to a
maximum of $1,000 a year; and (ii) continuing existing, in force disability
coverage for the Executive (i.e., insurance premiums) during the Employment
Term, up to a maximum of $6,000 a year. The Executive shall be solely
responsible for any income tax liability resulting from these Company payments
or reimbursements. During the Employment Term, the Executive shall be entitled
to fifteen (15) vacation days per calendar year, which amount shall be pro-rated
for any partial calendar year during which the Executive is employed by the
Company. Executive shall accrue such vacation days in accordance with the
policies of the Company as in effect from time to time. Executive shall also be
entitled to all US official Federal Holidays.
6. Termination. The Employment Term and Executive's employment hereunder may be
terminated by either party at any time and for any reason; provided that
Executive will be required to give the Company at least 30 days advance written
notice of any resignation of Executive's employment. Notwithstanding any other
provision of this Agreement, the provisions of this Section 6 shall exclusively
govern Executive's rights upon termination of employment with the Company and
its affiliates.
a. By the Company For Cause; By Executive for any Reason; Expiration of the
Employment Term.
(i) The Employment Term and Executive's employment hereunder may be
terminated by the Company for Cause (as defined below) or by the Executive
for any reason, subject to the notice period required by this Section 6.
(ii) For purposes of this Agreement, "Cause" shall mean: (i) the failure
by the Executive to render services to the Company in accordance with his
assigned duties and responsibilities under this Agreement (other than any
such failure resulting from the Executive's Disability); (ii) willful
misconduct or gross negligence of the Executive in the performance of his
duties and responsibilities for the Company or any of its subsidiaries or
affiliates under this Agreement; (iii) the Executive's conviction of, or
plea of guilty or nolo contendre to, a felony, whether or not committed in
the course of performing his duties for the Company or any of its
subsidiaries or affiliates; (iv) the Executive's disloyalty, deliberate
dishonesty, breach of fiduciary duty or material breach of the terms of
this Agreement; (v) the commission by the Executive of embezzlement, theft
or any other fraudulent act or omission; (vi) the commission by the
Executive of any act or omission in violation of the rules or policies of
the Company that results in material loss, damage or injury to the Company
or any of its subsidiaries or affiliates or materially adversely affects
the business activities, reputation, goodwill or image of the Company or
any of its subsidiaries or affiliates; (vii) the unauthorized disclosure
by the Executive of any "Confidential Information," as that term is
defined in the Undertaking (defined below); (viii) the commission by the
Executive of any act that constitutes unfair competition with the Company
or any of its subsidiaries or affiliates; (ix) the material breach by the
Executive of any agreement to which he and the Company or any of its
subsidiaries or affiliates are parties that results in material loss,
damage or injury to the Company or any of its subsidiaries or affiliates,
or materially adversely affects the business activities, reputation,
goodwill or image of the Company or any of its subsidiaries or affiliates,
provided that, if such breach is capable of being remedied,
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Executive has failed to remedy such breach within ten days after Executive
has received notice requesting that Executive remedy such breach.
(iii) If Executive's employment is terminated by the Company for Cause, or
if Executive terminates his employment hereunder for any reason, Executive
shall be entitled to receive the following amounts (collectively, the
"Accrued Obligations"):
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of termination
for any previously completed calendar year;
(C) any company vacation days earned but not taken; and
(D) reimbursement for any unreimbursed business expenses (including
reimbursable commuting expenses) properly incurred by Executive in
accordance with Company policy prior to the date of Executive's
termination.
In addition, if the Employment Term and Executive's employment under
this Agreement is terminated by reason of the expiration of the Employment
Term following a notice of non-renewal by the Company or Executive,
Executive shall be entitled to receive the Accrued Obligations.
Following such termination of Executive's employment by the Company
for Cause, by Executive for any reason, or by reason of the expiration of
the Employment Term, except as set forth in this Section 6(a), Executive
shall have no further rights to any compensation or any other benefits
under this Agreement.
b. Disability or Death.
(i) The Employment Term and Executive's employment hereunder shall
terminate upon Executive's death or if Executive becomes physically or
mentally incapacitated and is therefore unable for a period of six (6)
months during any twelve (12) month period to perform Executive's duties,
determined by the Company in its reasonable discretion (such incapacity
hereinafter referred to as "Disability"). Upon termination of Executive's
employment hereunder for either Disability or death, Executive or
Executive's estate (as the case may be) shall be entitled to receive the
Accrued Obligations.
Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 6(b), Executive or
Executive's estate (as the case may be) shall have no further rights to
any compensation or any other benefits under this Agreement.
c. By the Company Without Cause.
(i) The Employment Term and Executive's employment hereunder may be
terminated by the Company without Cause.
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(ii) If Executive's employment is terminated by the Company without Cause
(other than by reason of death or Disability) and not on or following a
Change in Control (as defined below), Executive shall be entitled to
receive:
(A) the Accrued Obligations; and
(B) continuation of the Executive's then-current base salary for
three months.
(iii) If Executive's employment is terminated by the Company without Cause
(other than by reason of death or Disability) on or following a Change in
Control (as defined below), Executive shall be entitled to receive:
(A) the Accrued Obligations;
(B) continuation of the Executive's then-current base salary for six
months;
Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability),
except as set forth in this Section 6(c), Executive shall have no further
rights to any compensation or any other benefits under this Agreement.
Notwithstanding the foregoing, the Company's obligation to provide the
Executive the payments described in this Section 6(c) shall be contingent
upon Executive's continued compliance with the restrictive covenants set
forth in Section 7.
(iv) For purposes of this Agreement, "Change in Control" shall mean the
first to occur of any of the following:
(A) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than (A) the Company, (B) any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company, and (C) any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of Stock), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the
Company's then outstanding voting securities (excluding any person
who becomes such a beneficial owner in connection with a transaction
immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the
Board, the entity surviving such transaction or, if the Company or
the entity surviving the transaction is then a subsidiary, the
ultimate parent thereof);
(B) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation immediately
following which the individuals who comprise the Board immediately
prior thereto constitute at least a majority of the Board, the
entity surviving such merger or consolidation or, if the Company or
the entity surviving such merger is then a subsidiary, the ultimate
parent thereof; or
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(C) the stockholders of the Company approve a plan of complete
liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction
having a similar effect), other than a sale or disposition by
the Company of all or substantially all of the Company's
assets to an entity, immediately following which the
individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of
the entity to which such assets are sold or disposed of or, if
such entity is a subsidiary, the ultimate parent thereof.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to have occurred by virtue of (x) an offering of securities of the
Company that is registered with the Securities and Exchange Commission or
(y) the consummation of any transaction or series of integrated
transactions immediately following which the holders of the Stock
immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
d. Notice of Termination. Any purported termination of employment by the Company
or by Executive (other than due to Executive's death) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 8(f) hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment under
the provision so indicated.
7. Confidentiality/Non-Competition.
a. The Executive has executed a separate Employee Undertaking (the
"Undertaking"), pursuant to which he agrees to be bound by certain
confidentiality, non-competition, non-solicitation and other restrictive
covenants and which are incorporated herein by reference.
b. The Executive hereby agrees and covenants that he shall not, directly or
indirectly, in any capacity whatsoever, including, without limitation, as an
employee, employer, consultant, member, principal, partner, shareholder,
officer, director, agent, holder of financial interest, or any other individual
or representative capacity, in any individual, partnership, corporation, limited
liability company, association, trust, joint venture, unincorporated association
or government entity ("Person"), whether on the Executive's own behalf or on
behalf of any Person or entity or otherwise howsoever (other than as a holder of
not more than one percent (1%) of the combined voting power of the outstanding
stock of a publicly held company), during the Executive's employment with the
Company and for a period of one (1) year following after the termination or
cessation of this Agreement and of the Executive's employment with the Company
for any reason, directly or indirectly engage in, own, manage, operate, control,
be employed by, consult for, participate in, or be connected in any manner with
the ownership, management, operation or control of any business in competition
with the "business of the Company or its affiliates or their successors." The
"business of the Company or its affiliates or
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their successors" is defined as the business of plasma fractionation or
manufacturing, selling, researching, distributing, marketing or otherwise
conducting business in any way relating to the development, manufacture, sale or
distribution of plasma derivative products, including, without limitation,
biological surgical or fibrin adhesives, whether the Company is actually engaged
in such business activities or has taken action to begin engaging in such
business activities, even if any related services or products are not completed
or ready for marketing or distribution, at the time that this Agreement and the
Executive's employment with the Company terminates.
c. The Executive acknowledges and recognizes the highly competitive nature of
the business of the Company, and agrees that the covenants set forth herein,
including the Undertaking, are reasonable and necessary to protect the Company's
interests. It is expressly understood and agreed that although Executive and the
Company consider such restrictions to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained herein and in the Undertaking is an
unenforceable restriction against Executive, the provisions of this Agreement
and the Undertaking shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained herein
or in the Undertaking is unenforceable, and such restriction cannot be amended
so as to make it enforceable, such finding shall not affect the enforceability
of any of the other restrictions contained therein.
8. Specific Performance. Executive acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
Section 7 would be inadequate and, in recognition of this fact, Executive agrees
that, in the event of such a breach or threatened breach, in addition to any
remedies at law, the Company, without posting any bond, shall be entitled to
cease making any payments or providing any benefit otherwise required by this
Agreement and obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
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9. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement and the Undertaking contain the
entire understanding of the parties with respect to the subject matter hereof
and thereof and shall supersede any other agreements, offer terms or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof and thereof which have been made by either party. There
are no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein. This Agreement and the Undertaking may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
d. Severability. In the event that any one or more of the provisions of this
Agreement and/or the Undertaking shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement and/or the Undertaking shall not be
affected thereby.
e. Binding Agreement; Assignment. This Agreement shall inure to the benefit of
and be binding upon the personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees of the
Executive. This Agreement shall not be assignable by Executive. This Agreement
may be assigned by the Company to a company which is a successor in interest to
substantially all of the business operations of the Company or to a parent of
the Company. Such assignment shall become effective when the Company notifies
the Executive of such assignment or at such later date as may be specified in
such notice. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor company,
provided that any assignee expressly assumes the obligations, rights and
privileges of this Agreement.
f. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below Agreement, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
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If to the Company:
Omrix Biopharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attn: C.E.O
If to Executive: To the most recent address of Executive set forth in the
personnel records of the Company.
g. Withholding Taxes. Any payments provided for hereunder shall be paid net of
any applicable withholding taxes required under federal, state or local law and
any additional withholding to which the Executive has agreed.
h. Survival. The obligations of the Company and the Executive under this
Agreement which by their nature may require performance after the expiration or
termination of the Employment Term (including, without limitation, those under
Section 7) shall survive the expiration or termination of this Agreement.
i. Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
/s/ Xxxxxx Xxxxxxxxxxx
-----------------------------------
XXXXXX XXXXXXXXXXX
OMRIX BIOPHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxx
----------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
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