EMPLOYMENT AGREEMENT
EXHIBIT
10.1
Duly
made
and executed as of the 1st day of May, 2006, this Employment Agreement (this
“Agreement”) is entered by and between Cell Kinetics Ltd., with offices at 0
Xxxxxx Xx. Xxx 00000 Xxxxxx (the “Company”)
on
the
first part
and
ASaf
Xxx Xxxx I.D. No. 57666844, residing at 00 Xxxx Xxx Xx., Xxxxxxx Xxxxxx,
Xxxxxx (the “Employee”)
Whereas,
the Company wishes to engage the Employee, and Employee wishes to be employed
by
the Company, in the position of Chief Executive Officer, on the terms and
conditions set forth herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Employment
1.1. The
Employee’s employment shall commence on May 1 2006 (the “Commencement
Date”). The Employee shall be employed full time in the position of
Chief Executive Officer. The Employee undertakes to perform such
duties and responsibilities as may be assigned to him by the Company’s Board of
Directors from time to time. The Employee shall be subordinated to
the Company’s Board of Directors.
1.2. The
Employee undertakes to devote his full time, attention, skill, and effort
exclusively to the performance of his duties in the Company and undertakes
not
to engage, whether as an employee or otherwise, in any business, commercial
or
professional activities, whether or not for compensation, during his/her
employment, without the prior written consent of the Company. For the
avoidance of any doubt, nothing contained herein shall derogate from the
Employee’s undertakings as specified in Appendix B attached
hereto. The Company acknowledges that the employee may serve as a
director on the Board of a limited and reasonable number of companies provided
their activity is not competitive with the Company, as well as from time to
time
in coordination with the Company’s management provide Academic courses in his
field. Notwithstanding the above, it is agreed that during up to a 3
month period of transition the Employee may continue in his position at Expandis
in parallel to beginning his employment with the Company though the time
commitment to Expandis shall not interfere with his obligations to the
Company.
1.3. This
Agreement may be terminated by either party at any time by giving the other
party hereto one hundred and twenty (120) days prior written notice of such
termination (the “Notice Period”).
1.4. Notwithstanding
anything to the contrary in Section 1.3 above, the Company may immediately
cease
the Employee’s employment and may shorten all or part of the Notice Period,
regardless of whether notice of termination was given by the Company or by
the
Employee, and in such event the Employee shall be entitled to receive such
Salary and other benefits, as provided in Appendix A attached hereto, as if
the Employee were to continue to be employed by the Company for the duration
of
the Notice Period.
1.5. Notwithstanding
anything to the contrary herein and subject to any applicable law, the Company
may terminate the Employee’s employment for Cause without advance notice and
without derogating from any remedy to which the Company may be
entitled. A termination for “Cause” is a termination due to
(i) the Employee’s embezzlement of funds of the Company; or (ii) the
Employee’s material breach of the terms and conditions of this Agreement; or
(iii) the Employee being involved in an act which constitutes a breach of
trust between himself and the Company or constitutes a breach of discipline;
or
(iv) the Employee’s intentional conduct causing grave injury to the
Company, monetarily or otherwise.
1.6. The
Employee shall have no right for a lien on any of the Company’s assets,
equipment or any other material including car and cellular phone if applicable
and including information or Confidential Information as defined in Exhibit
B
attached to this agreement (hereinafter the “Company’s Equipment”) in its
possession.
2. Special
Agreement
. It
is agreed between the parties that this Agreement is a personal agreement,
and
that the position the Employee is to hold within the Company is a management
position which requires a special measure of personal trust, as such terms
are
defined in the Working Hours and Rest Law 5711 - 1951, as amended (the
“Law”). The provisions of any collective bargaining agreement which
exist or shall exist do not, and will not, apply to the employment of the
Employee, whether such agreement was signed among the government, the General
Federation of Labor and Employers organizations, or any of such parties, or
whether signed by others, in relation to the field or fields of the business
of
the Company or in relation to the position held by or the profession of the
Employee. In light of this relationship of trust, the provisions of
the Law will not apply to the performance by the Employee of his/her duties
hereunder. Thus, the Employee may be required, from time to time and
according to the work load demanded of him/her, to work beyond the regular
working hours and the Employee shall not be entitled to any further compensation
other than as specified in this Agreement and the Appendixes
hereto.
3. Compensation
. In
consideration for the performance of his/her duties, the Employee shall be
entitled to the compensation set forth in Appendix A attached
hereto.
4. Non
Disclosure, Competitive Activity And Ownership Of Inventions
. Simultaneously
with the signing of this Agreement the Employee shall sign the Non-Disclosure,
Unfair Competition and Ownership of Inventions undertaking in favor of the
Company and any subsidiary and parent company of the Company, attached hereto
as
Appendix B.
5. Representations
And Undertakings
. The
Employee represents and undertakes all of the following:
5.1. There
are
no other undertakings or agreements preventing him/her from committing
himself/herself in accordance with this agreement and performing his/her
obligations hereunder.
5.2. To
the
best of his knowledge: (i) he is not currently, nor will he by
entering into this Agreement be deemed to be, violating any rights of his former
employer; and (ii) he is not currently, nor will he by entering into this
Agreement be deemed to be, in breach of any of his/her obligations towards
his
former employer.
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2
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5.3. He
shall
inform the Company, immediately upon becoming aware, of every matter in which
he
or his immediate family has a personal interest and which might give rise to
a
conflict of interest with his duties under the terms of his
employment.
5.4. The
Employee acknowledges and agrees that from time to time he may be required
by
the Company to travel and stay abroad as part of his duties towards the
Company.
5.5. He
shall
not receive any payment and/or benefit from any third party, directly or
indirectly in connection with his employment. In the event the
Employee breaches this Sub-section, without derogating from any of the Company’s
right by law or contract, such benefit or payment shall become the sole property
of the Company and the Company may set-of such amount from any sums due to
the
Employee.
5.6. Employee
undertakes to use the Company’s Equipment and facilities only for the purpose of
his employment. The employee acknowledges and agrees that the Company
is entitled to conduct inspections within the Company’s offices and on the
Company’s computers, including inspections of electronic mail transmissions,
interest usage and inspections of their content. For the avoidance of
any doubt, it is hereby clarified that all examination’s finding shall be the
Company’s sole property.
5.7. In
any
event of the termination of this Agreement, the Employee shall cooperate with
the Company and use his best efforts to assist with the integration into the
Company’s organization of the person or persons who will assume the Employee’s
responsibilities.
6. General
Provisions
6.1. This
Agreement and all Appendixes attached hereto constitute the entire agreement
between the parties hereto and supersedes all prior agreements, proposals,
understandings and arrangements, if any, whether oral or written, between the
parties hereto with respect to the subject matter hereof. Any
amendment to this Agreement must be agreed to in writing by both
parties.
6.2. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Israel and the sole and exclusive place of jurisdiction in any matter
arising out of or in connection with this Agreement shall be the regional labor
court in Tel-Aviv.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
stated above.
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Employee:
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By: /s/
Xxxxx X. Xxxxx
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/s/
Xxxx Xxx-Xxxx
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Title: Director
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3
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APPENDIX
A
COMPENSATION
1. Salary. The
Employee shall be entitled to a gross monthly salary of NIS 40,000 (the
“Salary”) and will change to NIS 50,000 when the Company completes a successful
fund raising from third parties or the public in an amount of US$ 4 million
or
more. The Company will annually evaluate the performance of both the
Employee and the Company and will determine, at the Company’s sole discretion,
whether to increase the Employee’s Salary and, if so, in what
amount.
2. Insurance
Policies. The Company shall insure the Employee under an accepted
‘Manager’s Insurance Scheme’ and/or a pension fund according to the Employee’s
instructions (the “Managers Insurance”),and as follows: (i) the
Company shall pay an amount equal to 5% of the Employee’s Salary towards the
Managers Insurance for the Employee’s benefit and shall deduct 5% from the
Employee’s Salary and pay such amount towards the Managers Insurance for the
Employee’s benefit (the various components of the Managers Insurance shall be
fixed at the discretion of the Employee); (ii) the Company shall pay an amount
equal to 8 1/3% of the Employee’s Salary towards a fund for severance
compensation; and (iii) the Company shall pay an amount of up to 2½ % of the
Employee’s Salary towards disability insurance. The amounts will be
paid up to the maximum total amount prescribed by the Income Tax
Ordinance
3. Keren
Hishtalmut. The Company and the Employee shall open and maintain
a `Keren Hishtalmut’ Fund (the “Fund”). Subject to the maximum amount
stated in Section 3(e) of the Income Tax Ordinance 1961 (the “Income Tax
Ordinance”), the Company shall contribute to such Fund an amount equal to 7½% of
each monthly Salary payment, and the Employee shall contribute to such Fund
an
amount equal to 2½% of each monthly Salary payment. The Employee
hereby instructs the Company to transfer to such Fund the amount of the
Employee’s contribution from each monthly Salary payment. The amounts
will be paid up to the maximum total amount prescribed by the Income Tax
Ordinance. For the avoidance of any doubt, in the event that the
Employee shall accrue an aggregate total amount in the Fund exceeding the
maximum total amount prescribed by the Income Tax Ordinance, such extra amount
shall be deemed as revenue income.
4. Funds
Release. The Managers Insurance and the Fund (including the
amounts contributed by the Company) shall be transferred to the Employee, upon
the termination of the Employee’s employment under any
circumstances. However and subject to any applicable law, the
severance compensation shall not be transferred to the Employee, upon the
termination of the Employee’s employment for Cause.
5. Vacation
and Sick Leave. Subject to the provisions of the Annual Vacation
Law-1951 (the “Vacation Law”), the Employee shall be entitled to 21 vacation
work days (the “Vacation Days”), with respect to each twelve (12) months’
period of continuous employment with the Company. These Vacation Days
include the number of paid vacation days to which the Employee is entitled
in
accordance with the Vacation Law (the “Vacation Law Days”). The
Employee shall not be entitled to carry forward or to redeem any unused vacation
days in excess of the Vacation Law Days without the agreement of the
Board.
A–1
For
the
avoidance of doubt, the dates of the Employee’s vacation shall be determined by
the Company, in its own discretion, in accordance with the Company’s needs, and
to the extent possible, taking into consideration the Employee’s
request. The Company shall be entitled to set uniform dates for
vacation to all or part of its employees, with respect to all or any part of
the
vacation days, as it shall deem fit.
The
Employee shall be entitled to sick leave in accordance with the provisions
of
the Sick Pay Law-1976.
6. Options.
(A) The
Company undertakes to establish a stock option plan for the Company (the
“Plan”).
(B) A
recommendation will be submitted to the Board of Directors of the Company to
grant to the Employee the following rights under the Option Plan, subject to
the
absolute discretion of the Board: During the initial three year term
of this Agreement to grant to Employee in the aggregate a number of options
to
purchase Company common shares at par value, which will be equal to 2% of the
issued shares of the Company on the date of this Agreement (i.e., 20,000
Shares). The options shall vest and have the term as
follows:
(1) 6,000
of
such options will vest on December 31, 2006; 1,750 will vest on each of the
following dates: March 31, 2007, June 30, 2007; September 30, 2007;
December 31, 2007; March 31, 2008, June 30, 2008; September 30, 2008; December
31, 2008, provided the Employee is an employee of the Company at such dates,
respectively; and
(2) (a)
During the time the Employee is employed by the Company the options shall expire
if not exercised within 7 years of vesting or 4 years from the initial public
offering of the Company (the “IPO”), whichever is sooner, or (b) if not
exercised prior to the termination of the Employees employment with the Company,
then 7 years of vesting or, if the IPO occurred, six months from the termination
of the employment of the Employee with the Company, whichever is
sooner.
(C) Subject
to the sole discretion and determination of the board of directors (the “Board”)
of the Company and/or the compensation and options committee of the Company
and
subject to the terms of the Plan and option agreement which shall be approved
and adopted by the Company (and which shall include, inter alia, the exercise
price of the options, the vesting periods and all the other terms and conditions
with respect to the options), the Employee may be granted additional options
after such three year period.
(D) Each
option under this Paragraph 6 will entitle the Employee to purchase one (1)
Common Share of the Company (the “Options”), subject to any
dilution. The Employee undertakes to take all actions and to sign all
documents required, at the discretion of the Company, in order to give effect
to
and enforce the above terms and conditions. Any tax liability in
connection with the Options (including with respect to the grant, exercise,
sale
of the Options or the shares receivable upon their exercise) shall be borne
solely by the Employee.
A–2
(E) In
the
event there is no liquidity event in the Company (sale of the Company to a
third
party or an initial public offering) within 4 years of this Agreement, the
parties will agree on a fair basis for valuing the options based on the fair
market of the Company at the time and the Company upon Employees written request
will purchase the options from Employee at such value.
(F) In
the
event that controlling ownership of the Company is sold by Medis to a third
party (excluding a public offering) during the employment of the Employee,
there
shall be an acceleration of vesting of the next 12 months of option vesting
dates from the effective date of the acquisition. In the event of a
termination of this Agreement by the Company under Paragraph 1.3 of this
Agreement, there shall be an acceleration of the vesting of the next vesting
date from the date on which the Notice period under Paragraph 1.3
ends.
7. Vehicle. For
the purpose of his employment, the Company shall provide the Employee, with
a
vehicle of a make and size to be determined by the Company (the
“Car”). The Company shall bear all the fixed and variable costs of
the car, including licenses, insurance, gas and repairs but the Company shall
not bear costs of any tickets, traffic offense or fines of any
kind. For the avoidance of any doubt, it is agreed that with regard
to any tax obligations, the Employee shall not be entitled to any grossing
up of
the Car benefits.
The
Employee shall: (i) take good care of the Car and ensure that
the provisions and conditions of any policy of insurance relating thereto are
observed (including the provisions with respect to the protection of the Car);
and (ii) in the event that the Employee’s employment terminates for
whatever reason, he/she will forthwith return the Car with the keys and all
licenses and other documentation relating to the Car, to the
Company. The Car shall be used in accordance with the Company’s
policy as shall be in effect from time to time.
The
Employee shall not have any lien right in the Car or in any document or property
relating thereto.
8. Business
Expenses. The Company shall reimburse the Employee for necessary
and customary business expenses incurred by the Employee, in accordance with
Company policy as determined by the Company from time to time.
9. Cell
phone and Laptop. The Employee shall be entitled to a Company
cell phone and laptop computer, and to a home fax and high speed internet
connection, for use in connection with Employee’s duties
hereunder. The Company shall bear all expenses relating to the
Employee’s use and maintenance of such tools attributed to the Employee under
this subsection. Any tax liability with respect to such benefits
shall not be grossed up.
10. Taxes. The
Company shall withhold or charge the Employee with all taxes and other
compulsory payments as required under law in respect of, or resulting from,
the
compensation paid to or received by him/her and in respect of all the benefits
that the Employee is or may be entitled to.
A–3
APPENDIX
B
THIS
UNDERTAKING (“Undertaking”) is entered into as of the 1st day of
May, 2006,
by Xxxx Xxx-Xxxx ID No. 57666844, an individual residing at 00 Xxxx Xxx Xx.
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxx (the “Employee”).
WHEREAS,
the Employee wishes to be employed by Cell Kinetics Ltd., an Israeli company
(the “Company”); and
WHEREAS,
the Company wishes to employ the Employee, subject to his/her executing this
Undertaking in the Company’s favor.
NOW,
THEREFORE, the Employee undertakes and warrants towards the Company and any
subsidiary and parent company of the Company as follows:
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1.
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Confidential
Information.
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1.1.
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The
Employee acknowledges that he/she will have access to confidential
and
proprietary information, including information concerning activities
of
the Company and any of its parent, subsidiary and affiliated companies,
and that he/she will have access to technology regarding the product
research and development, patents, copyrights, customers (including
customer lists), marketing plans, strategies, forecasts, trade secrets,
test results, formulae, processes, data, know-how, improvements,
inventions, techniques and products (actual or planned) of the Company
and
any of its parent, subsidiary and affiliated companies. Such
information in any form or media, whether documentary, written, oral
or
computer generated, shall be deemed to be and referred to herein
as
“Proprietary Information”.
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1.2.
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During
the term of his/her employment or at any time after termination thereof
for any reason, the Employee shall not disclose to any person or
entity
without the prior consent of the Company any Proprietary Information,
whether oral or in writing or in any other form, obtained by the
Employee
while in the employ of the Company (including, but not limited to,
the
processes and technologies utilized and to be utilized in the Company’s
business, the methods and results of the Company’s research, technical or
financial information, employment terms and conditions of the Employee
and
other Company employees or any other information or data relating
to the
business of the Company or any information with respect to any of
the
Company’s customers). Disclosure of Proprietary Information by
Employee pursuant to a court order will not be deemed a violation
hereunder provided the minimum information necessary was disclosed
to meet
the order and that the Company was given at least 30 days written
notice
of the court order prior to the
disclosure.
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1.3.
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Proprietary
Information shall be deemed to include any and all proprietary information
disclosed by or on behalf of the Company irrespective of form, but
excluding information that has become a part of the public domain
not as a
result of a breach of this Undertaking by the
Employee.
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B–1
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1.4.
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The
Employee agrees that all memoranda, books, notes, records (contained
on
any media whatsoever), charts, formulae, specifications, lists and
other
documents made, compiled, received, held or used by the Employee
while in
the employ of the Company, concerning any phase of the Company’s business
or its trade secrets (the “Materials”), shall be the Company’s sole
property and all originals or copies thereof shall be delivered by
the
Employee to the Company upon termination of the Employee’s employment or
at any earlier or other time at the request of the Company, without
the
Employee retaining any copies
thereof.
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In
light of the above provisions, the Employee
undertakes:
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2.1.
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That
during the term of his/her employment in the Company and for a period
of
twelve (12) months thereafter, he/she shall not engage, establish,
open or in any manner whatsoever become involved, directly or indirectly,
either as an employee, owner, partner, agent, shareholder, director,
consultant or otherwise, in any business, occupation, work or any
other
activity which is reasonably likely to involve or require the use
of any
of the Company’s Major Assets.
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2.2.
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That
during the term of his/her employment in the Company and for
twelve (12) months thereafter, not to induce any employee of the
Company or of any of its, parent subsidiary or affiliated companies
to
terminate such employee’s employment
therewith.
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3.
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Ownership
of Inventions. The Employee will notify and disclose to the
Company, or any persons designated by it, all information, improvements,
inventions, formulae, processes, techniques, know-how and data, whether
or
not patentable, made or conceived or reduced to practice or learned
by the
Employee, either alone or jointly with others, during the Employee’s
employment with the Company and connected therewith (all such information,
improvements, inventions, formulae, processes, techniques, know-how,
and
data are hereinafter referred to as the: “Inventions” or
“Invention”) immediately upon discovery, receipt or invention as
applicable. In the event that the Employee, for any reason,
refrains from delivering the Invention upon grant of notice regarding
the
Invention, as described above, the Employee shall notify the Employer
of
the Invention and specify in such notice the date in which the Invention
shall be delivered to the Company and the reason for delay in such
delivery. The Invention shall be delivered as soon as possible
thereinafter. The rights to Inventions shall be as
follows:
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B–2
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(A)
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Inventions
which are in the area of the Company’s business activity (i.e., cell
biology and/or cytometry and/or diagnostics) shall be the property
of the
Company.
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(B)
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Other
Inventions in the medical, biological or medical instrumentation
fields
shall be proposed to the Company and the Company shall within 90
days
inform the Employee in writing if it is interested in pursuing
commercially such Invention and if not if it objects to the Employee
pursuant it during the time he is employed by the Company. If
the Company decides to pursue commercialization of the Invention
the
Employee will deliver the Invention to the Company and the Employee
and
the Company will negotiate a fair additional compensation for the
Employee
in regard to the revenues from the Invention (such as a royalty or
equity
in a dedicated spin-off entity created for the purpose of commercializing
the Invention).
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(C)
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Notwithstanding
(B) above, inventions in the area of orthopedic devices, as well
as
Inventions not falling under (A) or (B) above, may be kept by Employee
without disclosure or assignment to the
Company.
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Delivery
of the notice and the Invention shall be in writing, supplemented with a
detailed description of the Invention and the relevant
documentation. The Employee agrees that all the Inventions under
Paragraph (A) and those selected by the Company for commercialization under
Paragraph (B) shall be the sole property of the Company and its assignees,
and the Company and its assignees shall be the sole owner of all patents and
other rights in connection with such Inventions. The Employee hereby
assigns to the Company any rights the Employee may have or acquire in such
Inventions.
The
Employee further agrees as to all such Inventions delivered to the Company
to
assist the Company, or any persons designated by it, in every proper way to
obtain and from time to time enforce such inventions in any way including by
way
of patents over such Inventions in any and all countries, and to that effect
the
Employee will execute all documents for use in applying for and obtaining
patents over and enforcing such Inventions, as the Company may desire, together
with any assignments of such Inventions to the Company or persons or entities
designated by it.
Except
as
otherwise expressly provided above, the Employee shall not be entitled, with
respect to all of the above, to any monetary consideration or any other
consideration except as explicitly set forth in Appendix A hereto, or in
any other written agreement or arrangement signed by the
Company. With respect to all of the above any, oral understanding,
communication or agreement not duly signed by the Company shall be
void.
B–3
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4.
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General.
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4.1.
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The
Employee acknowledges that the provisions of this Undertaking serve
as an
integral part of the terms of his/her employment and reflect the
reasonable requirements of the Company in order to protect its legitimate
interests with respect to the subject matter hereof. If any
provision of this Undertaking (including any sentence, clause or
part
thereof) shall be adjudicated to be invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the portion
thus
adjudicated to be invalid or unenforceable, such deletion to apply
only
with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made. In addition,
if any particular provision contained in this undertaking shall for
any
reason be held to be excessively broad as to duration, geographical
scope,
activity or subject, it shall be construed by limiting and reducing
the
scope of such provision so that the provision is enforceable to the
fullest extent compatible with applicable
law.
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4.2.
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The
provisions of this Undertaking shall continue and remain in full
force and
effect as to facts or events arising during the period of the employment
of the Employee hereunder following the termination of the employment
relationship between the Company and the Employee for whatever
reason. This Undertaking shall not serve in any manner as to
derogate from any of the Employee’s obligations and liabilities under any
applicable law.
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/s/
Xxxx Xxx-Xxxx
Employee
/s/
Xxxx Xxx-Xxxx
Signature
B–4
