Omrix Biopharmaceuticals, Inc. 1120 Avenue of the Americas 4th Floor New York, NY 10036
Exhibit 10.3
November 20, 2008
Xxxxxx Xxxxxxxx
c/o 1120 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
c/o 1120 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Dear Nissim:
This letter agreement is in reference to the employment agreement between you and Omrix
Biopharmaceuticals, Inc. (the “Company”), dated as of January 1, 2008 (the “Employment Agreement”).
As you know, Xxxxxxx & Xxxxxxx, a New Jersey corporation (“Parent”), Whitewater Acquisition Corp.,
a wholly owned subsidiary of Parent (“Sub”), and the Company propose to enter into a merger
agreement (the “Merger Agreement”) that will (subject to the satisfaction of the terms and
conditions of the Merger Agreement) result in the Company becoming wholly-owned by Parent upon the
Closing (as defined in the Merger Agreement) as a result of the Merger (as defined in the Merger
Agreement). As a condition to the willingness of Parent and Sub to enter into the Merger
Agreement, Parent has requested that you enter into this letter agreement setting forth certain
modifications to your rights and obligations under the Employment Agreement and any other agreement
between you and the Company that provides for severance or separation benefits. Capitalized terms
used but not otherwise defined herein will have the meanings assigned thereto under the Employment
Agreement, unless otherwise expressly noted.
In consideration of the benefits provided under Section 4 of this letter agreement and for
other good and valuable consideration, which is hereby acknowledged and agreed by the undersigned,
each of the Company, Parent and you (each, a “party”) agrees as follows:
1. Effectiveness. This letter agreement will become effective upon its execution by
each of the parties; provided, however, that this letter agreement will be null and
void ab initio and of no further force or effect if the Merger Agreement is terminated prior to the
Closing (it being understood that Parent and Sub shall have no liabilities or obligations hereunder
unless and until the Closing occurs).
2. Entitlement to Severance; Miscellaneous. (a) You hereby agree that you shall be
entitled to the severance compensation and benefits described in Sections 7(c)(iii)(A),
(B) and (D) of the Employment Agreement (the “Termination Compensation”) only in the event
that, within 12 months after the occurrence of the Closing, your employment is terminated by the
Company without Cause (including due to death or Disability) or you resign because either of the
following events have occurred: (i) following the Closing, the Company assigns you duties or
responsibilities that are substantially inconsistent with your professional skills and experience
levels as of the Closing (without regard to the fact that the Company is no longer an independent
publicly held company) or (ii) a material reduction in your base salary. In addition, you further
acknowledge and agree that in the event that you receive the Termination Compensation, you shall
not be entitled to the Retention Bonus, and such payments and benefits shall be in lieu of, and not
in addition to, (1) any payments and benefits under any other severance, separation or other
termination plan maintained by the Company, Parent or any of their respective subsidiaries and (2)
under any other individual agreement between you and the Company.
(b) You hereby agree that the provisions of Sections 2, 3, 4, 5, 6 and 7(c)(iii) of the
Employment Agreement shall cease to apply to you from and after the Closing, and you shall instead
be eligible to participate in all plans and programs of Parent applying to employees with your
duties and responsibilities.
(c) Your stock options and restricted stock will be treated upon the Closing in accordance
with Section 3.3 of the Merger Agreement.
3. Stock Awards. You hereby agree that no stock option, restricted stock or other
equity-based or equity-related award granted to you on or after the Closing will be subject to the
provisions in the Employment Agreement regarding accelerated vesting in connection with a
termination of your employment.
4. Retention Payment. Subject to your compliance with Sections 6 and 7 of this letter
agreement, if you remain an active full-time employee of the Company, Parent or any of their
respective subsidiaries through the expiration of the 12-month period following the Closing, you
will receive a lump-sum cash payment equal to the aggregate amount described in Section
7(c)(iii)(B) of the Employment Agreement (the “Retention Bonus”), which will be paid to you on the
10th business day following the Release Effective Date (as defined below). You hereby
agree to amend the Employment Agreement and any other agreement between you and the Company
providing for severance or separation benefits to provide that if you become entitled to payment of
the Retention Bonus, you will not be entitled to the Termination Compensation or any severance
payments or benefits under the Employment Agreement (including under Sections 7(c)(ii) and (iii))
or under any such other agreement, and all of your rights under each such agreement will
immediately terminate. In no event will you receive the Retention Bonus if your employment is
terminated for any reason prior to the expiration of the 12-month period following the Closing.
5. Restrictions on Termination of Employment Prior to Closing. The Company hereby
agrees that during the period following the signing of this letter agreement and prior to the
Closing (the “Pre-Closing Period”), it shall not terminate your employment other than for Cause and
(b) you hereby agree that you will not terminate your employment during the Pre-Closing Period.
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6. Employee Covenants. You acknowledge that as a result of your employment with the
Company, you have been given access to various trade secrets and confidential customer lists of the
Company. In addition, you further acknowledge and agree that a material aspect of Parent’s
decision to enter into the Merger Agreement is the acquisition of the Company’s goodwill for the
purpose of Parent’s carrying on a business that is similar to the business of the Company.
Therefore, in consideration for (a) the offer to purchase each share of the Company’s common stock
that you hold as of the Closing for the Offer Price (as defined in the Merger Agreement), (b) the
cash-out of outstanding Company stock options and restricted shares that you hold as of the Closing
and (c) the Retention Bonus granted under this letter agreement, you agree to remain to be bound by
Section 8 of the Employee Agreement as well as the Company’s Confidentiality and Invention
Assignment Agreement, in accordance with its terms in effect on the date hereof.
7. General Waiver and Release. You agree that the Retention Bonus to which you may
become entitled hereunder will become payable to you only if (a) you execute, prior to the payment
of such amount, a general waiver and release of all claims up to the date of the Release Effective
Date, including those under the Employment Agreement, in favor of Parent, the Company and their
respective subsidiaries and affiliates, and others related to such entities (including their
respective directors, officers and employees), in a form which Parent in its sole discretion shall
deem appropriate, and (b) such waiver and release becomes effective and irrevocable (the date of
such effectiveness and irrevocability, the “Release Effective Date”, which date shall be no later
than 75 days after your date of termination).
8. Withholding. You are solely liable for all taxes and tax penalties that may arise
in connection with this letter agreement (including any taxes arising under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”)), and none of the Company, Parent or their
respective subsidiaries or affiliates will have any obligation to indemnify or otherwise hold you
harmless for any or all such taxes. The Company or Parent may withhold from any amounts payable
under this letter agreement such Federal, state, local or foreign taxes as will be required to be
withheld pursuant to any applicable law or regulation.
9. Section 409A. In order to comply with Section 409A of the Code, and to avoid the
imposition of penalties and additional taxes on you under Section 409A of the Code (the “409A
Taxes”), you hereby agree to amend the Employment Agreement to provide that payment of any
severance that you become entitled to receive thereunder will be delayed by six months, to the
extent required by Section 409A(a)(2)(B)(i) of the Code, and the portion of such severance that
would otherwise have been paid to you during such six-month period will be paid to you in a
lump-sum at the end of such six-month period without interest. While it is intended that the
provisions of this letter agreement comply with Section 409A of the Code, and all provisions of
this letter agreement will be construed and interpreted in a manner consistent with Section 409A of
the Code, neither the Company nor Parent is making any representation or warranty that the
provisions of this letter agreement comply with Section 409A of the Code.
10. Not an Employment Agreement. The terms of this letter agreement neither bind you
to continued employment with the Company, Parent or any of their respective subsidiaries or
affiliates nor confer any rights upon you with respect to the continuation of employment by the
Company, Parent or any of their respective subsidiaries or affiliates.
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11. Governing Law. This letter agreement will be governed by, construed and
interpreted in accordance with, the laws of the State of Delaware, without regard to its principles
of conflicts of laws.
12. Severability. If any term, provision, covenant or condition of this letter
agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable in any jurisdiction, then such provision, covenant or condition will, as to such
jurisdiction, be modified or restricted to the minimum extent necessary to make such provision
valid, binding and enforceable, or, if such provision cannot be modified or restricted, then such
provision will, as to such jurisdiction, be deemed to be excised from this letter agreement and any
such invalidity, illegality or unenforceability with respect to such provision will not invalidate
or render unenforceable such provision in any other jurisdiction, and the remainder of the
provisions hereof will remain in full force and effect and will in no way be affected, impaired or
invalidated.
13. Entire Agreement; Amendments. This letter agreement and the Employment Agreement
contain the entire agreement among you, the Company and Parent concerning the subject matter hereof
and supersedes all prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, among you, the Company and Parent with respect hereto. You acknowledge
and agree that this letter agreement constitutes a modification of your rights under the Employment
Agreement and any other agreement between you and the Company providing for severance or separation
benefits. Notwithstanding the foregoing, all other terms of the Employment Agreement and any such
other agreement that have not been modified by this letter agreement will remain in full force and
effect. This letter agreement may not be modified or amended except by a writing signed by each of
the parties hereto.
14. Successors and Assigns. This letter agreement will be binding on (a) you and your
estate and legal representatives and (b) the Company, Parent and their respective successors and
assigns.
15. Counterparts; Interpretation. This letter agreement may be executed in two or
more counterparts (including via facsimile), each of which will be deemed an original but all of
which together will be considered one and the same agreement. For purposes of this letter
agreement, the term “including” shall mean “including without limitation”.
[Signature Page Follows]
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| Very truly yours, XXXXXXX & XXXXXXX |
||||
| By: | Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Treasurer | |||
| OMRIX BIOPHARMACEUTICALS, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | ||||
| Title: | ||||
Agreed and Accepted:
Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
|
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