EMPLOYMENT AGREEMENT
EXHIBIT 10.4
THIS AGREEMENT effective the 27th day of September, 2004 (the “Effective Date”)
between OSTEOTECH, INC., a Delaware corporation (the “Corporation”) and Xxxxxx Xxxxxxxxx (the
“Employee”).
WITNESSETH:
WHEREAS, the Corporation desires to retain the Employee as Vice President Supply Chain &
Distribution; and
WHEREAS, the Employee desires to maintain such employment upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set
forth, the parties hereto agree as follows:
1. Term. Unless sooner terminated in accordance with this Agreement, the term of this
Agreement and the term of employment of the Employee shall be for two (2) years commencing on the
Effective Date hereof and shall be automatically renewable for successive additional two (2) year
terms unless at least three (3) months prior to the initial two-year period or any subsequent
two-year term the Corporation terminates this Agreement by written notice to the Employee,
whereupon this Agreement shall be terminated at the end of the applicable two-year period (with
such initial two year term and any two year renewal thereof, unless sooner terminated in accordance
with this Agreement being the “Term of Employment”).
2. Duties. The Employee shall be employed in an executive capacity as the Vice
President Supply Chain & Distribution of the Corporation. The Employee shall perform such
duties and services, consistent with his positions, as may be assigned to him from time to time by
the President & Chief Operating Officer of the Corporation, In furtherance of the foregoing, the
Employee hereby agrees to perform well and faithfully the aforesaid duties and responsibilities
and the other reasonable senior executive duties and responsibilities assigned to him from time to
time by the Board of Directors of the Corporation or its designee. During the Term of the
Employment, the Corporation shall provide the Employee with an office, secretarial and other
support services at its headquarters as may be required for the Employee to perform the duties
assigned to him hereunder.
3. Time
to be Devoted to Employment.
(a) Except for reasonable vacations (to consist of at least 4 weeks per year) and absences
due to temporary illness, during the Term of Employment, the Employee shall devote substantially
his full time and energy to the business of the Corporation.
(b) During the Term of Employment, the Employee shall not be engaged in any other business
activity which, in the reasonable judgment of the Corporation, conflicts with the duties of the
Employee hereunder, whether or not such activity is pursued for gain, profit or other pecuniary
advantage.
4. Compensation; Reimbursement.
(a) During the Term of Employment, the Corporation (or at the Corporation’s option, any
subsidiary or affiliate thereof) shall pay to the Employee an annual base salary (“Base Salary”)
of $150,000, payable in installments as is the policy of the Corporation with respect to employees
of the Corporation at substantially the same employment level as the Employee, but in no event
less frequently than once per month. Thereafter, the Base Salary shall be subject to increase at
the option and in the sole discretion of the Board of Directors of the Corporation.
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(b) Employee shall be eligible for an annual bonus as determined by the Board of Directors of
the Corporation based on Employee’s performance. The bonus payment to Employee for a calendar year
is contingent upon the Employee being retained as an employee of the Corporation at the time such
payments are made.
(c) Effective in 2005, the Employee shall be eligible for an annual stock option grant
consistent with the Corporation’s Stock Option Plan with said grant being determined by the Board
of Directors of the Corporation based on the Corporation’s performance. Upon employment, the
Employee will receive a stock option grant in the amount of 25,000 shares.
(d) During the Term of Employment, the Employee shall be entitled to such fringe benefits as
are made available from time to time to the employees of the Corporation at substantially the same
employment level as the Employee, including, without limitation, 4 weeks of paid vacation time.
(e) The Corporation shall reimburse Employee, in accordance with the practice from time to
time for other officers of the Corporation, for all reasonable and necessary traveling expenses,
disbursements and other reasonable and necessary incidental expenses incurred by him for or on
behalf of the Corporation in the performance of his duties hereunder upon presentation by the
Employee to the Corporation of appropriate vouchers, receipts and reports.
5. Disability or Death.
(a) If the Employee is incapacitated or disabled by accident, sickness or otherwise so
as to render him mentally or physically incapable of performing the services required to be
performed by him under this Agreement for a period of 90 consecutive days or longer, (such
condition being herein referred to as “Disability”), the Employee will be eligible to receive
benefits under the Corporation’s Long Term Disability Benefits Plan pursuant to the terms and
conditions of such
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plan. Until the Employee becomes eligible for benefits under the Corporation’s Long Term
Disability Benefits Plan and so long as the Corporation shall not have otherwise terminated the
Employee’s employment hereunder in accordance with this Agreement, the Employee shall be entitled
to receive his compensation, notwithstanding any such Disability.
(b) If the Employee dies during the Term of Employment, his employment hereunder shall be
deemed to cease as of the date of his death.
6. Termination For Cause. The Corporation may, with the approval of a majority of the
Board of Directors of the Corporation, terminate the employment of the Employee hereunder at any
time during the Term of Employment for “cause” (such termination being hereinafter called a
“Termination For Cause”) by giving the Employee notice of such termination, and upon the giving of
such notice termination shall take effect immediately. For the purposes of this Section 6, “cause”
shall mean (i) the Employee’s actions on behalf of the Corporation or any subsidiary or affiliate
thereof, without the authorization of the Board of Directors, Chief Executive Officer, or President
& Chief Operating Officer of the Corporation, which actions are knowingly for the pecuniary benefit
of the Employee or members of his family and which actions materially and adversely effect the
business or affairs of the Corporation or any subsidiary’ or affiliate thereof, or (ii) the
Employee fails in any material respect to observe and perform his obligations hereunder or under
the Employee Confidential Information, Invention and Non-Competition Agreement by and between
Employee and Corporation which failure is not cured within twenty (20) days after written notice
thereof is given to the Employee by the Corporation, or, (iii) the commission by the Employee of an
act involving embezzlement or fraud against the Corporation (other than non-material expense
account issues) or commission or conviction of a felony or (iv) the repeated use by the Employee of
alcohol in a manner which impairs his duties or the use of any controlled substance other than
under
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a physicians prescription.
7. Termination Without Cause. The Corporation may, with the approval of a majority of
the Board of Directors of the Corporation, terminate the employment of the Employee hereunder at
any time during the Term of Employment without “cause” (such termination being hereinafter called a
“Termination Without Cause”) by giving the Employee notice of such termination, upon the giving of
such notice, termination shall take effect immediately.
8. Voluntary Termination. Any termination of the employment of the Employee hereunder
otherwise then as a result of an Involuntary Termination, a Termination For Cause or a Termination
Without Cause shall be deemed to be a “Voluntary Termination”. A Voluntary Termination shall be
deemed to be effective immediately upon receipt of notice to the Corporation of such termination.
9. Effect
of Termination of Employment.
(a) Upon the termination of the Employee’s employment hereunder pursuant to a
Voluntary Termination or a Termination For Cause, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Corporation under this Agreement
except to receive:
| (i) | the unpaid portion of the Base Salary provided for in Section 4(a), computed on a pro-rata basis to the date of termination; and | ||
| (ii) | reimbursement for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 5(e). | ||
| (iii) | any amounts due and owing to the Employee by the Corporation under any benefit plan. |
(b) Upon the termination of the Employee’s employment hereunder pursuant to
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Disability or death neither the Employee nor his beneficiary or estate shall have any further
rights or claims against the Corporation under this Agreement except to receive payments equal to
that provided for in Section 5(a), if applicable, and Section 9(a) hereof and any other benefits
available under the Corporation’s Benefits Plans.
(c) Upon the termination of the Employee’s employment hereunder pursuant to a Termination
Without Cause, neither the Employee nor his beneficiary or estate
shall have any further rights or
claims against the Corporation under this Agreement except to receive a termination payment equal
to that provided for in Section 9(a) hereof, plus an aggregate amount equal to twelve (12) months
Base Salary, payable in equal monthly installments and the continuation of medical and dental
benefits and life insurance for the same twelve (12) month period to the extent such benefits were
being provided to Employee at the time of termination.
10. General Provisions
(a) This Agreement and any or all terms hereof may not be changed, waived, discharged, or
terminated orally, but only by way of an instrument in writing signed by the parties.
(b) This Agreement shall be governed by and construed in accordance with the laws of the State
of New Jersey, without reference to the conflicts of laws of the State of New Jersey or any other
jurisdiction.
(c) If any portion of this Agreement shall be found to be invalid or contrary to public
policy, the same may be modified or stricken by a Court of competent jurisdiction, to the extent
necessary to allow the Court to enforce such provision in a manner which is as consistent with the
original intent of the provision as possible. The striking or modification by the Court of any
provision shall not have the effect of invalidating the Agreement as a whole.
(d) Employee acknowledges that he has signed the Corporation’s Confidential
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Information, Invention and Non-Competition Agreements and said agreements are made a part
hereof.
(e) This Agreement, together with the Corporation’s Confidential Information, Invention and
Non-Competition Agreements, constitutes the entire and exclusive agreement between Employee and
Corporation pertaining to the subject matter thereof, and supersedes and replaces any and all
earlier agreements.
11. Notices. Notices and other communications hereunder shall be in writing and shall
be delivered personally or sent by air courier or first class certified or registered mail, return
receipt requested and postage prepaid, addressed as follows:
If to the
Employee:
Xxxxxx Xxxxxxxxx
X.X.Xxx 163188
Xxxx Xxxxx, Xxxxx 00000
X.X.Xxx 163188
Xxxx Xxxxx, Xxxxx 00000
If to the Corporation:
Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: President & Chief Operating Officer
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: President & Chief Operating Officer
Copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq
All notices and other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of delivery if personally
delivered; on the business day after the date when sent if sent by air courier; and on the third
business day after the date when sent if sent by mail, in each case addressed to such party as
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provided in this Section or in accordance with the latest unrevoked direction from such party.
12. Headings. The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.
13. Assignment. This Agreement is personal in its nature and the parties hereto shall not,
without the consent of the other, assign or transfer this Agreement or any rights or obligations
hereunder; provided, however, that the provisions hereof shall inure to the benefit of, and be
binding upon (i) each successor of the Corporation, whether by merger, consolidation, transfer of
all or substantially all assets, or otherwise and (ii) the heirs and legal representatives of the
Employee.
IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date
first above written.
| OSTEOTECH INC.: | ||||||
| By: | /s/ Xxx-Xxxxx-Akyaw | |||||
| Name: | Xxx-Xxxxx-Akyaw | |||||
| Title: | President & Chief Operating Officer | |||||
| EXECUTIVE: | ||||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxxxx | |||||
| Title: | Vice President Supply Chain & Distribution | |||||
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