Exhibit 10.33
EMPLOYMENT AGREEMENT
with
XXXXXX XXXXXXXX
AGREEMENT entered into as of October 1, 1996, between Xxxxxx
Xxxxxxxx residing at 00 Xxxxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxx ("Employee"),
and ESC Medical Systems Ltd., an Israeli company with offices located at
Yokneam, Israel ("ESC" or the "Company").
W I T N E S S E T H:
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WHEREAS, ESC is in the business of developing, manufacturing and
marketing medical instruments (the "Business"); and
WHEREAS, ESC desires to employ Employee as the President and
Chief Executive Officer, responsible for the operation of the Company.
NOW THEREFORE, in consideration of the premises and mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment.
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With effect from the Effective Date (as defined in Section 3),
ESC employs Employee and Employee accepts employment with ESC upon the
terms and conditions set forth herein.
2. Duties.
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2.1. ESC hereby engages Employee to serve as its President and
Chief Executive Officer, during the term hereof, he shall be the most
senior corporate officer of the Company responsible for the daily
management and operation of the Company.
2.2. Employee shall devote his full business time and attention
to the Business of the Company and shall perform his duties diligently and
promptly for the benefit of ESC. During his employment thereunder, Employee
shall not undertake or accept any other paid or unpaid employment or
occupation or engage in or be associated with, directly or indirectly, any
other business, duties or pursuits except with the prior written consent of
the Board of Directors.
2.3. Employee shall report regularly to the Board of Directors of
the Company.
3. Term.
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3.1. Employee's employment under this Agreement shall commence
on October 1, 1996 (the "Effective Date") and shall end on the earliest of
(i) the death or disability (as defined herein) of Employee; (ii) the
termination of Employee's employment by ESC for cause (as defined herein)
after providing thirty (30) days advance notice (as defined herein); or
(iii) three (3) years from December 31, 1996. The term will extend for
additional one-year periods at December 31 of each year commencing on
December 31, 1997 unless either party delivers a notice of intention not to
renew no later than October 1 of any year.
3.2. Either party may terminate this agreement without cause,
as hereinafter defined, by six months prior written notice, during which
period Employee shall continue his services unless otherwise instructed by
the Board. In the event of a change in control of the Company, which for
purposes of this provision shall mean an acquisition of all or
substantially all of the assets of the Company or 25% or more of the shares
of the Company by a person or Group as defined by Regulation 13D of the
U.S. Securities & Exchange Act of 1934, the Company may not exercise this
termination provision. In such event, Employee will be employed by the
Company for a minimum period of two years following a termination notice to
Employee by Company. All the terms and conditions will apply during this
two-year period.
3.3. For the purpose of this paragraph 3, "disability" shall
mean any physical or mental illness or injury as a result of which Employee
remains absent from work for a period of two (2) successive months.
Disability shall occur upon the end of such two-month period.
3.4. For the purpose of this paragraph 3, "cause" shall exist
if Employee (i) breaches any of the material terms of conditions hereof
including, without limitation, the material terms of paragraphs 11 or 12;
(ii) substantially fails to perform the Employee's areas of responsibility
set forth herein; (iii) engages in willful misconduct or acts in bad faith
with respect to ESC, in connection with and related to the employment
hereunder, (iv) is convicted of a felony or is held liable by a court of
competent jurisdiction for common law fraud against ESC; or (v) fails to
comply with the instructions of the Company's Board of Directors in a
manner materially detrimental to the Company, provided that, with respect
to clauses (i), (ii) and (v), if Employee has cured any such condition
(that is reasonably susceptible to cure) within 30 days fo the advance
notice (as defined herein) then "cause" shall be deemed not to exist. For
purposes of this paragraph 3, "advance notice" shall constitute a written
notice delivered to Employee that sets forth with particularity the facts and
circumstance relied upon by ESC as the basis for cause.
3.5. During the period following notice of termination by any
party for any reason, the Employee shall cooperate with ESC and use his
best efforts to assist the integration into the ESC organization of the
person or persons who will assume the Employee's responsibilities.
4. Compensation.
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4.1. During the term hereof, and subject to the performance of
the services required to be performed hereunder by Employee, ESC shall pay
to Employee for all services rendered by Employee under this Agreement a
salary, payable not less often than monthly and in accordance with ESC's
normal and reasonable payroll practices, in a monthly gross amount of
$20,833 inclusive of amounts payable by the Company for the social benefits
set forth in paragraphs 4.5, 4.6 and 4.7 (other than specified Company
contributions), the provision of an automobile as set forth in paragraph 7,
and life insurance as set forth in paragraph 8 (the "Gross Salary") and
life insurance as set forth in paragraph 8.
4.2. Translations to Israeli currency shall be calculated on
the basis of the last representative rate of exchange published by the Bank
of Israel at the date immediately prior to payment. The linkage of the
Employee's compensation to the U.S. Dollar shall be in lieu of Tosefet
Yoker, Tosefet Shehika and all other similar wage increases required to be
paid under Israel law.
4.3. The Employee shall receive the Gross Salary payable in
respect to periods of the Employee's military reserve duty. The Company
shall be entitled to receive and to retain any amounts payable by the
National Insurance Institute or any other agency or entity in respect of
such periods.
4.4. The Board shall undertake an evaluation of the Employee's
performance from time to time and may increase the Gross Salary or grant a
performance bonus if it should determine in its sole and absolute
discretion that such increase or bonus is justifiable and appropriate.
4.5. The Company and the Employee will obtain and maintain
Managers Insurance (Bituach Menhalim) for the exclusive benefit of the
Employee in the customary form. The Company shall contribute an amount
equal to thirteen and one-third percent (13-1/3%) of the difference between
each monthly Gross Salary payment and any amounts contributable by the
Company under paragraphs 4.5, 4.6, 4.7 and 7, and the Employee shall
contribute five percent (5%) of the difference between each monthly Gross
Salary payment and any amounts contributable by the Company under
paragraphs 4.5, 4.6, 4.7 and 7, toward the premiums payable in respect of
such insurance. It is hereby agreed that, should the Employee be or become
entitled to severance pay under applicable law, his benefits under the said
insurance shall be in lieu thereof and in full and final substitution
therefor.
4.6. The Company and the Employee shall open and maintain a
Keren Hishtalmut Fund. The Company shall contribute to such Fund an amount
equal to seven and one-half percent (7-1/2%) of the difference between each
monthly Gross Salary payment and any amounts contributable by the Company
under paragraphs 4.5, 4.6, 4.7 and 7, and the Employee shall contribute to
such Fund an amount equal to two and one- half percent (2-1/2%) of the
difference between each monthly Gross Salary payment and any amounts
contributable by the Company under paragraphs 4.5, 4.6, 4.7 and 7. Any
amount paid in excess of the maximum allowed by regulation shall be taxable
to the Employee. The Employee hereby instructs the Company to transfer to
such Fund the amount of the Employee's and the Company's contribution from
each monthly Gross Salary payment.
4.7. The Company shall obtain Disability Insurance (Ovdan
Kosher Avoda) for the exclusive benefit of the Employee and shall
contribute therefor an amount equal to two and one-half percent (2-1/2%) of
the difference between each monthly Gross Salary Payment and any amounts
contributable by the Company under paragraphs 4.5, 4.6, 4.7 and 7.
5. Expenses.
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Employee is authorized to incur reasonable expenses for
promoting the Business of ESC, including expenses for entertainment,
travel, lodging and similar items, commensurate with his status with the
Company. ESC will reimburse Employee promptly for all such expenses upon
presentation by Employee, from time to time, of an itemized account of
expenditures. Per diem allowances and xxxxx cash advances shall be in
accordance with ESC's standard policy.
6. Vacation.
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Employee shall be entitled to three (3) weeks of paid vacation
during each year that this Agreement is in effect, to be taken at times
subject to the reasonable approval of ESC. Vacation time shall not be
accumulated but Employee shall be paid for any unused vacation remaining at
the end of the year in which vacation time is accrued.
7. Automobile.
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ESC will make a 2000cc automobile available to Employee and
shall pay all reasonable and necessary expenses thereof for proper
maintenance and use, including insurance costs. The automobile shall be
owned or leased by ESC. All costs attributable to such automobile shall be
included for calculating the Gross Salary, thereby the Gross Salary shall
not be increased to represent car value.
8. Insurance.
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ESC shall maintain a life insurance policy for the benefit of
Employee's family in the amount of twice the annual Gross Salary.
9. Bonus.
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In addition to the compensation set forth above, Employee shall
be awarded an annual bonus of up to 60% of the annual Gross Salary payment
if the Company meets annual goals set forth in Schedule 9 attached hereto
for the initial 15- month of this Agreement and thereafter as set by the
Company's Board of Directors.
10. Options.
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Employee shall be granted options to purchase Ordinary Shares of the
Company in the amount of 57,510 shares at a price of $27 per share which is
equal to 100% of the fair market value at the date of this Agreement for
the first 15-month period of this Agreement ending on December 31, 1997,
and 57,510 shares for each year during the term of this Agreement at an
exercise price equaling the average closing price for the previous
September trading. The options shall be vested equally over a four-year
period.
11. Secrecy and Nondisclosure.
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The Employee shall treat as secret and confidential all of the
processes, methods, formulas, procedures, techniques, software, designs,
data, drawings and other information which are not of public knowledge or
record pertaining to ESC's Business (existing, potential and future),
including without limitation, all business information relating to
customers and suppliers and products of which the Employee becomes aware
during and as a result of his employment or association with ESC, and
Employee shall not disclose, use, publish, or in any other manner reveal,
directly or indirectly, at any time during or after the term of this
Agreement, any such processes, methods, formulas, procedures, techniques,
software, designs, data, drawings and other information pertaining to ESC's
existing or future Business or products. The Employee may disclose or use
such information, if at all, only with the prior express written consent of
ESC.
12. Non-Competition.
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12.1. Employee agrees that during the term of this Agreement
and for a period of two (2) years after he ceases to be employed by ESC he
will not, directly or indirectly, for his own account or as an employee,
officer, director, partner, joint venturer, shareholder, investor,
consultant or otherwise (except as an investor in a corporation whose stock
is publicly traded and in which Employee holds less than 5% of the
outstanding shares) interest himself in or engage in any business or
enterprise, anywhere in the world, that directly or indirectly competes
with the Business of ESC, that exists now or in the future during the term
of this Agreement or is proposed in writing by ESC prior to the time of
termination or is based on similar technology to that of ESC, provided that
any such written proposal is provided to Employee within 30 days of the
date of termination.
12.2. Employee agrees that during a period of one year from
termination of this Agreement he shall not employ directly or indirectly
any individual then employed by the Company.
12.3. Employee acknowledges that the restricted period of time
and geographical area specified under paragraph 12.1 hereof are reasonable,
in view of the nature of the business in which ESC is engaged and
Employee's knowledge of ESC's Business and products.
12.4. Notwithstanding anything contained in paragraph 12.2 to
the contrary, if the period of time or the geographical area specified
under paragraph 12.1 hereof should be determined to be unreasonable in any
judicial proceeding, then the period of time and area of the restriction
shall be reduced so that this Agreement may be enforced in such area and
during such period of time as shall be determined to be reasonable by such
judicial proceeding.
13. Development Rights.
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The Employee agrees and declares that all proprietary
information including but not limited to trade secrets and know-how,
patents and other rights in connection therewith developed by or with the
contribution of Employee's efforts during his employment or association
with ESC shall be the sole property of ESC and the Employee shall execute
all documents necessary to assign any patents to ESC and otherwise transfer
such proprietary rights to ESC.
14. Employee Representations.
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The Employee represents and warrants to ESC that the execution
and delivery of this Agreement and the fulfillment of the terms hereof, (i)
will not constitute a default under or breach of any agreement or other
instrument to which he is a party or by which he is bound, including
without limitation, any confidentiality or non-competition agreement, (ii)
do not require the consent of any person or entity, and (iii) shall not
utilize during the term of his employment any proprietary information of
any third party, including prior employers of the Employee.
15. Benefit.
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Except as otherwise herein expressly provided, this Agreement
shall inure to the benefit of and be binding upon ESC, its successors and
assigns, including, without limitation, any subsidiary or affiliated entity
and shall inure to the benefit of, and be binding upon, Employee, his
heirs, executors, administrator and legal representatives.
Notwithstanding the foregoing, the obligations of Employee
hereunder shall not be assignable or delegable.
16. Entire Agreement.
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This Agreement constitutes the entire understanding and
agreement between the parties hereto, supersedes any and all prior
discussions, agreements and correspondence with regard to the subject
matter hereof, and may not be amended, modified or supplemented in any
respect, except by a subsequent writing executed by both parties hereto.
17. Notices.
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All notices, requests and other communications to any party
hereunder shall be given or made in writing and telecopied, mailed (by
registered or certified mail) or delivered by hand to the respective party
at the address set forth in the caption of this Agreement or to such other
address (or telecopier number) as such party may hereafter specify for the
purpose of notice to the other party hereto. Each such notice, request or
other communication shall be effective (i) if given by telecopier, when
such telecopy is transmitted to the telecopier number specified herein and
the appropriate answer back is received or (ii) if given by any other
means, when delivered at the address specified herein.
18. Applicable Law.
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This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of Israel without given effect to principles
of conflicts of law and courts of Israel, District of Tel Aviv, shall have
exclusive jurisdiction over the parties hereto and subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first appearing above.
ESC MEDICAL SYSTEMS LTD.
By: _____________________________ _____________________________
Title: XXXXXX XXXXXXXX
