EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Employment Agreement (the “Agreement”) by and
between Medis Technologies Ltd., a Delaware corporation (the “Company”) with
executive offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Xxxx Xxxxx
(“Executive”)
is hereby entered into and effective as of September 19, 2008.
RECITALS
WHEREAS,
the Company wishes to employ Executive as its President and Chief Executive
Officer and Executive wishes to be employed by the Company in such capacities,
pursuant to the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
AGREEMENTS
1.
Employment and
Duties.
(a) The
Company hereby employs Executive in the positions of President and Chief
Executive Officer of the Company (and such other positions consistent with his
status as the President and Chief Executive Officer of the Company as shall be
reasonably assigned to Executive by the Company’s Board of Directors (the “Board”)). Executive
shall have all of the normal and customary responsibilities, duties and
authorities customarily accorded to, and expected of, such positions, including
those as may be established by the Board; provided that the nature of such
responsibilities, duties and authorities shall not be materially inconsistent
with Executive’s positions and duties hereunder or with those customarily
accorded to, and expected of, a chief executive officer of a company similar to
the Company. The Executive shall be included as a director nominee for the
Company’s 2009 Annual Meeting of Stockholders and the Company’s annual meetings
of stockholders thereafter through the end of the Term (as defined in Section 4
hereof), and the Executive agrees to so serve, if elected by the Stockholders of
the Company, through the end of the Term but not thereafter.
(b) Executive
hereby accepts this employment upon the terms and conditions contained herein
and agrees to devote his full business time, attention and efforts to promote
and further the business of the Company. Executive shall not, during
the Term of his employment hereunder, be engaged in any other business activity
pursued for gain, profit or other pecuniary advantage without the prior consent
of the Board. Notwithstanding the foregoing limitations, provided
that such activities neither interfere with the discharge of the duties and
responsibilities of Executive hereunder nor violate the terms of Section 3
hereof, Executive shall be able to: (i) devote occasional business time to
charitable, industry trade group and community activities and making personal
passive investments in publicly traded securities in general and in competitors
of the Company and its subsidiaries and affiliates; provided that Executive
shall not in any event own more than 2% of the issued and outstanding securities
of any such publicly traded company; and (ii) continue to serve as a member of
the Board of Directors of Pella Windows and Doors and Liberty Property Trust,
and serve on any committee thereof.
(c) The
Company shall provide to Executive offices in the City of New York, County of
New York for the performance of Executive’s services. The Company may, from time
to time, require Executive to travel in carrying out Executive’s duties pursuant
to this Agreement, including but not limited to the Company’s other offices and
facilities.
(d) Executive
faithfully shall adhere to, execute and fulfill all policies lawfully
established by the Board acting in good faith.
2.
Compensation. For
all services rendered by Executive in any capacity required hereunder, the
Company shall compensate Executive as follows:
(a) Base
Salary. During the Initial Term (as defined in Section 4
hereof), Executive shall be paid a base salary at a rate of $350,000 per year
(or pro-rated amount for any partial year during the Initial Term) (the “Base Salary”),
payable on a regular basis in accordance with the Company’s standard payroll
procedures, but not less frequently than monthly. For each successive Renewal
Term (as defined in Section 4 hereof), the Base Salary shall be reviewed by the
Board or the compensation committee thereof (the
“Compensation
Committee”) after consultation with
Executive and may be increased, as determined in good faith relying in part on
such consultation, by the Board or the Compensation Committee.
(b) Equity
Incentive Compensation.
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(i)
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Upon
the execution of this Agreement (the “Date of
Grant”), the Company will issue to the Executive options to
purchase 250,000 shares of the Company’s common stock (the “Incentive
Options”) under the Company’s 2007 Equity Incentive Plan (the
“Incentive Plan”). The Incentive Options will (1) bear an exercise price
per share equal to 100% of the closing price of the underlying shares on
the Date of Grant, (2) be exercisable for a period of 7 years from the
Date of Grant, (3) provide for vesting of 100,000 shares on the one year
anniversary of the Date of Grant, 100,000 shares on the two year
anniversary of the Date of Grant and 50,000 shares on the three year
anniversary of the Date of Grant, (4) immediately vest in full, to the
extent unvested, and be fully exercisable, upon any termination of
Executive by the Company without cause or by Executive for Good Reason (as
defined in Section 4(d) hereof), (5) be issued as incentive stock options
(as such term is defined under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”)) to the
extent permissible under applicable law and the Incentive Plan (for
example, generally, the favorable tax treatment of incentive options are
limited to $100,000 in any one year, computed by multiplying the exercise
price of an option by the number of shares vesting in that year), (6) be
subject to termination and other provisions as set forth in the Stock
Option Agreement setting forth the terms of the Incentive Options,
attached hereto as Exhibit A, and (7) otherwise have such other terms and
conditions that are no less favorable to Executive than the terms and
conditions applicable to stock options granted at or about the same time
to other senior executives or directors of the
Company.
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(ii)
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Upon
the execution of this Agreement, the Company will issue to the Executive
warrants to purchase 125,000 shares of the Company’s common stock (the
“Warrants”). The
Warrants will (1) bear an exercise price per share equal to 100% of the
closing price of the underlying shares on the Date of Grant, (2) be
exercisable for a period of 7 years from the Date of Grant, (3) provide
for vesting of 50,000 shares on the one year anniversary of the Date of
Grant, 25,000 shares on the two year anniversary of the Date of Grant and
50,000 shares on the three year anniversary of the Date of Grant, (4)
immediately vest in full, to the extent unvested, and be fully
exercisable, upon any termination of Executive by the Company without
cause or by Executive for Good Reason and (5) be subject to termination
and other provisions as set forth in the Warrant Agreement setting forth
the terms of the Warrants, attached hereto as Exhibit
B.
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(iii)
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The
Company may at any time and from time to time in its sole discretion
consider Executive for future annual or other grants of stock options,
restricted shares or other forms of equity incentive
compensation.
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(c) Vacation. Executive
shall be entitled to four (4) weeks (i.e., twenty (20) days) paid vacation per
year, pro-rated for partial years (the “Annual Vacation
Days”); provided, however, that Executive shall not be compensated for
any unused Annual Vacation Days or Carryforward Vacation Days (as defined below)
upon termination of this Agreement or Executive’s employment by the Company.
Executive shall be entitled to carry forward his unused Annual Vacation Days
from each year, but only up to the lesser of (i) thirty percent (30%) of the
Annual Vacation Days or (ii) the number of unused Annual Vacation Days from that
year (by way of illustration, if no vacation is taken in a particular
year, then 6 days will be carried forward to the next year (30% of 20 days), but
if 15 days of vacation are taken in a particular year, then 5 days will be
carried forward to the next year) (the “Carryforward Vacation
Days”).
(d) Incentive Bonus
Plan. Commencing on and for the fiscal year ending December
31, 2009 and annually thereafter until termination of this Agreement, Executive
shall be eligible to receive a fiscal year end performance bonus (the “Bonus”), which shall
constitute a wage, based upon the Company’s level of achievement of
pre-established performance goals that shall be determined by the Board and the
Compensation Committee (acting in good faith), but only after consultation with
the Executive, based on the Board approved budget for such year (excluding
extraordinary gains). Such pre-established performance goals shall be reduced to
writing and delivered to the Executive upon adoption prior to the commencement
of the fiscal year to which such pre-established performance goals relate. The Bonus, if any, will be paid to Executive in
accordance with policies established by the Board or the Compensation Committee,
from time to time, with respect to the method and timing for payment of bonuses
to executives of the Company generally, and shall be paid pro rata for partial
fiscal years.
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(e) Benefits and Other
Compensation. Executive shall be entitled to receive
additional benefits and compensation from the Company in such form and to such
extent as specified below:
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(i)
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The
Company shall include Executive as a covered insured under its Directors
and Officers insurance policy and any other liability or similar insurance
policies, if provided to other senior executives of the
Company.
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(ii)
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The
Company shall make payments aggregating $35,000 to Executive for
relocation expenses, which payments shall be payable by the Company
in three installments, as follows: (1) on December 31, 2008; $11,667.00;
(2) on March 31, 2009, $11,667.00; and (3) on June 30, 2009,
$11,666.00.
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(iii)
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Reimbursement
for all business travel and other out-of-pocket expenses actually,
reasonably and properly incurred by Executive in the performance of his
services pursuant to this Agreement. All reimbursable expenses
shall be appropriately documented in reasonable detail by Executive upon
submission of any request for reimbursement, and in a format and manner
consistent with the Company’s expense reporting policy, and shall be
reimbursed no less than on a monthly
basis.
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(iv)
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An
automobile allowance of $600.00 per month during the
Term.
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(f) Payment. Except as
otherwise provided herein, payment of all compensation and benefits to Executive
hereunder shall be made in accordance with the relevant Company policies in
effect from time to time, including normal payroll practices, and shall be
subject to all applicable employment and withholding taxes and source
deductions.
(g) Cessation of
Employment. In the event Executive shall cease to be employed
by the Company for any reason, Executive’s compensation and benefits shall cease
on the date of such event, except as otherwise provided herein.
3.
Non-Competition
Agreement.
(a) Executive
shall not, without the prior consent of the Board, during any
Term and for the Applicable Period, for himself or on behalf of, or
in conjunction with, any other person, company, partnership, corporation, entity
or business of whatever nature, either directly or indirectly:
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(i)
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engage,
as an officer, director, shareholder, member, manager, owner, partner,
joint venturer, trustee, or in a managerial capacity, whether as an
executive, independent contractor, agent, consultant or advisor, or as a
sales representative, in any business selling any products or services
that compete with the products or services offered by the Company at the
time of termination of Executive’s employment hereunder, anywhere in the
United States and in any other country in which the Company does
business;
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(ii)
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solicit
any person who is at that time, or at any time within the preceding ninety
(90) days of the time of the proposed call was, an employee of the
Company, for the purpose, or with the intent, of enticing such employee
away from, or out of, the employ of the Company or for the purpose of
hiring such employee for Executive or any other Person; provided, however,
that this Section 3(a)(ii) shall not apply to any person who independently
contacts Executive during the Applicable Period in response to a general
solicitation by a person or entity with which Executive is affiliated
published in a newspaper or other publication of general circulation that
is not specifically targeted at the Company’s employees;
or
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(iii)
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solicit
any person or entity that is at that time, or that was, at any time within
the twelve (12) months prior to that time, a customer of the Company, for
the purpose of soliciting or selling products or services in competition
with the Company.
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For the
purposes of this Agreement the term “Applicable Period”
shall mean twelve (12) months from the date Executive ceases to be an employee
of the Company, regardless of the reason for separation.
(b) Because
of the difficulty of measuring economic losses to the Company as a result of a
breach of the foregoing covenant, and because of the immediate and irreparable
damage that could be caused to the Company for which it would have no other
adequate remedy, Executive agrees that the foregoing covenant may be enforced by
the Company in the event of breach by him, by injunctions and restraining
orders, without the necessity of posting a bond or other security.
(c) It is
agreed by the parties that the foregoing covenants in this Section 3 impose a
reasonable restraint on Executive in light of the activities, business and plans
of the Company on the date of the execution of this Agreement, and Executive’s
compensation hereunder, in part, constitutes consideration for this covenant;
but it is also the intent of the Company and Executive that such covenants be
construed and enforced in accordance with any change in the activities, business
or plans of the Company throughout the term of this Agreement.
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(d) The
covenants in this Section 3 are severable and separate, and the unenforceability
of any specific covenant or part thereof shall not affect the remainder of such
covenant or provisions of any other covenant.
(e) All of
the covenants in this Section 3 shall be construed as an agreement independent
of any other provision in this Agreement, and the existence of any claim or
cause of action of Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement of
such covenants; provided that the Company is not in breach of any obligation
with respect to the payment of Severance (as defined in Section 4(e) hereof) and
the Company’s breach of such obligation is a result of circumstances other than
Executive’s breach of Section 3 or Section 6 hereof.
(f) Notwithstanding
any of the foregoing, if any applicable law shall reduce the time period or
scope during which Executive shall be prohibited from engaging in any
competitive activity described in Section 3(a) hereof, the period of time or
scope for which Executive shall be prohibited pursuant to Section 3(a) hereof
shall be the maximum time or scope permitted by law.
4.
Term; Termination; Rights on
Termination. The term of this Agreement shall begin on the
date hereof and shall continue until December 31, 2011 (the “Initial Term”) and,
unless terminated as herein provided, shall be automatically renewed at the end
of the Initial Term for a period of one (1) year and thereafter for successive
one (1) year terms (each such one (1) year term, a “Renewal Term”), on
the same terms and conditions contained herein with such changes, additions,
deletions or modifications as may be agreed to in writing by Executive and the
Company (the Initial Term and each Renewal Term, each a “Term”), until either
party notifies the other party in writing at least one hundred twenty (120) days
prior to the expiration of the then current Term that he or it does not want the
Term to so renew. It is acknowledged and understood that this Agreement shall
remain in full force and effect during any notice period until the actual
termination date hereof, subject to the terms hereof. This Agreement and
Executive’s employment may be terminated in any one of the following
ways:
(a) Death. Executive’s
employment hereunder shall immediately terminate upon his death, and the Company
shall pay to Executive’s estate (i) all Base Salary earned as of the date of his
death but unpaid, (ii) Bonus amounts, if any, earned as of the date of his death
but unpaid and (iii) all other unpaid benefits from the period prior to the date
of his death.
(b) Disability. If, as
a result of the Executive’s incapacity due to physical or mental illness, the
Executive shall not have performed his duties hereunder on a full-time basis for
three (3) consecutive months or for one hundred twenty (120) days in any twelve
(12) month period, the Executive’s employment under this Agreement may be
terminated by the Company upon ten (10) days written notice if Executive is
unable to resume his full time duties at the conclusion of such notice
period. The Executive’s compensation during any period of disability
prior to the effective date of such termination shall be the amounts normally
payable to him in accordance with his then current annual Base Salary, reduced
by the amounts of disability pay, if any, paid to the Executive under any
Company disability program. The Executive shall not be entitled to any further
salary or other compensation from the Company for any period subsequent to the
effective date of such termination, except for (i) all Base Salary earned as of
the date of such termination but unpaid, (ii) Bonus amounts, if any, earned as
of the date of his termination but unpaid, (iii) all other unpaid benefits from
the period prior to the date of such termination, and (iv) any other pay and
benefits, if any, in accordance with then existing severance policies of the
Company and Company benefit plans.
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(c) Termination by
Company.
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(i)
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For
Cause. The Company may terminate the Agreement
immediately upon written notice to Executive for cause, which shall mean:
(1) Executive’s willful misconduct or gross negligence in the performance
or nonperformance of any of Executive’s material duties and
responsibilities hereunder; (2) Executive’s continued and willful refusal
promptly to follow any lawful direction of the Board, provided that if the
Executive disagrees in good faith with such lawful direction in writing
within a reasonable period of time after such lawful direction is given,
then the Board and the Executive shall in good faith discuss such
disagreement and attempt to resolve same within a reasonable period of
time based on the facts and circumstances of the disagreement, provided
further that if such disagreement is not so resolved, the Executive shall
promptly follow and comply with such lawful direction of the Board; (3)
Executive’s willful misconduct or gross negligence in the performance or
intentional nonperformance of his duties and responsibilities (regardless
of materiality) under this Agreement, which in the aggregate, constitute a
material nonperformance hereunder; (4) Executive’s willful
misrepresentation, fraud, illegal drug abuse, or misconduct with respect
to the business or affairs of the Company, which materially and adversely
affects, or can reasonably be expected so to affect, the operations,
prospects or reputation of the Company; (5) Executive’s conviction of or
plea of nolo contendere to a
felony or other crime involving moral turpitude; (6) Executive’s material
breach of any fiduciary duty owed to the Company or breach of the
provisions of Section 3 or Section 6 hereof, which breach is not cured
within ten (10) days of written notice to Executive or is incapable of
cure; (7) any other willful and material breach by Executive of this
Agreement that is not cured within ten (10) days of written notice to
Executive or is incapable of cure; or (8) any other errors, acts or
omissions or any other reason which
constitutes termination for cause
under applicable law. In the event of a termination for cause, as contemplated in this subsection 4(c)(i),
the Company shall have no further obligation to make any payments to
Executive or to provide any other benefits to him hereunder except for any
Base Salary, reimbursement or other benefits that have accrued or vested
but not been paid as of the effective date of such
termination.
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(ii)
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Without Cause. The
Company may at any time during any Term terminate this Agreement, if such
termination is approved by the Board. In the event of a
termination by the Company without cause, or upon the failure by the
Company to agree to renew the Term pursuant to Section 4 hereof and the
Executive in good faith wishes to renew such Term, the Company’s
obligations hereunder shall be as follows: (1) paying Severance to
Executive in accordance with subsection
4(e) hereof; (2) paying a pro rata Bonus for the year of such
termination; and (3) providing to
Executive any other benefits hereunder that have accrued or vested but
have not been paid as of the effective date of such
termination. The payments hereunder shall be made as and when
such payments would have been made had Executive’s employment not have
terminated hereunder. The Company’s
obligation to pay the amount referred to in subsection 4(c)(ii)(1) shall be subject to Executive’s duty to mitigate
his damages following the date on which this Agreement is terminated in
accordance with this subsection 4(c)(ii). Except as provided
herein, all other obligations of the Company under this Agreement shall
cease as of the date of termination. The
payments and other benefits due to Executive hereunder shall be inclusive
of all statutory or other legal severance entitlements of
Executive.
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(d) Termination by
Executive. Executive may at any time during the Term terminate
his employment hereunder (i) upon One Hundred Twenty (120) days prior written
notice to the Company for any reason other than for Good Reason or (ii) for Good
Reason. For purposes of this Agreement, “Good Reason” means the
occurrence of any one or more of the following events unless Executive
specifically agrees in writing by the Company and the Executive that such event
shall not be Good Reason: (A) any material breach of this Agreement by the
Company; provided, however, that no such material breach described in this
subsection shall constitute Good Reason unless Executive gives the Company ten
(10) days’ prior written notice of such act or omission and the Company fails to
cure such act or omission within the ten (10) day period after delivery of such
notice (except that Executive shall not be required to provide such notice in
case of intentional acts or omissions by the Company or more than once in cases
of repeated acts or omissions); or (B) the failure of the Company to assign this
Agreement to a successor to the Company or failure of a successor to the Company
to explicitly assume and agree to be bound by this Agreement.
(e) Severance. If
Executive’s employment is terminated by the Company pursuant to Section 4(c)(ii)
or by Executive for Good Reason, the Company shall, subject to Executive’s
execution of a release, whereby the Executive releases the Company from all
statutory and other claims or rights that Executive may have against the
Company and its current and former
officers, directors, and employees, including, but not limited to, all
statutory claims
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or rights relating to Executive’s employment
and/or termination (but excluding any claims or rights relating to the Company's
obligations to pay Executive Severance due and owing to him hereunder), in a
form reasonably acceptable to the Company (a “Release”), continue to pay
Executive his then current Base Salary (the “Severance”) for a period of twelve
(12) months (the “Severance Period”). The Severance is expressly
understood and agreed not to be salary or payroll compensation to an Executive,
but rather, severance to a former Executive. Notwithstanding anything herein to
the contrary, if Executive has breached a provision of Section 6 of this
Agreement, or has breached a provision of Section 3 or Section 5 of this
Agreement and Executive has failed to cure such breach within ten (10) days of
notice from the Company describing such breach in reasonable detail, then the
Severance payments shall terminate immediately. In the event Executive executes a
Release in accordance with this Section 4(e), the Company shall execute a
release, whereby the Company releases the Executive from all statutory and other
claims or rights that the Company may have against the Executive; provided that
such release shall immediately and with no further action on the part of either
party be of no force and effect, and shall be null and void, if following the
Executive’s termination of employment circumstances arise or are discovered with
respect to the Executive that would have constituted cause for termination of
employment hereunder.
(f) Deferral of Payments Necessary to
Avoid Taxation Under Code Section 409A. The intent of the
parties is that payments and benefits under this Agreement comply with Section
409A of the Internal Revenue Code of 1986, as amended, and the regulations and
guidance promulgated thereunder (collectively “Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement will be interpreted
to be in compliance therewith. Notwithstanding any provision to the contrary in
this Agreement, to the extent that the Executive is a “specified employee”
within the meaning of that term under Section 409A(a)(2)(B) of the Code, then
with regard to any payment or the provision of any benefit that is required to
be delayed in compliance with Section 409A(a)(2)(B) of the Code, such payment or
benefit will not be made or provided prior to the earlier of (i) the expiration
of the six-month period measured from the date of the Executive’s “separation
from service” (as such term is defined under Section 409A) or (ii) the date of
the Executive’s death (the “Delay Period”). Upon
the expiration of the Delay Period, all payments and benefits delayed pursuant
to this Section 4(f) (whether they would have otherwise been payable in a single
sum or in installments in the absence of such delay) will be paid or reimbursed
to the Executive in a lump sum, and any remaining payments and benefits due
under this Agreement will be paid or provided in accordance with the normal
payment dates specified for them herein. Notwithstanding the foregoing, to the
extent that the foregoing applies to the provision of any ongoing welfare
benefits to the Executive that would not be required to be delayed if the
premiums therefore were paid by the Executive, the Executive will pay the full
cost of premiums for such welfare benefits during the Delay Period and the
Company will pay the Executive an amount equal to the amount of such premiums
paid by the Executive during the Delay Period promptly after its
conclusion.
5.
Inventions. Executive
shall disclose promptly to the Company any and all significant conceptions and
ideas for inventions, improvements and valuable discoveries, whether patentable
or not, that have been conceived or made prior to
the date hereof or that are conceived or made by Executive following the date hereof, solely or jointly
with another, during any Term and that are
directly related to the business or activities of the Company whether or not
conceived during or after regular business hours or using any property or
facilities of the
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Company. Executive
hereby assigns and agrees to assign all of his right, title and interest in and to any such
intellectual property to the Company or its nominee and Executive hereby expressly waives any and all moral
rights he may have in or in relation to such intellectual
property. Executive covenants and agrees to sign all such documents,
instruments or agreements and to perform all such acts or otherwise assist the
Company as are reasonably necessary in order to perfect and give effect to the
foregoing assignment of intellectual property rights and, to the extent
applicable, waiver of moral rights therein. Executive agrees
that all such materials that he develops or conceives and/or documents related
thereto during such period shall be deemed works made-for-hire for the Company
within the meaning of the copyright laws of the United States or any similar or
analogous law or statute of any other jurisdiction, and accordingly, the Company
shall be the sole and exclusive owner for all purposes for the distribution,
exhibition, advertising and exploitation of such materials or any part of them
in all media and by all means now known or that may hereafter be devised,
throughout the universe in perpetuity. Executive agrees that in
furtherance of the foregoing, he shall disclose, deliver and assign to the
Company all such conceptions, ideas, improvements and discoveries and shall
execute all such documents, including patent, trademark and copyright
applications, as the Company reasonably shall deem necessary to further document
the Company’s ownership rights therein and to provide the Company the full and
complete benefit thereof. Should any arbitrator or court of competent
jurisdiction ever hold that such materials do not constitute works
made-for-hire, Executive hereby irrevocably assigns to the Company, and agrees
that the Company shall be the sole and exclusive owner of, all right, title and
interest in and to all such materials, including the patents, trademarks,
copyrights and any other proprietary rights arising
therefrom. Executive reserves no rights with respect to any such
materials, and hereby acknowledges the adequacy and sufficiency of the
compensation paid and to be paid by the Company to Executive for the materials
and the contributions he will make to the development of any such information or
materials. Executive agrees to cooperate with all lawful efforts of
the Company to protect the Company’s rights in and to any or all of such
information and materials and will, at the request of the Company, execute any
and all instruments or documents reasonably necessary or desirable in order to
register, establish, acquire, prosecute, maintain, perfect or defend the
Company’s rights in and to such information and materials.
6.
Confidential Information and
Trade Secrets. Executive acknowledges and agrees that all
Confidential Information, Trade Secrets and other property delivered to, or
compiled by, Executive by or on behalf of the Company or its representatives,
vendors or customers that pertain to the business of the Company shall be, and
remain, the property of the Company and be subject at all times to its
discretion and control. Executive agrees that he shall maintain
strictly the confidentiality of, and shall not disclose any such Confidential
Information or Trade Secrets to any person without
the prior written consent of the Board.
For
purposes hereof, the parties agree that “Confidential
Information” means and includes:
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All
business or financial information, plans, processes and strategies, market
research and analyses, projections, financing arrangements, franchising
arrangements and agreements, consulting and sales methods and techniques,
expansion plans, forecasts and forecast assumptions, business practices,
operations and procedures, marketing and merchandising information,
distribution techniques, customer information and other business
information, including records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other documentation
respecting the Company;
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All
information and materials that are proprietary and confidential to a third
party and that have been provided to the Company by such third party for
the Company’s use; and
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All
information derived from such Confidential
Information.
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Confidential
Information shall not include information and materials that are (i) already, or
otherwise become, known by, or generally available to, Executive or the public,
other than as a result of an act or omission by the Executive in breach of the
provisions of this Agreement or any other applicable agreement between the
Executive and the Company or by another party in violation of an obligation of
confidentiality to the Company; (ii) required to be disclosed for Executive
not to be in violation of any applicable law or regulation; (iii) required
to be disclosed by Executive in connection with the enforcement of any of his
rights under this Agreement or any other agreements between Executive and the
Company; or (iv) required to be disclosed pursuant to an order of, or are
necessary to be disclosed in connection with any litigation or other proceeding
in which testimony is compelled before, any court or like entity or governmental
authority; provided that in any such case, Executive shall provide the Company
with prompt notice of such request, order or intended disclosure, cooperate
reasonably with the Company in resisting or limiting, as appropriate, the
disclosure of such Confidential Information via a protective order or other
appropriate legal action, and shall not make disclosure pursuant thereto until
the Company has had a reasonable opportunity to resist such disclosure, unless
he is ordered otherwise pursuant to an order of a court of competent
jurisdiction or he is advised by his counsel that such disclosure must be made
at such time to avoid any legal penalty.
For
purposes hereof, the term “Trade Secret” shall
mean trade secrets of the Company, including, without limitation, the whole or
any portion or phase of any scientific or technical information, design,
process, formula, concept, data organization, manual, other system
documentation, or any improvement of any thereof, in any case that is valuable
and secret (in the sense that it is not generally known to the Company’s
competitors).
7.
Return of Company Property;
Termination of Employment. At such time as Executive’s
employment with the Company is terminated for any reason under Sections 4(b),
4(c) or 4(d) hereof, he shall be required to participate in an exit interview
for the purpose of assuring a proper termination of his employment and his
obligations hereunder. On or before the actual date of any
termination, Executive or his representatives shall return to the Company all of
the Company’s records, materials and other physical objects obtained during his
employment with the Company, including, without limitation, all Company credit
cards and access keys and all materials, containing or derived from any Trade
Secrets or Confidential Information.
8.
No Prior
Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Executive agrees to indemnify the Company for, and
hold the Company harmless from, and against, all claims by any third party that
such third party may now have, or may hereafter come to have, against the
Company based upon, or arising out of, any violation of breach or any
noncompetition, invention or secrecy agreement between Executive and such third
party that was in existence as of the date of this Agreement, and all other
expenses directly related thereto incurred by the Company, including, but not
limited to, reasonable attorneys’ fees and expenses and expenses of
investigation.
11
9.
Non-disparagement. The
Parties agree that, other than in connection with any lawsuit, arbitration or
other proceeding arising from or relating to this Agreement, (a) Executive will
not denigrate, disparage, criticize, or make any negative statements concerning
the Company or its affiliates or any of their respective officers, directors or
employees and (b) the Company will not denigrate, disparage, criticize, or make
any negative statements concerning Executive.
10.
Binding Effect;
Assignment. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors and assigns. Executive understands
that he has been selected for employment by the Company on the basis of his
personal qualifications, experience and skills. Executive agrees,
therefore, that he cannot assign all or any portion of his performance
obligations under this Agreement.
11.
Complete
Agreement. Executive has no oral representations,
understandings or agreements with the Company or any of its affiliates or any of
its officers, directors or representatives covering the same subject matter as
this Agreement and the Exhibits hereto. This written Agreement and the Exhibits
hereto are the final, complete and exclusive statement and expression of the
agreement between the Company and Executive regarding the subject matter
contained herein and therein and of all the terms of this Agreement and the
Exhibits, it cannot be varied, contradicted or supplemented by evidence of any
prior or contemporaneous oral or written agreements and any such prior
agreements are hereby superseded by this Agreement.
12.
Notices.
(a) Any notice, designation, communication, request, demand
or other document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be sufficiently given or sent or delivered if
it is:
|
(i)
|
delivered personally to the Executive or, in the
case of the Company, to the address and person noted
below,
|
|
(ii)
|
sent to the party entitled to receive it by
registered mail, postage prepaid, mailed in the United States,
|
|
(iii)
|
sent by facsimile
machine.
|
(b) Notices shall be sent to the following addresses or
facsimile numbers:
|
(i)
|
in the case of the
Executive,
|
|
Xxxx
Xxxxx
000
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
|
12
|
(ii)
|
in the case of the
Company,
|
|
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Board of
Directors
Facsimile: (000)
000-0000
with
a copy to,
Xxxxxxx,
Xxxxxxxxx LLP
0
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx X. Xxx, Esq.
Facsimile:
(000) 000-0000
|
or to such other address or facsimile number as the
party entitled to or receiving such notice, designation, communication, request,
demand or other document shall, by a notice given in accordance with this
section, have communicated to the party giving or sending or delivering such
notice, designation, communication, request, demand or other
document.
(c) Any notice, designation, communication, request, demand
or other document given or sent or delivered as aforesaid
shall:
|
(i)
|
if delivered as aforesaid, be deemed to have been
given, sent, delivered and received on the date of
delivery;
|
|
(ii)
|
if sent by mail as aforesaid, be deemed to have
been given, sent, delivered and received (but not actually received) on
the third business day following the date of mailing;
and
|
|
(iii)
|
if sent by facsimile machine, be deemed to have
been given, sent, delivered and received on the date the sender receives
the facsimile answer back confirming receipt by the
recipient.
|
13.
Severability;
Pleadings. It is the intention of the parties that the
provisions hereof shall be enforceable to the fullest extent permitted under
applicable law, and that the unenforceability of any provision hereof, or any
portion thereof, shall not render unenforceable or otherwise impair any other
provisions or portions thereof. If any provision of this Agreement is
determined by a court of competent jurisdiction to be unenforceable, void or
invalid in whole or in part, this Agreement shall be deemed amended to delete or
modify, as necessary, the offending provisions or portions thereof and to alter
the bounds thereof, including specifically, any time, place and manner
restrictions contained in any of the restrictive covenants contained herein, in
order to render it valid and enforceable. In any event, the balance
of this Agreement shall be enforced to the fullest extent possible without
regard to such unenforceable, void or
13
invalid
provisions or part thereof. The Section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of the Agreement or of any part hereof.
14.
Company
Actions. Executive acknowledges that, except as provided in
Section 3(e) hereof, in any action by the Company to enforce the provisions of
this Agreement, claims asserted by Executive against the Company arising out of
his employment with the Company or otherwise shall not constitute a defense to
enforcement of his obligations hereunder.
15.
Governing Law and
Forum. This Agreement shall in all respects be construed
according to the laws of the State of New York, without regard to its choice of
law principle (other than Section 5-1401 of the General Obligations Law of the
State of New York). The Company and the Executive agree that any claims
concerning the rights and obligations of the parties or any other issue arising
under this Agreement shall be brought in New York Supreme Court, County of New
York, or the United States District Court for the Southern District of New York,
and that such courts shall have exclusive jurisdiction over litigation involving
any such claims. The Company and the Executive agree to submit to the
jurisdiction of such courts and that they will not raise lack of personal
jurisdiction or inconvenient forum as defenses in any such
litigation.
16.
Counterparts. This
Agreement may be executed in counterparts and any party hereto may execute any
such counterpart, each of which when executed and delivered shall be deemed to
be an original and all of which counterparts taken together shall constitute but
one and the same instrument. This Agreement shall become binding when
all counterparts taken together shall have been executed and delivered (which
deliveries may be by facsimile) by the parties.
17.
Modifications. This
Agreement may not be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought, or his or its duly
authorized representative or officer. No waiver by Executive or the
Company of any breach of any provision hereof will be deemed a waiver of any
prior or subsequent breach of the same or any other provision. The
failure of Executive or the Company to exercise any right provided herein will
not be deemed on any subsequent occasions to be a waiver of any right granted
hereunder to either of them.
18.
Survival. The provisions of Sections 3, 4(e), 4(f),
5, 6, 7, 8 and 9 hereof shall survive termination of this Agreement for any
reason.
19.
EXECUTIVE
ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE WAS GIVEN AN OPPORTUNITY TO
READ IT, CAREFULLY EVALUATE IT, AND ASK ANY QUESTIONS HE MAY HAVE HAD REGARDING
IT OR ITS PROVISIONS. EXECUTIVE ALSO ACKNOWLEDGES THAT HE HAD THE RIGHT TO HAVE
THIS AGREEMENT REVIEWED BY INDEPENDENT LEGAL COUNSEL OF HIS CHOOSING AND THAT
THE COMPANY GAVE HIM A REASONABLE PERIOD OF TIME TO DO SO IF HE SO
WISHED. EXECUTIVE FURTHER ACKNOWLEDGES THAT HE IS NOT BOUND BY ANY
AGREEMENT THAT WOULD PREVENT HIM FROM PERFORMING HIS DUTIES AS SET FORTH HEREIN,
NOR DOES HE KNOW OF ANY OTHER REASON WHY HE WOULD NOT BE ABLE TO PERFORM HIS
DUTIES AS SET FORTH HEREIN.
[SIGNATURES
APPEAR ON NEXT PAGE]
14
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as
of the day and year first above written.
| COMPANY: | |||
| MEDIS TECHNOLOGIES LTD. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |||
| Title: Chairman | |||
| EXECUTIVE: | |||
| /s/ Xxxx Xxxxx | |||
| Xxxx Xxxxx | |||
15
EXHIBIT
A
OPTION
AGREEMENT
2007 EQUITY INCENTIVE
PLAN
STOCK OPTION
AGREEMENT
AGREEMENT,
dated as of September 19, 2008, between Medis Technologies Ltd., a Delaware
corporation (the “Company”), and Xxxx Xxxxx (the “Grantee”).
W
I T N E S S E T H:
WHEREAS,
as of April 18, 2007, the Company adopted the Medis Technologies Ltd. 2007
Equity Incentive Plan, as amended on August 11, 2008 (the “Plan”), which Plan
authorizes, among other things, the grant of options to purchase shares of
common stock, $.01 par value per share (“Common Stock”), of the Company to
directors, officers and employees of the Company and to other
individuals;
WHEREAS,
on the date hereof, the Grantee and the Company entered into an Employment
Agreement (as amended, restated, modified or replaced, the “Employment
Agreement”) pursuant to which, among other things, the Company agreed to grant
to Grantee the option documented herein; and
WHEREAS,
the Company’s Compensation Committee, as administrator of the Plan, has
determined that it would be in the best interests of the Company to grant the
option documented herein.
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1
Definitions. Capitalized
terms not defined in this Agreement shall have the meaning ascribed to such
terms in the Plan.
2
Grant of Option.
Subject to the terms and conditions of the Plan and as set forth herein, the
Company hereby grants to the Grantee, as of date hereof, an option (the
“Option”) to purchase from the Company all or any part of an aggregate number of
250,000 shares of Common Stock (the “Optioned Shares”)
3
Vesting. Subject to
such further limitations or conditions as are provided in the Plan and as set
forth herein, the Option shall become exercisable at a per share price of $2.38
(“Exercise Price”), the Grantee having the right hereunder to purchase from the
Company the indicated number of Optioned Shares upon exercise of the Option, on
and after such dates, in cumulative fashion:
| Vesting Date |
Non−Qualified Stock
Options
|
Incentive Stock
Options
|
102 Capital Gains Track Option
Award (with Trustee) (Israel)
|
102
Ordinary Income Track Option Award (with Trustee) (Israel)
|
102
Non-Trustee Option Award (Israel)
|
3(9) Option Award
(Israel)
|
|||||||
|
September
19, 2009
September
19, 2010
September
19, 2011
|
---
---
---
|
100,000
100,000
50,000
|
---
---
---
|
---
---
---
|
---
---
---
|
---
---
---
|
Only
those Optioned Shares indicated above as “Incentive Stock Options” are intended
by the parties hereto to be, and be treated as, “incentive stock options” (as
such term is defined under Section 422 of the Code). Notwithstanding the
foregoing grant of Incentive Stock Options, to the extent that the aggregate
Fair Market Value of Optioned Shares with respect to which the Incentive Stock
Options are exercisable for the first time by the Grantee during any calendar
years exceeds one hundred thousand dollars ($100,000), such Options shall be
treated as Nonqualified Stock Options. The Option may not be exercised with
respect to less than 100 Optioned Shares (or the Optioned Shares then subject to
purchase under the Option, if less than 100 shares) or for any fractional
shares.
4
Termination of
Option. (a) The Option, to the extent not previously
exercised, shall terminate and become null and void on September 19, 2015 (the
“Option Expiration Date”).
(b) Subject
to the provisions of Section 5 hereof, and except as otherwise provided in this
Section 4, upon the Grantee’s ceasing for any reason to be employed by the
Company or a Subsidiary pursuant to the terms of the Employment Agreement or
otherwise (such occurrence being a “termination of the Grantee’s employment”),
the Option, to the extent not previously exercised, shall terminate and become
null and void twelve (12) months after such termination of the Grantee’s
employment, or upon the Option Expiration Date, whichever occurs
first.
(c) Upon a
termination of the Grantee’s employment for Cause or if following the Grantee’s
termination of employment, circumstances arise or are discovered with respect to
the Grantee that would have constituted Cause for termination of employment, the
Option, to the extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee’s employment (or when
such circumstances arise or are discovered).
(d) Subject
to the provisions of Section 5 hereof, and except as otherwise provided in this
Section 4 (other than Section 4(b)), upon a termination of the Grantee’s
employment by reason of permanent disability (within the meaning of Section
22(e)(3) of the Code) or by reason of the death of the Grantee, the Option, to
the extent not previously exercised, shall terminate and become null and void
twelve (12) months after such termination of the Grantee’s employment, or upon
the Option Expiration Date, whichever occurs first.
5
Exercisability.
(a) Upon a termination of the Grantee’s employment for any reason,
pursuant to the terms of the Employment Agreement or otherwise, the Option shall
be exercisable only to the extent that the Option is vested and is in effect on
the date of such termination of the Grantee’s employment. Notwithstanding the
foregoing, the Option shall immediately vest in full, to the extent unvested,
and be fully exercisable to the extent unexercised, upon any termination of
Grantee’s employment by the Company without Cause or by Executive for Good
Reason (as defined in the Employment Agreement).
2
(b) To the
extent exercisable, the Option may be exercised by a legal representative on
behalf of the Grantee in the event of such permanent disability, or, in the case
of the death of the Grantee, by the estate of the Grantee or by any person or
persons who acquired the right to exercise the Option by bequest or inheritance
or by reason of the death of the Grantee.
6
Manner of Exercise.
(a) The Option may be exercised in full at one time or in part from
time to time for the number of Optioned Shares then exercisable by giving
written notice, signed by the person exercising the Option, to the Company,
stating the number of Optioned Shares with respect to which the Option is being
exercised and the date of exercise thereof, which date shall be at least five
days after the giving of such notice.
(b) Full
payment by the Grantee of the Exercise Price for the Optioned Shares purchased
shall be made on or before the exercise date specified in the notice of exercise
by delivery of (i) cash or a check payable to the order of the Company in an
amount equal to such Exercise Price, (ii) shares of Common Stock owned by the
Grantee having a Fair Market Value equal in amount to such Exercise Price, or
(iii) any combination of the preceding clauses (i) and (ii).
(c) The
Company shall be under no obligation to issue any Optioned Shares unless the
person exercising the Option, in whole or in part, shall give a written
representation and undertaking to the Company which is satisfactory in form and
substance to counsel for the Company and upon which, in the opinion of such
counsel, the Company may reasonably rely, that he or she is acquiring such
Optioned Shares for his or her own account as an investment and not with a view
to, or for sale in connection with, the distribution of any such Optioned
Shares, and that he or she will make no transfer of the same except in
compliance with any rules and regulations in force at the time of such transfer
under the Securities Act of 1933, or any other applicable law.
(d) Upon
exercise of the Option in the manner prescribed by this Section 6, delivery of a
certificate for the Optioned Shares then being purchased shall be made at the
principal office of the Company to the person exercising the Option within a
reasonable time after the date of exercise specified in the notice of
exercise.
7
Non−Transferability of
Option. The Option shall not be assignable or transferable by the Grantee
other than by will or the laws of descent and distribution, and shall be
exercisable during the lifetime of the Grantee only by the Grantee. The Option
shall terminate and become null and void immediately upon the bankruptcy of the
Grantee, or upon any attempted assignment or transfer except as herein provided,
including without limitation, any purported assignment, whether voluntary or by
operation of law, pledge, hypothecation or other disposition, attachment,
trustee process or similar process, whether legal or equitable, upon the
Option.
8
No Special Employment
Rights. Neither the granting of the Option nor its exercise shall be
construed to confer upon the Grantee any right with respect to the continuation
of his or her employment by the Company (or any subsidiary of the Company) or
interfere in any way with the right of the Company (or any subsidiary of the
Company), subject to the terms of the Employment Agreement to the contrary, at
any time to terminate such employment or to increase or decrease the
compensation of the Grantee from the rate in existence as of the date
hereof.
3
9
Tax
Consequences. (a) All tax consequences under any
Applicable Law which may arise from the grant of this Option or the exercise
thereof, the sale or disposition of any Optioned Shares granted hereunder or
issued upon exercise of this Option or from any other action of the Grantee in
connection with the foregoing shall be borne and paid solely by the Grantee, and
the Grantee shall indemnify the Company, and its Subsidiaries and Affiliates,
and shall hold them harmless against and from any liability for any such tax or
penalty, interest or indexation thereon. The Grantee agrees to, and undertakes
to comply with, any ruling, settlement, closing agreement or other similar
agreement or arrangement with any tax authority in connection with the foregoing
which is approved by the Company. The Grantee is advised to consult
with a tax advisor with respect to the tax consequences of receiving or
exercising this Option. The Company does not assume any
responsibility to advise the Grantee on such matters, which shall remain solely
the responsibility of the Grantee.
(b) The
Grantee shall notify the Company in writing promptly and in any event within ten
(10) days after the date on which the Grantee first obtains knowledge of any tax
bureau inquiry, audit, assertion, determination, investigation, or question
relating in any manner to the Option granted or received hereunder or Optioned
Shares issued thereunder and shall continuously inform the Company of any
developments, proceedings, discussions and negotiations relating to such matter,
and shall allow the Company and its representatives to participate in any
proceedings and discussions concerning such matters. Upon request, the Grantee
shall provide to the Company any information or document relating to any matter
described in the preceding sentence, which the Company, in its discretion,
requires.
10
No Rights of
Stockholder. The Grantee shall not be deemed for any purpose to be a
stockholder of the Company with respect to the Option except to the extent that
the Option shall have been exercised with respect thereto and, in addition, a
stock certificate shall have been issued theretofore and delivered to the
Grantee.
11
Amendment. Subject to
the terms and conditions of the Plan, the Board or a committee appointed by the
Board to administer the Plan (the “Committee”), whichever shall then have
authority to administer the Plan, may amend this Agreement with the consent of
the Grantee when and subject to such conditions as are deemed to be in the best
interests of the Company and in accordance with the purposes of the
Plan.
12
Notices. Any
communication or notice required or permitted to be given hereunder shall be in
writing, and, if to the Company, to its principal place of business, attention:
Secretary, and, if to the Grantee, to the address as appearing on the records of
the Company. Such communication or notice shall be deemed given if and when (a)
properly addressed and posted by registered or certified mail, postage prepaid,
or (b) delivered by hand.
13
Incorporation of Plan by
Reference. The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the Option shall in all
respects be interpreted in accordance with the Plan. In the event of any
inconsistency between the Plan and this Agreement, the Plan shall govern. The
Board or the Committee, whichever
4
shall
then have authority to administer the Plan, shall interpret and construe the
Plan and this Agreement, and their interpretations and determinations shall be
conclusive and binding upon the parties hereto and any other person claiming an
interest hereunder, with respect to any issue arising hereunder or
thereunder.
14
Acknowledgement. The
Grantee acknowledges receipt of the copy of the Plan attached hereto as Exhibit
A.
15
Governing Law. The
validity, construction and interpretation of this Agreement shall be governed by
and determined in accordance with the laws of the State of New
York.
[SIGNATURES
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5
IN
WITNESS WHEREOF, the undersigned have executed this Option Agreement as of the
date above written.
| MEDIS TECHNOLOGIES LTD. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |||
| Title: Chairman | |||
| GRANTEE: | |||
| /s/ Xxxx Xxxxx | |||
| Name: Xxxx Xxxxx | |||
6
Exhibit
A
2007 Equity Incentive
Plan
7
Exhibit
B
WARRANT
AGREEMENT
Exhibit
B
WARRANT
AGREEMENT
WARRANT
AGREEMENT, dated as of September 19, 2008, between Medis Technologies Ltd., a
Delaware corporation (the “Company”), and Xxxx Xxxxx (the
“Grantee”).
W
I T N E S S E T H:
WHEREAS,
on the date hereof, the Grantee and the Company entered into an Employment
Agreement (as amended, restated, modified or replaced, the “Employment
Agreement”) pursuant to which, among other things, the Company agreed to grant
to Grantee the warrant documented herein; and
WHEREAS,
the Company’s Compensation Committee (the “Committee”) has determined that it
would be in the best interests of the Company to grant the warrant documented
herein.
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1 Grant of Warrant.
Subject to the terms and conditions as set forth herein, the Company hereby
grants to the Grantee, as of date hereof, a warrant (the “Warrant”) to purchase
from the Company all or any part of an aggregate number of 125,000 shares of
common stock, $.01 par value per share (“Common Stock”), of the Company (the
“Warrant Shares”).
2
Vesting. Subject to
such further limitations or conditions as set forth herein, the Warrant shall
become exercisable at a per share price of $2.38 (“Exercise Price”), the Grantee
having the right hereunder to purchase from the Company the indicated number of
Warrant Shares upon exercise of the Warrant, on and after such dates, in
cumulative fashion:
|
Vesting
Date
|
Number
of Warrant Shares
|
|||||||
|
September
19, 2009
|
50,000
|
|||||||
|
September
19, 2010
|
25,000
|
|||||||
|
September
19, 2011
|
50,000
|
The
Warrant may not be exercised with respect to less than 100 Warrant Shares (or
the Warrant Shares then subject to purchase under the Warrant, if less than 100
shares) or for any fractional shares.
3 Termination of
Warrant. (a) The Warrant, to the extent not previously
exercised, shall terminate and become null and void on September 19, 2015 (the
“Warrant Expiration Date”).
(b) Subject
to the provisions of Section 4 hereof, and except as otherwise provided in this
Section 3, upon the Grantee’s ceasing for any reason to be employed by the
Company or a subsidiary thereof pursuant to the terms of the Employment
Agreement or otherwise (such occurrence being a “termination of the Grantee’s
employment”), the Warrant, to the extent not previously exercised, shall
terminate and become null and void twelve (12) months after such termination of
the Grantee’s employment, or upon the Warrant Expiration Date, whichever occurs
first.
(c) Upon a
termination of the Grantee’s employment for Cause (as defined in the Company’s
2007 Equity Incentive Plan, as amended (the “Plan”)) or if following the
Grantee’s termination of employment, circumstances arise or are discovered with
respect to the Grantee that would have constituted Cause for termination of
employment, the Warrant, to the extent not previously exercised, shall terminate
and become null and void immediately upon such termination of the Grantee’s
employment (or when such circumstances arise or are discovered).
(d) Subject
to the provisions of Section 4 hereof, and except as otherwise provided in this
Section 3 (other than Section 3(b)), upon a termination of the Grantee’s
employment by reason of permanent disability (within the meaning of Section
22(e)(3) of the Code) or by reason of the death of the Grantee, the Warrant, to
the extent not previously exercised, shall terminate and become null and void
twelve (12) months after such termination of the Grantee’s employment, or upon
the Warrant Expiration Date, whichever occurs first.
4 Exercisability.
(a) Upon a termination of the Grantee’s employment for any reason,
pursuant to the terms of the Employment Agreement or otherwise, the Warrant
shall be exercisable only to the extent that the Warrant is vested and is in
effect on the date of such termination of the Grantee’s employment.
Notwithstanding the foregoing, the Warrant shall immediately vest in full, to
the extent unvested, and be fully exercisable to the extent unexercised, upon
any termination of Grantee’s employment by the Company without Cause or by
Executive for Good Reason (as defined in the Employment Agreement).
(b) To the
extent exercisable, the Warrant may be exercised by a legal representative on
behalf of the Grantee in the event of such permanent disability, or,
in the case of the death of the Grantee, by the estate of the Grantee or by any
person or persons who acquired the right to exercise the Warrant by bequest or
inheritance or by reason of the death of the Grantee.
5 Manner of Exercise.
(a) The Warrant may be exercised in full at one time or in part from
time to time for the number of Warrant Shares then exercisable by giving written
notice, signed by the person exercising the Warrant, to the Company, stating the
number of Warrant Shares with respect to which the Warrant is being exercised
and the date of exercise thereof, which date shall be at least five days after
the giving of such notice.
(b) Full
payment by the Grantee of the Exercise Price for the Warrant Shares purchased
shall be made on or before the exercise date specified in the notice of exercise
by delivery of (i) cash or a check payable to the order of the Company in an
amount equal to such Exercise Price, (ii) shares of Common Stock owned by the
Grantee having a Fair Market Value (as defined in the Plan) equal in amount to
such Exercise Price, or (iii) any combination of the preceding clauses (i) and
(ii).
2
(c) The
Company shall be under no obligation to issue any Warrant Shares unless the
person exercising the Warrant, in whole or in part, shall give a written
representation and undertaking to the Company which is satisfactory in form and
substance to counsel for the Company and upon which, in the opinion of such
counsel, the Company may reasonably rely, that he or she is acquiring such
Warrant Shares for his or her own account as an investment and not with a view
to, or for sale in connection with, the distribution of any such Warrant Shares,
and that he or she will make no transfer of the same except in compliance with
any rules and regulations in force at the time of such transfer under the
Securities Act of 1933, or any other applicable law.
(d) Upon
exercise of the Warrant in the manner prescribed by this Section 5, delivery of
a certificate for the Warrant Shares then being purchased shall be made at the
principal office of the Company to the person exercising the Warrant within a
reasonable time after the date of exercise specified in the notice of
exercise.
6
Non−Transferability of
Warrant. The Warrant shall not be assignable or transferable by the
Grantee other than by will or the laws of descent and distribution, and shall be
exercisable during the lifetime of the Grantee only by the Grantee. The Warrant
shall terminate and become null and void immediately upon the bankruptcy of the
Grantee, or upon any attempted assignment or transfer except as herein provided,
including without limitation, any purported assignment, whether voluntary or by
operation of law, pledge, hypothecation or other disposition, attachment,
trustee process or similar process, whether legal or equitable, upon the
Warrant.
7 Effect of Certain
Changes.
(a) General. With respect
to Common Stock, in the event of a subdivision of the outstanding shares of the
Company, any payment of a stock dividend (distribution of bonus shares), a
recapitalization, a reorganization (which may include a combination or exchange
of shares), a consolidation, a stock split, a reverse stock split, a spin-off or
other corporate divestiture or division, a reclassification or other similar
occurrence, the Committee shall make such adjustments as determined by the
Committee to be appropriate in order to adjust (i) the number of Warrant Shares
available for grant hereunder and (ii) the exercise price per Warrant Share
hereunder; provided, however, that any fractional Warrant Shares resulting from
such adjustment shall be rounded down to the nearest whole Warrant Share and
that the Company shall have no obligation to make any cash or other payment with
respect to such fractional Warrant Shares.
(b) Merger and Sale of
Company. In the event of (i) a sale of all or substantially
all of the assets of the Company; or (ii) a sale (including an exchange) of all
or substantially all of the shares of Common Stock of the Company; (iii) a
merger, consolidation, amalgamation or like transaction of the Company with or
into another corporation; (iv) a scheme of arrangement for the purpose of
effecting such sale, merger or amalgamation; or (v) such other transaction that
is determined by the Committee to be a transaction having a similar effect (all
such transactions being herein referred to as a “Merger/Sale”), then, without
the Grantee’s consent and action:
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(1) The
Committee in its sole and absolute discretion may cause the Warrant, or portion
thereof outstanding, to be assumed or an equivalent award shall be substituted
by such successor corporation of the Merger/Sale or any parent or affiliate
thereof as determined by the Board (as defined below) is its discretion (the
“Successor Corporation”), under substantially the same terms as the Warrant. For
the purposes of this clause (b)(1), the Warrant shall be considered assumed if,
following a Merger/Sale, the Warrant confers on the Grantee the right to
purchase or receive, for each Warrant Share underlying the Warrant immediately
prior to the Merger/Sale, either (i) the consideration (whether stock, cash, or
other securities or property) distributed to or received by holders of shares of
Common Stock in the Merger/Sale for each Warrant Share underlying the Warrant
held on the effective date of the Merger/Sale (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock), which may be subject to
vesting and other terms as determined by the Committee in its sole discretion,
or (ii) regardless of the consideration received by the holders of shares of
Common Stock in the Merger/Sale, solely shares (or their equivalent) of the
Successor Corporation at a value to be determined by the Committee in its
discretion, which may be subject to vesting and other terms as determined by the
Committee in its discretion. The foregoing shall not limit the Committee
authority to determine, in its sole discretion, that in lieu of such assumption
or substitution of this Warrant for a warrant or option of the Successor
Corporation, this Warrant will be substituted for any other type of asset or
property, including under clause (b)(2) hereunder.
(2) In the
event that the Successor Corporation does not agree to assume the Warrant or to
substitute an equivalent warrant or option, then the Committee may (but shall
not be obligated to), in lieu of such assumption or substitution of the Warrant
and in its sole discretion, (i) provide for the Grantee to have the right to
exercise the Warrant, or otherwise for the acceleration of vesting of the
Warrant, as to all or part of the Warrant Shares, including Warrant Shares
covered by the Warrant which would not otherwise be exercisable or vested, under
such terms and conditions as the Committee shall determine, including the
cancellation of the Warrant to the extent not exercised upon closing of the
Merger/Sale; and/or (ii) provide for the cancellation of the Warrant at the
closing of such Merger/Sale, and payment to the Grantee of an amount in cash as
determined by the Committee to be fair in the circumstances, subject to such
terms and conditions as determined by the Committee.
(c) Reservation of
Rights. Except as expressly provided in this Section 7, the Grantee shall
have no rights by reason of any subdivision or consolidation of shares of any
class or the payment of any stock dividend (bonus shares), any other increase or
decrease in the number of shares of any class or by reason of any dissolution,
liquidation, Merger/Sale, or consolidation, divestiture or spin-off of assets or
shares of another company. Any issue by the Company of shares of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number, type
or price of Warrant Shares subject to the Warrant. The grant of the Warrant
shall not affect in any way the right of power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or part of its business or assets or engage in any similar
transactions.
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8
No Special Employment
Rights. Neither the granting of the Warrant nor its exercise shall be
construed to confer upon the Grantee any right with respect to the continuation
of his or her employment by the Company (or any subsidiary of the Company) or
interfere in any way with the right of the Company (or any subsidiary of the
Company), subject to the terms of the Employment Agreement to the contrary, at
any time to terminate such employment or to increase or decrease the
compensation of the Grantee from the rate in existence as of the date
hereof.
9
Tax
Consequences. (a) All tax consequences under any
Applicable Law which may arise from the grant of this Warrant or the exercise
thereof, the sale or disposition of any Warrant Shares granted hereunder or
issued upon exercise of this Warrant or from any other action of the Grantee in
connection with the foregoing shall be borne and paid solely by the Grantee, and
the Grantee shall indemnify the Company, and its subsidiaries and affiliates,
and shall hold them harmless against and from any liability for any such tax or
penalty, interest or indexation thereon. The Grantee agrees to, and undertakes
to comply with, any ruling, settlement, closing agreement or other similar
agreement or arrangement with any tax authority in connection with the foregoing
which is approved by the Company. The Grantee is advised to consult
with a tax advisor with respect to the tax consequences of receiving or
exercising this Warrant. The Company does not assume any
responsibility to advise the Grantee on such matters, which shall remain solely
the responsibility of the Grantee.
(b) The Grantee shall notify the
Company in writing promptly and in any event within ten (10) days after the date
on which the Grantee first obtains knowledge of any tax bureau inquiry, audit,
assertion, determination, investigation, or question relating in any manner to
the Warrant granted or received hereunder or Warrant Shares issued thereunder
and shall continuously inform the Company of any developments, proceedings,
discussions and negotiations relating to such matter, and shall allow the
Company and its representatives to participate in any proceedings and
discussions concerning such matters. Upon request, the Grantee shall provide to
the Company any information or document relating to any matter described in the
preceding sentence, which the Company, in its discretion, requires.
10 No Rights of
Stockholder. The Grantee shall not be deemed for any purpose to be a
stockholder of the Company with respect to the Warrant except to the extent that
the Warrant shall have been exercised with respect thereto and, in addition, a
stock certificate shall have been issued theretofore and delivered to the
Grantee.
11 Amendment. The
Board of Directors of the Company (the “Board”) or the Committee may on behalf
of the Company amend this Agreement with the consent of the Grantee when and
subject to such conditions as are deemed to be in the best interests of the
Company.
12 Notices. Any
communication or notice required or permitted to be given hereunder shall be in
writing, and, if to the Company, to its principal place of business, attention:
Secretary, and, if to the Grantee, to the address as appearing on the records of
the Company. Such communication or notice shall be deemed given if and when (a)
properly addressed and posted by registered or certified mail, postage prepaid,
or (b) delivered by hand.
5
13 Governing Law. The
validity, construction and interpretation of this Agreement shall be governed by
and determined in accordance with the laws of the State of New
York.
[SIGNATURES
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IN
WITNESS WHEREOF, the undersigned have executed this Warrant Agreement as of the
date above written.
| MEDIS TECHNOLOGIES LTD. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |||
| Title: Chairman | |||
| GRANTEE: | |||
| /s/ Xxxx Xxxxx | |||
| Name: Xxxx Xxxxx | |||
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