EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into the 1st day of April, 1997 between OSTEOTECH,
INC., a Delaware corporation (the "Corporation") and Xxxxxxx Xxxxx (the
"Employee").
WITNESSETH:
WHEREAS, the Corporation desires to continue to employ the Employee as its
Senior Vice President, Strategic Planning and Business Development; and
WHEREAS, the Employee desires to accept such employment upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto agree as follows:
1. Employment. The Corporation hereby employs the Employee, and the
Employee hereby accepts employment by the Corporation as Senior Vice President,
Strategic Planning and Business Development upon the terms and conditions set
forth herein.
2. Term. The term of this Agreement shall commence on April 1, 1997 (the
"Effective Date") and end on the day prior to the second anniversary of the
Effective Date of this Agreement (the "Term of Employment").
3. Duties. The Employee shall perform such duties and services and shall be
allocated such resources, consistent with his position, as may be assigned to
him from time to time by the President and CEO of the Corporation. In
furtherance of the foregoing, the Employee hereby agrees to perform well and
faithfully such duties and responsibilities.
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4. Time to be Devoted to Employment.
(a) The Employee shall devote his full time and energy to the business of
the Corporation except for vacations, holidays and personal days and absences
due to temporary illness, during the Term of Employment.
(b) During the Term of Employment, the Employee shall not be engaged in any
other business activity that is considered in the judgment of the President and
CEO to either be competitive to the Corporation's business activities or would
require too great an expenditure of time and attention on the part of the
Employee. Employee hereby represents that he is not a party to any agreement
which would be an impediment to entering into this Agreement and that he is
permitted to enter into this Agreement and perform the obligations hereunder.
5. Compensation; Reimbursement.
5.1(a) During the Term of Employment, the Corporation (or at the
Corporation's option, any subsidiary or affiliate thereof) shall pay to the
Employee an annual base salary ("Base Salary") of One Hundred Forty-Seven
Thousand Dollars ($147,000), payable in bi-monthly installments. The Base Salary
shall be reviewed annually and be subject to increase at the option and in the
sole discretion of the President and CEO and Board of Directors of the
Corporation.
(b) During the Term of Employment, on an annual basis, Employee may be
entitled to a bonus and stock option grants as determined by the President and
CEO and Board of Directors of the Corporation based on Employee's performance.
There will be no guaranteed or minimum bonus or a stock option grant and the
bonus and stock option grant, if any, will be within the sole discretion of the
President and CEO and the Board of Directors.
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(c) During the Term of Employment, the Employee shall be entitled to family
medical and dental insurance coverage (the cost of which shall be paid by the
Corporation) short and long term disability coverage, eligibility for
participation in the Corporation's 401K plan and to such other fringe benefits
as are made available from time to time to the executives of the Corporation,
including four (4) weeks vacation.
(d) The Corporation shall reimburse Employee, in accordance with its
practice from time to time for other employees of the Corporation, for all
reasonable and necessary travel expenses, disbursements and other reasonable and
necessary incidental expenses incurred by him for or on behalf of the
Corporation in the performance of his duties hereunder upon presentation by the
Employee to the Corporation of appropriate vouchers.
6. Involuntary Termination. (a) If Employee is incapacitated or disabled by
accident, sickness or otherwise so as to render him mentally or physically
incapable of performing the services required to be performed by him under this
Agreement for a period of 90 consecutive days or longer, or for 90 days during
any ten-month period (such condition being herein referred to as "Disability"),
the Corporation may, at that time or any time thereafter, at its option, with
the approval of a majority of the Board of Directors of the Corporation,
terminate the employment of Employee under this Agreement immediately upon
giving him notice to that effect (such termination, as well as a termination
under Section 6(b) hereof, being hereinafter called an "Involuntary
Termination"). Until the Corporation shall have terminated Employee's employment
hereunder in accordance with the foregoing, Employee shall be entitled to
receive his compensation, notwithstanding any such physical or mental
disability.
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(b) If the Employee dies during the Term of Employment, his employment
hereunder and the Term of Employment shall be deemed to cease as of the date of
his death.
7. Termination For Cause. The Corporation may terminate the employment of
the Employee hereunder and the Term of Employment at any time during the Term of
Employment for "cause" (such termination being hereinafter called a "Termination
For Cause") by giving the Employee notice of such termination, upon the giving
of which such termination shall take effect immediately. For the purposes of
this Section 7, "cause" shall mean (i) the Employee's willful misconduct with
respect to the business and affairs of the Corporation or any subsidiary or
affiliate thereof, which action materially and adversely affects the business or
affairs of the Corporation or any subsidiary or affiliate thereof, (ii) the
Employee fails in any material respect to observe and perform his obligations
and duties hereunder, (iii) the commission by the Employee of an act involving
embezzlement or fraud against the Corporation or commission or conviction of a
felony, or (iv) failure to abide in some material respect by the Corporation's
rules of conduct, terms and conditions set forth in the Corporation's handbook,
as amended from time to time.
8. Termination Without Cause. The Corporation may terminate the employment
of the Employee hereunder and the Term of Employment at any time without "cause"
(such termination being hereinafter called a "Termination Without Cause"). Upon
a Termination without Cause during the Term of Employment, Employee shall be
entitled to receive his Base Salary for twelve (12) months or until Employee
obtains comparable employment, whichever
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occurs sooner plus all earned but unpaid bonus at the time of termination. In
addition, upon a Termination Without Cause at any time, the Corporation shall
continue to pay the Employee's family medical insurance premiums under the
Corporation's medical insurance plan and other benefits (including outplacement
benefits) provided in Section 5.1(c) for twelve (12) months following such
termination or until Employee obtains comparable employment, whichever occurs
sooner.
9. Voluntary Termination. Any termination of the employment of the Employee
hereunder otherwise then as a result of an Involuntary Termination, a
Termination For Cause or a Termination Without Cause shall be deemed to be a
"Voluntary Termination". A Voluntary Termination shall be deemed to be effective
immediately upon such termination.
10. Effect of Termination of Employment.
(a) Upon the termination of the Employee's employment hereunder pursuant to
a Voluntary Termination, Involuntary Termination or a Termination For Cause,
neither the Employee nor his beneficiary or estate shall have any further rights
or claims against the Corporation under this Agreement except to receive:
(i) the unpaid portion of the Base Salary provided for in Section
5.1(a), computed on a pro rata basis to the date of termination, plus any
earned but unpaid bonus with respect to the prior year;
(ii) reimbursement for any expenses for which the Employee shall not
have theretofore been reimbursed as provided in Section 5.1(d);
(iii) payment of all accrued and unused vacation time.
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(b) Upon the termination of the Employee's employment hereunder pursuant to
a Termination Without Cause, neither the Employee nor his beneficiary or estate
shall have any further rights or claims against the Corporation under this
Agreement except to receive a termination payment equal to that provided for in
Section 10(a) hereof, plus the amounts set forth in Section 8, if any.
11. General Provisions
(a) This Agreement and any or all terms hereof may not be changed, waived,
discharged, or terminated orally, but only by way of an instrument in writing
signed by the parties.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey, without reference to the conflicts of laws
of the State of New Jersey or any other jurisdiction.
(c) If any portion of this Agreement shall be found to be invalid or
contrary to public policy, the same may be modified or stricken by a Court of
competent jurisdiction, to the extent necessary to allow the Court to enforce
such provision in a manner which is as consistent with the original intent of
the provision as possible. The striking or modification by the Court of any
provision shall not have the effect of invalidating the Agreement as a whole.
(d) The obligations of Sections 8, 10, 11, 12, 13 and 14 shall survive
termination of this Agreement.
12. Corporation Rights to Intellectual Property. The Employee shall
promptly disclose, grant and assign ownership to the Corporation for its sole
use and benefit any and all inventions,
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improvements, information, copyrights and suggestions (whether patentable or
not), which he may develop, acquire, conceive or reduce to practice while
employed by the Corporation (whether or not during usual working hours),
together with all patent applications, letters patent, copyrights and reissues
thereof that may at any time be granted for or upon any such invention,
improvement or information. In connection therewith:
(i) The Employee shall without charge, but at the expense of the
Corporation, promptly at all times hereafter execute and deliver such
applications, assignments, descriptions and other instruments as may be
reasonably necessary or proper in the opinion of the Corporation to vest
title to any such inventions, improvements, technical information, patent
applications, patents, copyrights or reissues thereof in the Corporation
and to enable it to obtain and maintain the entire right and title thereto
throughout the world; and
(ii) The Employee shall render to the Corporation at its expense
(including reimbursement to the Employee of reasonable out-of-pocket
expenses incurred by the Employee and a reasonable payment for the
Employee's time involved in case he is not then in its employ) all such
assistance as it may reasonably require in the prosecution of applications
for said patents, copyrights or reissues thereof, in the prosecution or
defense of interferences which may be declared involving any said
applications, patents or copyrights and in any litigation in which the
Corporation may be involved relating to any such patents, inventions,
improvements or technical information.
13. Protection of Information.
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(a) Employee hereby covenants with Corporation that, throughout the term of
his employment by Corporation, Employee will serve Corporation's best interests
loyally and diligently. Throughout the course of employment by Corporation and
thereafter, Employee will not disclose or provide to any person, firm,
corporation or entity (except when authorized by Corporation) any information,
materials, biologics or animals which are owned by the Corporation or which come
into the possession of the Corporation from a third party under an obligation of
confidentiality, including without limitation, information relating to trade
secrets, business methods, products, processes, procedures, development or
experimental projects, suppliers, customer lists or the needs of customers or
prospective customers, clients, etc. (collectively "Confidential Information"),
which Confidential Information, comes into his possession or knowledge during
the Term of Employment, and he will not use such Confidential Information for
his own purpose or for the purpose of any person, firm, corporation or entity,
other than the Corporation.
(b) The provisions of Section 13(a) shall not apply to the following
Confidential Information:
(i) Confidential Information which at the time of disclosure is
already in the public domain;
(ii) Confidential Information which the Employee can demonstrate was
in his possession or known to him prior to the effective date of his
employment by the Corporation ;
(iii) Confidential Information which subsequently becomes part of the
public domain through no fault of the Employee;
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(iv) Confidential Information which becomes known to the Employee
through a third party who is under no obligation of confidentiality to the
Corporation; and
(v) Confidential Information which is required to be disclosed by law
or by judicial or administrative proceedings.
14. Non-Compete. Employee agrees that during the Term of Employment and for
two years after termination or expiration of his Term of Employment he shall not
directly or indirectly be engaged in or assist others in engaging in any
business or activity which is involved in selling products, processes or
services which compete with any product, process or service which Corporation is
developing, marketing or selling at the time of such termination whether his
involvement shall be as an owner (except for passive ownership of up to five
percent (5%) of the securities of a company), officer, director, employee,
consultant, partner or agent.
15. Notices. Notices and other communications hereunder shall be in writing
and shall be delivered personally or sent by air courier or first class
certified or registered mail, return receipt requested and postage prepaid,
addressed as follows unless the party specifies a new address in writing:
If to the Employee:
Xxxxxxx Xxxxx
00 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
If to the Corporation: Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, XX 00000
Attn: President and CEO
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given to the
date of delivery if personally
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delivered; on the business day after the date when sent if sent by air courier;
and on the third business day after the date when sent if sent by mail, in each
case addressed to such party as provided in this Section or in accordance with
the latest unrevoked direction from such party.
16. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17. Assignment. This Agreement is personal in its nature and the parties
hereto shall not, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that the
provisions hereof shall inure to the benefit of, and be binding upon each
successor of the Corporation, whether by merger, consolidation, transfer of all
or substantially all assets, or otherwise and the heirs and legal
representatives of the employee.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
Corporation: OSTEOTECH, INC.
By:___________________________
Title:________________________
Employee: ______________________________
Xxxxxxx Xxxxx
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