Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 11, 1993, is
made by and between Osiris Therapeutics, Inc., a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxx (the "Employee").
RECITALS
A. The Company desires to employ Employee as its Chairman, President and
Chief Executive Officer.
B. Employee is willing to become employed by the Company on the terms and
conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, the Company and the Employee agree as follows:
l. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment with the Company, for the term set forth in Section 2 below,
in the position and with the duties and responsibilities set forth in Section 3
below, and upon the other terms and conditions hereinafter stated.
2. Term. Subject to the provisions of Section 3(a), the initial term of
employment shall commence on the date of this Agreement and shall end on
December 31, 1995, unless sooner terminated pursuant to the terms of this
Agreement. Commencing on the third anniversary of the Commencement Date (as
defined below), unless the term of employment has otherwise been terminated
pursuant to Section 7, the term of employment shall be automatically renewed for
successive two year terms unless the Company makes the election described in
Section 7(a), and each such renewal term shall be for two years unless sooner
terminated pursuant to the terms of this Agreement. The period described above
shall be the "term of employment," and the "Commencement Date" shall be January
1, 1993.
3. Position. Duties, Responsibilities and Authority.
(a) Subject to the other provisions of this paragraph (a), during the
term of employment, Employee shall serve as Chairman of the Board, President and
Chief Executive Officer of the Company, reporting and responsible only to the
Board of Directors of the Company. Employee shall have the duties and
responsibilities set forth on Exhibit A to this Agreement and such other duties
and responsibilities appropriate for such positions as the Board of Directors of
the Company may from time to time reasonably determine. In the event that the
Board of
Directors of the Company desires to hire an individual to serve as the full-time
President and Chief Executive Officer of the Company, and such individual has
been either approved by Employee in writing (such approval not to be
unreasonably withheld) or has been approved by a vote of a majority of the
Directors of the Company at a time when at least two of the Directors of the
Company are not employees of or consultants to the Company, the Company shall be
entitled to cause Employee to relinquish his positions as President and Chief
Executive Officer of the Company. The Board of Directors shall exercise such
option by delivering written notice of such election not less than 90 days prior
to the date on which Employee shall cease to hold such positions. On the date
on which Employee relinquishes the positions of President and Chief Executive
Officer pursuant to this Section 3(a), the term of employment shall be
automatically renewed for a three year period and shall be automatically renewed
for successive two year periods after such three year period unless the Company
makes the election described in Section 7(a), and Exhibit A to this Agreement
shall be amended by the mutual agreement of the Company and Employee to reflect
Employee's duties as Chairman of the Company.
(b) Throughout the term of employment, Employee shall devote such
time and attention to the business of the Company as may be necessary to fulfill
his duties and responsibilities under Section 3(a). Nothing in this Agreement
shall preclude Employee from serving as a director, officer or employee of, or
consultant to, other corporations or organizations (and receiving compensation
therefor from any such corporation or organization) so long as (i) such services
do not substantially interfere with the performance of his duties for the
Company and (ii) such services do not otherwise violate Section 10 of this
Agreement.
(c) The Company shall provide Employee with suitable office space, a
secretary and other appropriate support at the Company's offices in Cleveland,
Ohio. Employee shall be entitled to also work out of his office in Darien,
Connecticut (or any other place where Employee's principal residence may from
time to time be located), but such office shall be maintained at Employee's own
expense.
4. Base Compensation.
(a) Commencing on the date (the "Financing Closing. Date") on which
the Company has sold shares of its capital stock (common or preferred) for an
aggregate purchase price of at least $3,000,000 (but retroactive to the
Commencement Date), and thereafter during the term of employment, Employee shall
receive base compensation at an annual rate of not less than $150,000. Such base
compensation shall be paid in accordance with the Company's normal procedure for
compensating its management employees, but not less frequently than monthly.
The first payment of base compensation made to Employee shall include base
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compensation from the Commencement Date. Such base compensation shall be
increased to an annual rate of not less than $200,000 on the date on which the
Company has sold shares of its capital stock (common or preferred) for an
aggregate purchase price of at least $5,000,000 (including the purchase price of
any shares of capital stock contemplated by the first sentence of this Section
4). In addition, on each anniversary of the Commencement Date Employee's base
compensation shall be increased by an amount equal to 10% of Employee's base
compensation in effect immediately prior to such anniversary.
(b) In the event that Employee ceases to serve as President and Chief
Executive Officer of the Company in accordance with Section 3(a), his base
compensation shall be reduced to an annual rate of not less than $100,000;
provided, however, that the amount of such minimum base compensation rate to be
paid shall be increased by 10% on January 1 of each year commencing January 1,
1994.
5. Incentive Compensation. Employee and the Board of Directors of the
Company shall establish a merit bonus plan (the "Plan") setting forth such goals
and objectives for the Company as Employee and the Board of Directors shall
determine. The Plan shall provide for Employee to receive a cash bonus, based
on the Company's achievement of such goals and objectives, during each fiscal
year of the Company during which Employee serves as Chairman and/or President
and Chief Executive Officer of the Company. The bonus for any fiscal year shall
not exceed 50% of Employee's base compensation in effect at the end of such
fiscal year, and shall be paid to Employee within 60 days following the end of
such fiscal year.
6. Benefits. Perquisites and Expenses. During the term of employment,
Employee and his dependents, and his beneficiaries to the extent provided in the
applicable plan or program, shall be entitled to participate in all Company
benefit plans, programs or practices maintained by the Company from time to
time. Without limiting the generality of the foregoing, Employee shall be
entitled to the following specific benefits and perquisites:
(a) Participation in the employee benefit plans of the Company, as
they may be modified or added to from time to time, including, without
limitation, plans providing retirement benefits, medical insurance, life
insurance, disability insurance, and accidental death or dismemberment
insurance.
(b) While Employee is serving as President and Chief Executive
Officer of the Company, four weeks of paid vacation in each calendar year during
the term of employment, plus such holidays, sick leave and other time off as
are established by the policies of the Company approved by the Company's Board
of Directors. Unused days of vacation may be carried over to March 31 of the
subsequent year and shall thereafter lapse for all
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time. Employee shall receive, within 30 days after his employment terminates
for any reason, a payment (based on Employee's base compensation in effect on
the date of Employee's termination) for any amount of unused vacation at the
time of such termination, which had been earned on such uniform basis during the
calendar year in which termination occurs.
(c) Reimbursement for all reasonable and documented expenses incurred
by Employee in connection with the performance of his duties hereunder, in
accordance with the Company policy with respect to such reimbursement. In
addition to the foregoing, within 30 days after the Company has sold shares of
its capital stock (common or preferred) for an aggregate purchase price of at
least $1,000,000, the Company shall reimburse Employee for all reasonable and
documented expenses incurred by him in connection with his activities on behalf
of the Company prior to the date of this Agreement.
(d) Commencing on the Financing Closing Date (as defined in Section
4(a)), reimbursement of $500 per month of the cost of leasing an automobile for
Employee's use. The Company shall also pay all insurance, maintenance,
operating costs, fuel and license and registration fees with respect to such
automobile.
(e) Reimbursement of up to $1,000 per month for all reasonable and
documented expenses incurred by Employee commuting between his home and the
Company's offices and for lodging while Employee is in Cleveland, Ohio.
(f) Within 15 days after the Company has sold shares of its capital
stock (common or preferred) for an aggregate purchase price of at least
$500,000, reimbursement of up to $2,500 of reasonable and documented legal fees
incurred by Employee in connection with the negotiation of this Agreement with
the Company.
(g) Commencing on the Financing Closing Date, life insurance on the
life of Employee in a face amount of $1,000,000 and naming the Employee or his
designees as the beneficiary.
(h) On the date on which the Company enters into a collaboration or
research agreement with a corporation, a stock option immediately exercisable
for 500 shares of the Company's common stock and with an exercise price per
share equal to the then fair market value of such common stock, as determined in
good faith by the Board of Directors of the Company. The number of shares to
be covered by such option shall be adjusted as necessary to account for any
stock splits or similar recapitalization subsequent to the date of this
Agreement.
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7. Termination of Employment.
(a) The Company may elect not to renew the term of employment for any
reason, such election to be effective as of either the third anniversary of the
Commencement Date or the end of a renewal term (as described in Section 2
hereof), upon giving Employee written notice at least 180 days in advance of
such election.
(b) Employee may terminate his employment at any time upon giving the
Company written notice 90 days in advance of the proposed date of termination.
(c) Employee's employment shall terminate automatically upon the
death of Employee.
(d) At any time after Employee suffers a "Disability" (as defined
below), the Company may terminate Employee's employment upon giving Employee
written notice from the Board of Directors of the Company, accompanied by a
certified copy of a resolution to that effect duly adopted by the Board of
Directors, at least 60 days in advance of the date on which such termination is
to become effective. For the purposes of this Agreement "Disability" shall have
the same meaning as any similar term under any long term disability insurance
policy or long term disability plan maintained by the Company from time to time.
In the event the Company shall not be maintaining any such policy or plan,
Employee shall be considered to have a Disability if he is receiving disability
income payments under the Social Security system, or if any life insurance
carrier has agreed to waive premiums due under any life insurance policy
maintained by the Company on Employee's life under a disability waiver provision
set forth in such policy. In addition, Employee shall be considered to have a
Disability if the Company receives, from a physician reasonably acceptable to
it, written certification that(i) Employee is unable to provide services to the
Company of a quality and nature consistent with past practice because of a
mental or physical impairment, and (ii) there is no reasonable prospect that
Employee will be able to render services of such quality and nature within the
longer of (x) six months, or (y) the period of disability required in order for
Employee to be eligible to receive disability income payments under any long
term disability insurance policy or long term disability plan maintained by the
Company at such time, from the date of such certificate.
(e) The Company may terminate Employee's employment without cause at
any time and for any reason by giving Employee written notice from the Board of
Directors of the Company at least 90 days in advance of the date on which the
termination is to become effective. Employee's- employment shall be considered
to have been constructively terminated without cause by the Company if Employee
resigns because:
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(i) his resignation is requested by the Board of Directors;
(ii) the Company breaches any provision of this Agreement and
fails to remedy such breach within 30 days after receiving written
notice from Employee requesting that the Company remedy such breach;
or
(iii) he is removed from, or not elected to, the Company's
Board of Directors at any time during the term of employment.
(f) The Company may terminate Employee's employment at any time for
cause by delivering to Employee a certified copy of a resolution of the Board of
Directors of the Company finding that Employee committed an act or omission
constituting cause hereunder and specifying the particulars thereof in detail,
adopted at a meeting called and held for that purpose and of which Employee was
provided not less than seven days' advance notice, including notice of the
agenda of such meeting. As used herein, the term "cause" shall mean:
(i) conviction of a felony involving the Company;
(ii) intentionally acting in a manner which is materially
detrimental or materially damaging to the Company's reputation or
business operations other than actions which involve Employee's bad
judgment or a decision which was taken in good faith, provided that
Employee shall have failed to remedy such action within 30 days after
the date of the meeting at which the Board of Directors adopts a
resolution requesting that he terminate such action after having given
written notice to Employee of its position with respect to such
actions and of the agenda of the Board meeting setting forth such
resolution as a matter to be acted on at such meeting and allowing
Employee an opportunity to be heard at such meeting; or
(iii) committing any material breach of this Agreement which
results in material damage to the Company, provided that Employee
shall have failed to take reasonable steps to remedy such alleged
breach within 30 days after his receipt of written notice from the
Board of Directors of the Company pursuant to a resolution duly
adopted by the Board of Directors of the Company requesting that he
remedy such alleged breach after notice to Employee and an opportunity
for Employee to be heard at a meeting of the Board of Directors or, if
such breach is incapable of being remedied within such 30 day period
but is capable of being remedied within a reasonable period of time,
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Employee shall have failed to use his best efforts to remedy such
breach promptly after such meeting.
8. Certain Payments and Obligations.
(a) Upon any termination of employment under paragraph (b) or (f) of
Section 7:
(i) the Company shall pay Employee in a lump sum within ten days
following such termination an amount equal to the base compensation and any
incentive or bonus compensation Employee was entitled to receive up to the
time of termination, plus the amount of any expenses that are reimbursable
under paragraph (c) of Section 6; provided, however, that Employee shall
not be entitled to any severance payment under the Company's then existing
severance pay policy or plan (if any); and
(ii) Employee shall have no further obligation to the Company under
this Agreement except that he shall continue to be bound by the provisions
of Sections 9, 10 and 11 hereof to the extent applicable to the period
following the term of employment.
(b) Upon any termination of employment under paragraph (c) of Section
7, the Company shall pay Employee's estate the same amounts as are provided in
paragraph (c) of this Section 8, except that the period of time on which the
lump sum payment under clause (ii) is based shall be 12 months; provided,
however, that in the event that at the time of Employee's death the Company is
maintaining life insurance on Employee naming Employee and/or his heirs as
beneficiaries, the amount of the insurance paid or payable to Employee's estate
and/or heirs shall reduce, on a dollar for dollar basis, the payment to
Employee's estate under this paragraph (b).
(c) Upon any termination of employment under paragraph (e) of Section
7 with or without the required notice:
(i) the Company shall pay Employee in a lump sum within ten days
following such termination an amount equal to the base compensation
and any incentive or bonus compensation Employee was entitled to
receive up to the time of termination, plus the amount of any expenses
that are reimbursable under paragraph (c) of Section 6; provided,
however, that Employee shall not be entitled to any severance payment
under the Company's then existing severance pay policy or plan;
(ii) the Company shall (A) pay Employee in a lump sum payment
within ten days following such termination an amount equal to the
present value (based on a discount rate equal to the then prime rate
of Society National Bank of
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Cleveland, Ohio or its successor) of the aggregate cash compensation
Employee would have received under this Agreement if the term of
employment had continued for a period of time equal to the greater of
(1) the period of time the term of employment would have continued but
for such termination (excluding any subsequent renewal term) and (2)
12 months, based on the rate of Employee's total annual cash
compensation (base plus bonus and incentive compensation) for the year
prior to the year in which such termination occurs (or, if such
termination occurs during the first year of the term of employment,
the rate of compensation in effect during such year), and (B)
continue to provide 'Employee and, if applicable, his dependents with
the benefits provided under the benefit plans (pursuant to the terms
thereof) described in Section 6(a) hereof, to the same extent that
such benefits were provided to Employee on the date of termination of
his employment, for a period of time equal to the period of time used
to determine the amount of the lump sum payment to Employee under (A)
above; and
(iii) Employee shall have no further obligation to the
Company under this Agreement except that he shall continue to be bound
by the provisions of Sections 9, 10 and 11 hereof to the extent
applicable to the period following the term of employment.
(d) Upon any termination of employment under paragraph or (d) of
Section 7:
(i) the Company shall pay Employee the same amounts, and shall
provide Employee with the same benefits, as are provided in paragraph
(c) of this Section 8, except that the period of time on which the
lump sum payment is based and the period during which Employee shall
be entitled to benefits under clause (ii) of such paragraph (c) shall
be 12 months; and
(ii) Employee shall have no further obligation to the Company
under this Agreement except that he shall continue to be bound by the
provisions of Sections 9, 10 and 11 hereof to the extent applicable to
the period following the term of employment.
9. Confidentiality.
Employee acknowledges that by reason of his duties as an employee of
the Company he has or will have access to and become informed of confidential
and secret information which is a competitive asset of the Company (collectively
"Confidential Information") including, without limitation, (a) information
concerning concepts for products and services and products and
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services data, (b) corporate planning data, (c) the Company's financial results
and business condition, and (d) any other information which constitutes a "trade
secret" under the Uniform Trade Secrets Act. Employee agrees to keep in strict
confidence and not, either directly or indirectly, to make known, divulge,
reveal, furnish, make available or use any Confidential Information, except for
use in the Employee's regular authorized duties on behalf of the Company.
Employee acknowledges that all documents and other property including or
reflecting Confidential Information furnished to Employee by the Company or
otherwise acquired or developed by the Company shall at all times be the
property of the Company. Employee agrees that upon termination of Employee's
employment with the Company, for any reason, Employee shall return to the
Company any such documents or other property (including copies, summaries or
analyses of the foregoing) containing Confidential Information which are in his
possession, custody or control. Employee further agrees that Employee's
obligations of confidentiality hereunder shall survive any termination of
Employee's employment by the Company. For the purposes of this Section 9,
Confidential Information shall not include information which has become, through
no fault of Employee, generally known to the public, and Employee, if required
by law to make disclosure of Confidential Information to a court of competent
jurisdiction, may make such disclosure after providing the Company with
reasonable notice and an opportunity to contest such requirement. The
obligations of Employee under this Section 9 are in addition to, and not in
limitation of or pre-emption of, all other obligations of confidentiality which
he may have to the Company under general legal and equitable principles.
10. Noncompetition.
Employee acknowledges that his access to and knowledge of the
Confidential Information would be valuable to a competitor of the Company.
Employee further acknowledges that it would be inherent in the performance of
his duties as a director, officer, employee, agent, consultant, shareholder or
partner of any corporation, partnership or other entity which competes with the
Company, or which intends to or may compete with the Company, to disclose or use
such knowledge to or for the benefit of such corporation, partnership or other
entity. To protect these vital interests of the Company, Employee agrees that
from the date of this Agreement through the second anniversary of the date on
which his employment with the Company terminates for any reason (the
"Noncompetition Period"), he shall not, directly or indirectly, whether as a
director, officer, employee, agent or consultant or otherwise: (a) invest in or
become employed by or affiliated with, in any capacity, any corporation,
partnership or other entity which is engaged in a business which is competitive
with the business of the Company on the date of such termination (except that
Employee may purchase up to two percent of the outstanding capital stock of a
company that has common stock
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quoted on a national stock exchange or the over-the-counter market); (b) solicit
sales of, or sell or deliver, any product or service of the kind and character
sold or distributed by the Company; (c) solicit, attempt to solicit or seek to
divert from the Company the business or patronage of any person, corporation,
partnership or other entity with whom the Company has had business relations; or
(d) engage, suggest or assist in or influence the engagement of hiring by any
competitor of the Company of any employee of the Company, or otherwise cause or
encourage any person, corporation, partnership or other entity having a business
or employment relationship with the Company to sever such relationship with or
commit any act harmful to the Company. Employee's obligations and covenants
under this Section 10 shall be limited to North America, Europe, Japan, Taiwan,
Singapore and Australia. For the purposes of this Section 10, the business of
the Company shall mean the research, development and commercialization of
products based on human mesenchymal stem cells and other lineage cells,
including without limitation the research, development and commercialization of
cellular transplants and cell-matrix products utilizing mesenchymal stem cells
and other lineage cells.
11. Inventions.
Employee hereby assigns and agrees to assign to the Company, its
successors, assigns or nominees, all of his rights to any discoveries,
inventions and improvements, whether patentable or not, made, conceived or
suggested, either solely or jointly with others, by Employee while in the
Company's employ, whether in the course of his employment with the use of the
Company's time, material or facilities or that is in any way within or related
to the existing or contemplated scope of the Company's business. Any discovery,
invention or improvement relating to any subject matter with which the Company
was concerned during Employee's employment and made, conceived or suggested by
Employee, either solely or jointly with others, within one year following
termination of Employee's employment under this Agreement shall be irrebuttably
presumed to have been so made, conceived or suggested in the course of such
employment with the use of the Company's time, materials or facilities. Upon
request by the Company with respect to any such discoveries, inventions or
improvements, Employee will execute and deliver to the Company, at any time
during or after his employment, all appropriate documents for use in applying
for, obtaining and maintaining such domestic and foreign patents as the Company
may desire, and all proper assignments therefor, when so requested by and at the
expense of the Company, but without further or additional consideration.
Notwithstanding any other provision of this Section 11, the Company's rights
with respect to any discoveries, inventions or improvements shall be subject to
the rights of Case Western Reserve University under any license agreement
between it and the Company entered into subsequent to the date of this
Agreement.
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12. Issuance of Shares.
(a) In order to provide Employee with additional incentive to further
the interests of the Company, the Company hereby issues and sells to Employee
7,000 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), for a price per share of $.15. Of such 7,000 Shares of Common
Stock (the "Shares"), 2,200 Shares are issued and sold to Employee without
restriction other than as provided in clause (ii) of paragraph (b) below, and
4,800 Shares (the "Restricted Shares") are subject to the restrictions and risk
of forfeiture set forth in paragraphs (b) and (c) of this Section 12.
(b) Restrictions on Transfer of Shares. The Shares subject to this
Agreement may not be transferred, sold, pledged, exchanged, assigned or
otherwise encumbered or disposed of by the Employee, except to the Company,
unless and until (i) in the case of the Restricted Shares, such Shares have
become nonforfeitable in accordance with paragraph (c) of this Section 12 and
(ii) in the case of all the Shares, the transfer of such Shares has been made in
compliance with Section 3 of the Stockholders Agreement dated as of March 11,
1993 by and among the Company, Employee and the Company's other stockholders.
Any purported transfer, encumbrance or other disposition of the Shares that is
in violation of this Section 12 shall be null and void, and the other party to
any such purported transfer, encumbrance or other disposition shall not obtain
any rights to or interest in such Shares. The certificate(s) evidencing the
Shares shall bear a legend in a form satisfactory to the Company reflecting the
restrictions described above.
(c) Vesting of Restricted Shares. The Restricted Shares shall become
nonforfeitable as follows: (i) 2,600 Restricted Shares shall become
nonforfeitable in the event the Company consummates sales of shares of its
capital stock (common or preferred) for an aggregate purchase price of at least
$4,000,000 (including the purchase price of any shares of its capital stock
contemplated by Section 4 of this Agreement) on or before the earlier of the
date on which Employee's employment with the Company is terminated under either
Section 7(b) or 7(f) of this Agreement and July 1, 1994; and (ii) 2,200
Restricted Shares shall become nonforfeitable if the Company shall attain a
valuation of at least twenty million dollars during such time as Employee is
serving as the Chief Executive Officer of the Company. Notwithstanding the
foregoing, in the event of (A) a termination of Employee pursuant to Section
7(a) or 7(e) of this Agreement; or (B) a merger of the Company into another
corporation in which the Company is not the surviving corporation or a sale of
all or substantially all of the assets of the Company, all of the Restricted
Shares shall become immediately nonforfeitable. For purposes of this paragraph
(c), the Company shall have attained a value of twenty million dollars at such
time as the Company shall have completed a sale of its capital
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stock at a price per share (on a Common Stock equivalent price if shares other
than shares of Common Stock are sold) which when multiplied by the number of
shares of the Company's Common Stock then outstanding on a fully diluted basis
(assuming the full conversion of any securities convertible into Common Stock
and the full exercise of any stock options or warrants without regard to vesting
requirements) equals or exceeds twenty million dollars.
(d) Forfeiture of Restricted Shares. Any of the Restricted Shares
that have not become nonforfeitable in accordance with paragraph (c) hereof
shall be forfeited by the Employee. In the event of a forfeiture, the
certificate(s) representing all of the Restricted Shares that have not become
nonforfeitable in accordance with paragraph (c) hereof shall be canceled and the
Employee shall have no further interest in or rights with respect to such
Restricted Shares.
(e) Dividend, Voting and Other Rights. Employee shall have all of
the rights of a stockholder with respect to the Restricted Shares, including the
right to vote the Restricted Shares and receive any dividends that may be paid
thereon; provided, however, that any additional shares of Common Stock or other
securities that Employee may become entitled to receive pursuant to a stock
split or dividend with respect to the Common Stock or a merger or reorganization
in which the Company is the surviving corporation or any other change in the
capital structure of the company shall be subject to the same restrictions and
risk of forfeiture as the Restricted Shares with respect to which such
additional shares of Common Stock or other securities were received by Employee.
(f) Retention of Stock Certificate(s) by the Company The
certificate(s) representing the Restricted Shares covered by this Agreement
shall be held in custody by the Company, together with a stock power with
respect thereto endorsed in blank by Employee, until those Restricted Shares
have become nonforfeitable in accordance with paragraph (c) of this Section 12.
(g) Withholding Taxes. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with any issuance of the
Shares or other securities pursuant to this Section 12, Employee shall pay the
tax or make provisions that are satisfactory to the Company for the payment
thereof.
(h) Other. No provision of this Section 12 shall limit in any way
whatsoever any right that the Company may otherwise have to terminate the
employment of Employee at any time. Any economic or other benefit to Employee
under this Section 12 shall not be taken into account in determining any
benefits to which Employee may be entitled under any profit-
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sharing, retirement or other benefit or compensation plan maintained by the
Company and shall not affect the amount of any life insurance coverage available
to any beneficiary under any life insurance plan covering employees of the
company.
13. Miscellaneous.
(a) All notices required to be given under this Agreement shall be in
writing and delivered personally or sent by registered mail or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to the Company:
Osiris Therapeutics, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. XxXxxxxxxx
If to Employee:
Xxxxx X. Xxxxx
00 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
with a copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Xxxxxxxxx & Xxxxxxxx, P.C.
000 Xxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Notice shall be deemed delivered at the time received in the case of personal
delivery, or five business days after it is mailed in the case of mailing.
(b) This Agreement shall be subject to and governed by the internal
laws of the State of Ohio (without regard to conflicts of law principles).
(c) The headings or titles to sections in this Agreement are intended
solely for convenience and no provision of this Agreement is to be construed by
reference to the heading or title of any section.
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(d) No provision of this Agreement may be amended, modified or waived
unless such amendment, modification or waiver is authorized by the Board of
Directors of the Company and is agreed to in a writing signed by Employee and by
a duly authorized officer of the Company (other than Employee). Except as
otherwise specifically provided in this Agreement, no waiver by any party hereto
of any breach by any other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of a
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time; nor shall the receipt or acceptance of compensation or other benefits
following any termination of Employee's employment be deemed a waiver of any
condition or provision hereof.
(e) Employee shall not assign, pledge or encumber any interest in
this Agreement or any part thereof without the express written consent of the
Company, this Agreement being personal to Employee. This Agreement shall,
however, inure to the benefit of Employee's estate, dependents, beneficiaries
and legal representatives. This Agreement shall not be assignable by the
Company without the written consent of Employee, but if the Company shall merge
or consolidate with or into, or transfer all or substantially all of its assets
to, another corporation or other form of business organization, then this
Agreement shall inure to the benefit of and be binding upon the successor of the
Company resulting from such merger, consolidation or transfer. No such merger,
consolidation or transfer, however, shall relieve the Company from liability and
responsibility for the performance of its duties and obligations hereunder.
(f) Each provision of this Agreement constitutes a separate and
distinct undertaking, covenant and/or provision hereof. In the event that any
provision of this Agreement shall finally be determined to be unlawful, such
provision shall be deemed severed from this Agreement, but every other provision
of this Agreement shall remain in full force and effect, and in substitution for
any such provision held unlawful, there shall be substituted a provision of
similar import reflecting the original intent of the parties hereto to the
extent permissible under law.
(g) This Agreement and the agreements referred to herein comprise the
entire understanding between the Company and Employee as to the subject matter
hereof and supersedes all prior agreements relating thereto.
(h) In the event of a breach by Employee of any of the provisions of
Sections 9, 10 or 11 of this Agreement, the Company shall have the right to
institute and prosecute proceedings, in equity, in any court of competent
jurisdiction, to obtain an injunction during or after the term of this Agreement
to enforce the provisions of such Sections and to pursue any other remedy to
-14-
which the Company may be entitled. Employee acknowledges that the Company's
remedy at law for any of Employee's obligations under such Sections will be
inadequate, and Employee agrees and consents that temporary and permanent
injunctive relief may be granted in any proceeding which may be brought to
enforce any provision thereof, without the necessity of proof of actual damage.
(i) Any controversy or claim arising under this Agreement, except for any
controversy or claim which involves a claim by the Company for equitable or
injunctive relief with respect to Section 9, 10 and/or 11 of this Agreement,
shall be settled by arbitration in Cleveland, Ohio in accordance with the Rules
of the American Arbitration Association then in effect. The controversy or claim
shall be submitted to three arbitrators, one of whom shall be chosen by the
Company, one of whom shall be chosen by Employee, and the third of whom shall be
chosen by the two arbitrators so selected. The party desiring arbitration shall
give written notice to the other party of its desire to arbitrate the particular
matter in question naming the arbitrator selected by it. If the other party
shall fail, within a period of 15 days after such notice shall have been given,
to reply in writing naming the arbitrator selected by it, then the other party
may apply to the American Arbitration Association for the appointment of an
arbitrator to serve as the arbitrator chosen by the other party. The decision
of any two of the arbitrators shall be final and binding upon the parties hereto
and shall be delivered in writing, signed in triplicate, by the concurring
arbitrators to each of the parties hereto. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof. In
addition, the prevailing party in such an arbitration proceeding shall be
entitled to recover his or its reasonable attorney's fees and all reasonable
out-of-pocket costs and disbursements, as well as any and all charges which may
be made for the cost of the arbitration and the fees of the arbitrators. In the
event a claim or controversy arising under this Agreement involves a claim by
the Company for equitable or injunctive relief with respect to Section 9, 10
and/or 11 of this Agreement, the parties may, but shall not be obligated to,
submit all or a portion of such controversy or claim to the foregoing
arbitration proceedings.
-15-
IN WITNESS WHEREOF, Employee and the Company, by a duly authorized officer
of the Company pursuant to the authority of its Board of Directors, have
executed this Employment Agreement at Cleveland, Ohio, as of the day and
year first written above.
OSIRIS THERAPEUTICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name:
Title:
/s/Xxxxx X. Xxxxx
-------------------------------
XXXXX X. XXXXX
-16-
EXHIBIT A
Xxxxx X. Xxxxx
Employment Duties and Responsibilities
President and Chief Executive Officer
l. Conduct the affairs of the Company; interpret and apply the policies of the
Board of Directors.
2. Responsible for all operational staff, technical and financial functions of
the Company. Exercise. senior executive management responsibility
necessary to achieve the business scientific and financial objectives of
the Company.
3. Provide the strategic management of the Company's assets and acquire such
assets needed to grow through internal development product and/or business
acquisition, merger or diversification. Employ the assets of the company
toward increasing shareholder value.
4. Assist the Chairman in developing long-range business and financial
strategies for the company and securing their approval from the Board of
Directors. Work with the Chairman to effectively communicate Company
strategies, policy and results to shareholders, the investment community,
the public, government and industry trade groups.
5. Be the principal executive responsible. for the transfer or creation of
technology and its development into marketable products in close
cooperation with regulatory authorities, collaborators and advisors.
Manage the acquisition of sufficient resources to carry out the Company's
business objectives.
Chairman of the Board
l. Prepares the agenda and presides at regular and special meetings or the
Board of Directors. Appoint all members of the committees of the Board of
Directors, subject to approval by the Board. Serves as chairman of the
company's Executive Committee. Serves as the Chief Strategic Officer and
Chief Public Relations Executive of the Company.
2. Review and approve strategic plans and policy decisions of the President,
to ensure long-term growth and financial viability. Works with senior
management to present such plans and policies to the Board for its approval
and or concurrence.
3. Represent and promote the Company to the investment community and
influential public and industry groups. Be the principal external
spokesperson for the company before stock analysts,
Xxxxx X. Xxxxx - Continued
investors and professional industry groups to ensure that the company's
plans and results are effectively and accurately communicated.
4. Advises and provides counsel to the President and CEO or COO on strategic,
long-range and financial matters. Possesses the same powers as the CEO to
sign all certificates, contracts and other instruments of the corporation,
which are authorized by the board. Exercises all powers and discharges
all of the duties of the CEO in his absence.
5. Presides at all meetings of stockholders and is an ex-officio member of all
Board standing committees.
OSIRIS THERAPEUTICS, INC.
Regenerative Tissue Therapy
OSIRIS
November 28, 1995
Xx. Xxxxx Xxxxxxx
Xxxxxxx Corporate Finance AG
Xxxxxxxxxxxxxx 0,
0000 Xxxxxx
Xxxxxxxxxxx
Dear Xxxxx:
This letter will confirm certain aspects of my salary for 1996 and 1997
and bonus for 1995, as we discussed.
1. My salary will be capped for 1996 and 1997 as we agreed and as I have
presented to the Compensation Committee and the Board.
2. There is no guaranteed bonus in my contract. Any bonus, if granted,
will be at the discretion of the Board.
3. I will forego any bonus for 1995, as you requested.
4. My 1994 bonus will be converted into Series D Preferred Stock, as
well as salary conversion over the next two years, as we discussed,
pending approval by the Compensation Committee and/or Board.
Sincerely,
/s/ Xxxxx X. Xxxxx
..................
Xxxxx X. Xxxxx
President and
Chief Executive Officer
JSB/dr
------------------------------------------------------------------------------
0000 Xxxxxxxxx Xxxxxx-Xxxxxxxxx, Xxxxxxxx 00000-0000 (000) 000-0000
(000)000-0000 FAX
OSIRIS THERAPEUTICS, INC.
BioOrthopaedics for Cartilage, Bone
and Soft Tissue Regeneration
OSIRIS
July 19, 1995
Xx. Xxxxxxx X. Xxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Re: Amendment to Xxxxx X. Xxxxx Employment
Agreement with Osiris Therapeutics, Inc.
Dear Xxxxx:
This letter will reiterate my agreement to the modified terms of my
Employment Agreement as outlined below.
1. During the first two-year renewal term of my Employment Agreement,
commencing January 1, 1996 and ending December 31, 1997 ("First
Renewal Term"), I will continue to serve in the capacity of President
and Chief Executive Officer.
2. I will devote full-time to my duties at Osiris Therapeutics, Inc. and
Gryphon Pharmaceuticals, Inc., except for directorships of other
companies or organizations which do not substantially interfere with
my duties to the Companies.
3. Base compensation during the First Renewal Term shall be $250,000 per
year paid semi-monthly or monthly according to customary Company
payment schedules. Annual merit increases, if any, shall be at the
sole discretion of the Osiris Board.
4. The annual performance bonus available to me of up to 50% of base
compensation shall be determined by the Board of Directors based on
my accomplishment of Board-approved milestones. The annual bonus may
be paid in cash and/or stock of the Company as mutually agreed
between the Board and Employee.
5. Employee benefits shall continue as described in my Employment
Agreement, including continuation of commutation and lodging expenses
from my residence in Connecticut to Baltimore, until such time as I
relocate my Connecticut residence to Maryland.
-------------------------------------------------------------------------------
00000 Xxxxxx Xxxxxx - Xxxxx Xxxxxxxx, Xxxxxx Xxxxx - Xxxxxxxxx, Xxxx 00000
(000) 000-0000 - (000) 000-0000 FAX
Amendment to Employment Agreement Page 2
6. All other provisions of the Employment Agreement including
termination, confidentiality, noncompete, inventions, and stock
vesting shall remain in effect.
Xxxxx, I hope this clarifies the issues discussed by the Compensation
Committee and the Board. In effect, my salary is capped for the next two
years and my bonus is based on the accomplishment of Board-approved
milestones. Any performance bonus will be paid in cash, Osiris stock or a
combination.
Sincerely,
/s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
Agreed to this 19th day of July, 1995:
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
Approved:
--------------------------------
Xxxxxxx X. Xxxxxxx
Chairman, Compensation Committee
