EMPLOYMENT AGREEMENT
This
Employment Agreement (the “Agreement”) is made as of the 1st
day of
April, 2008 (the “Effective Date”), between Osiris Corporation, Inc., a Delaware
corporation (the “Company”), and Xxxx Xxxxxxx (the “Executive”).
WHEREAS,
the
Company desires to employ the Executive and the Executive desires to be employed
by the Company on the terms contained herein;
NOW,
THEREFORE, in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Term.
The
term of Executive’s employment under this Agreement (the “Term”) shall commence
on the Effective Date and shall continue until terminated in accordance with
Section 4.
2. Position
and Duties.
The
Executive shall serve as Chief Operating Officer, reporting to the President
and
CEO (“CEO”). The Executive shall devote his full working time and efforts to the
business and affairs of the Company. The Executive may serve on other Board
of
directors, with the approval of the CEO, or engage in religious, charitable
or
other community activities as long as such services and activities are disclosed
to the CEO and do not materially interfere with the Executive’s performance of
his duties to the Company as provided in this Agreement.
3. Compensation
and Related Matters.
(a) Base
Salary.
The
Executive’s annual base salary shall be $240,000 subject to the increase (but
not decrease) by the CEO or the Compensation Committee of the CEO (the
“Compensation Committee”). The base salary in effect at any given time is
referred to herein as “Base Salary.” The Base Salary shall be payable in
periodic installments in accordance with the Company’s usual practice for senior
executives.
(b) Quarterly
Bonuses.
The
Executive shall be eligible to receive cash incentive compensation in the form
of a quarterly bonuses based on performance objectives as determined
by the
CEO,
on an annual basis, after consultation with the Executive (the “Quarterly Bonus
Payments”). The aggregate of Executive’s target Quarterly Bonus Payments on an
annualized basis shall be 50% of his Base Salary. The Quarterly Bonus Payments
shall commence with the first full fiscal quarter subsequent to the Effective
Date and shall be paid within 30 days after the end of each fiscal quarter.
(c) Expenses.
The
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder during the Term,
in
accordance with the policies and procedures then in effect and established
by
the Company for its senior executive officers. In addition, the Executive shall
be entitled to receive prompt reimbursement by the Company for all legal fees
and expenses incurred by him in connection with the preparation and negotiation
of this Agreement.
(d) Vacation.
The
Executive shall be entitled to twenty (20) paid vacation days in each calendar
year, which shall be accrued ratably during the calendar year. Business Travel
that takes place over weekends or holidays shall be credited against used
vacation days. The Executive shall also be entitled to all paid holidays given
by the Company to its executives. The Executive may not, without the prior
consent of the CEO, carry forward more than five (5) days of unused
vacation entitlement to a subsequent calendar year. Any vacation entitlement
that has not been used by the end of the calendar year or carried forward to
the
next calendar year shall be forfeited without pay. Upon
termination of the Executive’s employment, for whatever reason, the Executive
shall be entitled to salary in lieu of any accrued but unused vacation.
(e) Other
Benefits.
During
the Term, the Executive shall be entitled to receive benefits under all of
the
Company’s Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide the Executive with benefits at least substantially
equivalent to those provided under such Employee Benefit Plans. As used herein,
the term “Employee Benefit Plans” includes, without limitation, each pension and
retirement plan; supplemental pension, retirement and deferred compensation
plan; savings and profit-sharing plan; stock ownership plan; stock purchase
plan; stock option plan; life insurance plan; medical insurance plan; disability
plan; and health and accident plan or arrangement established and maintained
by
the Company on the date hereof for employees of the same status within the
hierarchy of the Company. During the Term, the Executive shall be entitled
to
participate in or receive benefits under any employee benefit plan or
arrangement which may, in the future, be made available by the Company to its
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plan or
arrangement.
(f) Taxation
of Payments and Benefits.
The
Employer shall undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent that it
reasonably and in good faith believes that it is required to make such
deductions, withholdings and tax reports. Payments under this Agreement shall
be
in amounts net of any such deductions or withholdings. Except as expressly
set
forth in this Agreement, nothing in this Agreement shall be construed to require
the Employer to make any payments to compensate the Executive for any adverse
tax effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.
4. Termination.
The
Executive’s employment hereunder may be terminated without any breach of this
Agreement under the following circumstances:
(a) Death.
The
Executive’s employment hereunder shall terminate upon his death.
(b) Disability.
If the
Executive shall be disabled so as to be unable to perform the essential
functions of the Executive’s then existing position or positions under this
Agreement with or without reasonable accommodation, the CEO may remove the
Executive from any responsibilities and/or reassign the Executive to another
position with the Company for the remainder of the Term or during the period
of
such disability. Notwithstanding any such removal or reassignment, the Executive
shall continue to receive the Executive’s full Base Salary (less any disability
pay or sick pay benefits to which the Executive may be entitled under the
Company’s policies) and benefits (except to the extent that the Executive may be
ineligible for one or more such benefits under applicable plan terms) for six
months. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions
of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Company shall,
submit to the Company a certification in reasonable detail by a physician
selected by the Company to whom the Executive or the Executive’s guardian has no
reasonable objection as to whether the Executive is so disabled or how long
such
disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Company’s determination of such issue shall be
binding on the Executive. Nothing in this Section 4(b) shall be construed
to waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601
et seq.
and the
Americans with Disabilities Act, 42 U.S.C. §12101 et
seq.
(c) Termination
by Company for Cause.
At any
time during the Term, the Company may terminate the Executive’s employment
hereunder for Cause if such termination is approved by the CEO. For purposes
of
this Agreement, “Cause” shall mean: (A) conduct by the Executive
constituting gross negligence or an act of willful misconduct in connection
with
the performance of his duties, including, without limitation, misappropriation
of funds or property of the Company or any of its subsidiaries or affiliates
other than the occasional, customary and de minimis use of Company property
for
personal purposes; (B) the conviction of or pleading nolo
contendere
by the
Executive of any felony involving deceit, dishonesty or fraud, or any conduct
by
the Executive that has resulted in material injury to the Company or any of
its
subsidiaries and affiliates; (C) willful and deliberate non-performance by
the Executive of his duties hereunder which has continued following written
notice of such non-performance from the CEO, provided
however,
Executive shall not be required to perform tasks or duties that, in Executive’s
reasonable and good faith judgment, are contrary to legal or ethical principles
and standards; (D) a breach by the Executive of any of his material
obligations under this Agreement; (E) a material violation by the Executive
of the Company’s employment policies which has continued following written
notice of such violation from the CEO, or (F) willful failure to cooperate
with a bona fide internal investigation or an investigation by regulatory or
law
enforcement authorities, after being instructed by the Company to cooperate,
or
the willful destruction or failure to preserve documents or other materials
known to be relevant to such investigation or the willful inducement of others
to fail to cooperate or to produce documents or other materials. Anything to
the
contrary notwithstanding, (1) the Executive shall not be terminated for “Cause”
within the meaning of clauses (C), (D), (E) or (F) of this subsection (c) unless
written notice stating the basis for termination is provided to the Executive
and he is given thirty (30) days to cure the basis for such claim and, if he
fails to cure such basis, the Executive has an opportunity to be heard in person
before the CEO at a time and venue selected by the CEO.
(d) Termination
Without Cause.
At any
time during the Term, the Company may terminate the Executive’s employment
hereunder without Cause if such termination is approved by the CEO.
(e) Termination
by the Executive Without Good Reason.
At any
time during the Term, the Executive may terminate his employment hereunder
without Good Reason by written notice to the CEO at least thirty (30) days
prior
to such termination. Any such termination shall not constitute a breach of
this
Agreement by the Executive.
2
(f) Notice
of Termination.
Except
for termination as specified in Section 4(a), any termination of the Executive’s
employment by the Company or any such termination by the Executive shall be
communicated by written Notice of Termination to the other party hereto.
(g) Date
of Termination.
“Date
of Termination” shall mean: (A) if the Executive’s employment is terminated
by his death, the date of his death; (B) if the Executive’s employment is
terminated on account of disability under Section 4(b) or by the Company for
Cause under Section 4(c), the date on which Notice of Termination is given;
(C) if the Executive’s employment is terminated by the Company under
Section 4(d), thirty(30) days after the date on which a Notice of
Termination is given; and (D) if the Executive’s employment is terminated
by the Executive under Section 4(e) or Section 4(f), thirty (30) days after
the date on which a Notice of Termination is given.
5. Compensation
Upon Termination.
(a) Termination
Generally.
If the
Executive’s employment with the Company is terminated for any reason during the
Term, the Company shall pay or provide to the Executive (or to his authorized
representative or estate) any earned but unpaid Base Salary, Quarterly Bonus
Payments, prorated up until the Date of Termination, unpaid expense
reimbursements, accrued but unused vacation and any vested benefits the
Executive may have under any employee benefit plan of the Company (the “Accrued
Benefit”) on the Date of Termination.
(b) Termination
by the Company Without Cause..
If the
Executive’s employment is terminated by the Company without Cause as provided in
Section 4(d), then the Company shall, through the Date of Termination, pay
the Executive his Accrued Benefit. In addition,
(i) within
ten (10) days of the Date of Termination, the Company shall pay the Executive
a
lump sum payment equal to the Executive’s annual Base Salary (the “Severance
Amount”),
(ii) all
stock-based and other equity awards held by the Executive shall vest and become
exercisable or nonforfeitable as of the Date of Termination;
(iii) subject
to the Executive’s election to continue health benefits and co-payment of
premium amounts at the active employees’ rate, the Executive shall continue to
participate in the Company’s group health, dental and vision program for
12 months; provided,
however,
that the
continuation of health benefits under this Section 5(b)(iii) shall reduce and
count against the Executive’s rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”);
(iv) anything
in this Agreement to the contrary notwithstanding, if at the time of the
Executive’s termination of employment, the Executive is considered a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue
Code of 1986, as amended (the “Code”), and if any payment that the Executive
becomes entitled to under this Agreement would be considered deferred
compensation subject to interest and additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i)
of the Code, then no such payment shall be payable prior to the date that is
the
earlier of (i) six months after the Executive’s Date of Termination, (ii) the
Executive’s death.
6. Indemnification.
(a) As
a
material inducement to Executive to enter into this Agreement, the Company
and
the Executive have entered into an indemnification agreement (the
“Indemnification Agreement”). A fully executed copy of the Indemnification
Agreement is attached hereto as Exhibit
C.
(b) The
Company shall also use its best efforts to secure judicial approval for the
indemnification of the Executive, to the fullest extent permitted by law, in
the
event of a bankruptcy filing or other court administered reorganization or
liquidation process involving the Company.
3
7. Directors’
and Officers’ Insurance.
(a) During
the Term and for a period of three (3) years thereafter, the Company shall
maintain directors’ and officers’ insurance, which shall include coverage of the
Executive, in an aggregate amount of $7 million, in a form satisfactory to
the
Executive.
(b) Upon
the
cancellation or non-renewal of the insurance described in Section 8(a), the
Company shall purchase a six (6) year reporting tail for such insurance, which
shall include coverage of the Executive, in a form satisfactory to the
Executive.
8. Confidential
Information and Cooperation.
(a) Confidential
Information.
As used
in this Agreement, “Confidential Information” means information belonging to the
Company which is of value to the Company in the course of conducting its
business and the disclosure of which could result in a competitive or other
disadvantage to the Company. Confidential Information includes, without
limitation, financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets; know-how; designs,
processes or formulae; software; market or sales information or plans; customer
lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been
discussed or considered by the management of the Company. Confidential
Information includes information developed by the Executive in the course of
the
Executive’s employment by the Company, as well as other information to which the
Executive may have access in connection with the Executive’s employment.
Confidential Information also includes the confidential information of others
with which the Company has a business relationship. Notwithstanding the
foregoing, Confidential Information does not include information in the public
domain, unless due to breach of the Executive’s duties under Section
10(b).
(b) Confidentiality.
The
Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Company
with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Company and after its termination, the Executive
will keep in confidence and trust all such Confidential Information, and will
not use or disclose any such Confidential Information without the written
consent of the Company, except as may be necessary in the ordinary course of
performing the Executive’s duties to the Company. Anything herein to the
contrary notwithstanding, the provisions of this subsection (b) shall not apply
(i) when disclosure is required by law or by any court, arbitrator, mediator
or
administrative or legislative body (including any committee thereof) with
apparent jurisdiction to order the Executive to disclose or make accessible
any
information, provided that, unless otherwise prohibited by law, the Executive
shall provide Company with prompt notice of any such requested or required
disclosure and shall cooperate in all reasonable respects with the Company
in
any effort by the Company to prevent or otherwise contest such disclosure,
or
(ii) with respect to any other litigation, arbitration or mediation involving
this Agreement, including, but not limited to, the enforcement of this
Agreement.
(c) Documents,
Records, etc.
All
documents, records, data, apparatus, equipment and other physical property,
whether or not pertaining to Confidential Information, which are furnished
to
the Executive by the Company or are produced by the Executive in connection
with
the Executive’s employment will be and remain the sole property of the Company.
The Executive will return to the Company all such materials and property as
and
when requested by the Company. In any event, the Executive will return all
such
materials and property immediately upon termination of the Executive’s
employment for any reason. The Executive will not retain with the Executive
any
such material or property or any copies thereof after such
termination.
(d) Third-Party
Agreements and Rights.
The
Executive hereby confirms that the Executive is not bound by the terms of any
agreement with any previous employer or other party which restricts in any
way
the Executive’s use or disclosure of information or the Executive’s engagement
in any business. The Executive represents to the Company that the Executive’s
execution of this Agreement, the Executive’s employment with the Company and the
performance of the Executive’s proposed duties for the Company will not violate
any obligations the Executive may have to any such previous employer or other
party. In the Executive’s work for the Company, the Executive will not disclose
or make use of any information in violation of any agreements with or rights
of
any such previous employer or other party, and the Executive will not bring
to
the premises of the Company any copies or other tangible embodiments of
non-public information belonging to or obtained from any such previous
employment or other party.
4
(e) Litigation
and Regulatory Cooperation.
During
and after the Executive’s employment, upon reasonable notice adding normal
business hours, the Executive shall cooperate fully with the Company in the
defense or prosecution of any claims or actions now in existence or which may
be
brought in the future against or on behalf of the Company which relate to events
or occurrences that transpired while the Executive was employed by the Company.
The Executive’s cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. During and after the Executive’s employment, the
Executive also shall cooperate fully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority
as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Company. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred
in
connection with the Executive’s performance of obligations pursuant to this
Section 10(e). Such expenses shall include, but not limited to, travel costs
consistent with the Company’s travel reimbursement policy then in effect, and
legal fees to the extent that the Executive believes that there is or will
be a
conflict between his interests and the interests of the Company in connection
with the matter about which the Company has requested cooperation and that,
therefore, separate representation is warranted. In addition, following the
Term, for all time the Executive expends in cooperating pursuant to this Section
10(e), the Company shall compensate Executive at the rate of $145 per hour,
provided,
however, Executive’s
right to compensation shall not apply to time spent in activities that could
have been compelled pursuant to a subpoena, including testimony and related
attendance at depositions, hearings or trials. The Executive’s entitlement to
reimbursement of such expenses, including legal fees, shall in no way limit
or
affect the Executive’s rights to be indemnified and/or advanced expenses in
accordance with the Company’s corporate documents, the Company’s insurance
policies, as referenced in Section 8, and/or in accordance with the
Indemnification Agreement referenced in Section 7
9. Consent
to Jurisdiction.
The
parties hereby consent to the jurisdiction of the United States District Court
for the Southern District of New York. Accordingly, with respect to any such
court action, the Employer and the Executive (a) submit to the personal
jurisdiction of such courts; (b) consent to service of process; and (c) waive
any other requirement (whether imposed by statute, rule of court, or otherwise)
with respect to personal jurisdiction or service of process.
10. Resolution
of Disputes.
Any
claim or controversy arising out of or relating to this Agreement or the
Executive's employment with the Company or the termination thereof (including,
without limitation, any claims of unlawful employment discrimination whether
based on age or otherwise) (collectively, "Covered Claims") shall, to the
fullest extent provided by law, be resolved by binding arbitration to be held,
unless otherwise agreed, in Boston, Massachusetts under the auspices of the
American Arbitration Association (“AAA”), in accordance with the National Rules
for the Resolution of Employment Disputes including, but not limited to, the
rules and procedures applicable to the selection of arbitrators. In the event
that any person or entity other than the Executive or the Company may be a
party
with regard to any such controversy or claim, such controversy or claim, to
the
extent involving such third party, shall be submitted to arbitration subject
to
such other person or entity’s agreement. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. This
Section 12 shall be specifically enforceable.
11. Entire
Agreement and Binding Effect.
This
Agreement, the Escrow Agreement between the Company and Executive, a copy of
which is attached hereto as Exhibit A, the Indemnification Agreement between
the
Company and Executive, a copy of which is attached hereto as Exhibit C, and
each
equity-related agreement executed by each of the Company and Executive as of
the
date hereof, contain the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior communications, agreements and
understandings, written or oral, and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, permitted assigns
and legal representatives. Moreover, the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to
all or substantially all of the business or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession
had
taken place. Notwithstanding the foregoing, nothing in this Agreement shall
be
construed to affect Executive’s rights to equity compensation pursuant to
applicable plans and agreements.
12. Enforceability.
If any
portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent
be
declared illegal or unenforceable by a court of competent jurisdiction, then
the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
13. Waiver.
No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
5
14. 409A.
All
benefits and payments to the Executive hereunder are intended to be in
accordance with Section 409A of the Code, and the Company shall have the right,
acting reasonably, in good faith and upon prior notice to the Executive and/or
when requested by the Executive, to amend or modify this Agreement, but only
to
the extent necessary to avoid the imposition of additional taxes, penalties
and
interest under such Section 409A; provided that such amendment or modification
substantially preserves the value to the Executive of the affected benefit
or
payment.
15. Notices.
Any
notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent
by a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Company or, in the case
of
the Company, at its main offices, attention of the CEO.
16. Amendment.
This
Agreement may be amended or modified only by a written instrument signed by
the
Executive and by a duly authorized representative of the Company.
17. Governing
Law.
This is
a Massachusetts contract and shall be construed under and be governed in all
respects by the laws of the Commonwealth of Massachusetts, without giving effect
to the conflict of laws principles of such Commonwealth. With respect to any
disputes concerning federal law, such disputes shall be determined in accordance
with the law as it would be interpreted and applied by the United States Court
of Appeals for the First Circuit.
18. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement effective on the date and year first above
written.
|
OSIRIS
CORPORATION
By:
/s/
XXXXXX X. XXXXXX
Its:
President
and CEO
/s/
XXXX XXXXXXX
Xxxx
Xxxxxxx
|
6
