EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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This employment agreement (the "Agreement") is effective as of July 15, 1999
(the "Effective Date"), by and between B.R.T. Biopharmaceuticals, Ltd., an
Israeli company with it principal place of business at Sha'arei Ha'ir, 216 Jaffa
Road, Jerusalem (the "Company") and Xxxxxxxx Xxxx, of Xxxxx Xxxxx 0, Xxxxxxxxx
(the "Employee").
Whereas the Company desires to employ the Employee in the position of President
(the "Position");
Whereas the Employee desires to be employed by the Company and fulfill the
responsibilities of the Position; and
Whereas the parties desire to set forth the conditions of employment pursuant to
which the Employee will be employed by the Company;
It is hereby agreed by and between the parties as follows:
1. Preamble
The preamble to this Agreement and any attachments thereto are an integral part
of this Agreement.
2. Job Description
The Employee shall be responsible for working with the Chief Executive Officer
to promote the research and development and business development activities of
the Company. He shall report directly to the Chief Executive Officer. The
description of responsibilities set forth herein shall serve as a general
statement of the duties, responsibilities and authority of the Employee.
Additional duties, responsibilities and authority may be assigned to the
Employee by the Chief Executive Officer from time to time in his discretion.
3. Working Hours
The Employee shall be employed by the Company on a full-time basis, namely for
not less than forty-four (44) hours per week (inclusive of meal time). The
Employee agrees that his position is considered to be a management position as
defined in the Hours of Work and Rest Law - 1951, which requires a special
measure of personal trust. Accordingly, the provisions of the Hours of Work and
Rest Law - 1951 shall not apply and the Employee shall not be entitled to
receive any additional payment for his work other than those that are set forth
in this Agreement.
4. Term of Agreement
This Agreement shall take effect from the Effective Date and shall remain in
effect through the third anniversary of such date, unless it is earlier
terminated as hereinafter provided.
5. Annual Salary
5.1. The Employee's annual salary shall be as follows:
5.1.1. The Employee shall receive an annual gross salary of one
hundred and fifty thousand dollars ($150,000), payable
in New Israeli Shekels according the representative rate
of exchange in effect each month at the time Company
salaries are calculated. The Employees salary shall be
paid in twelve equal installments, monthly in arrears.
5.1.2. On each anniversary date of this Agreement, the
Employee's annual gross salary shall be increased by an
amount to be determined by the Board of Directors and
the Chief Executive Officer.
5.1.3 The salary set forth in paragraph 5.1.1, above, shall be
referred to as the "Global Salary". The linkage of the
Global Salary to the United States dollar is in lieu of
any generally-applicable increases, whether the
statutory cost of living increase ("Tosefet Yoker") or
any other industry-wide increase applicable as the
result of collective bargaining agreements or other
order of the Ministry of Labor and Welfare (such as
Tzavei Harhava). By signing this Agreement and accepting
employment pursuant to its terms, the Employee
represents that s/he will not claim any such increase.
5.1.4. The Employee shall not be entitled to receive from the
Company any salary or payment of any kind other than the
Global Salary and other payments specifically set forth
in this Agreement or properly authorized by the Board of
Directors and, should the Employee be a director of the
Company at the time such other payments not specifically
included in this Agreement are made, by the shareholders
of the Company.
5.2. Other Terms of Employment
5.2.1. Bonuses: The Employee shall be eligible to receive one
or more bonuses during any calendar year in the
discretion of the Chief Executive Officer, acting in
consultation with the Board of Directors.
5.2.2. Expenses: The Employee shall be entitled, in accordance
with the Company's standard policy in effect from time
to time, to be reimbursed for expenses (Hotza'ot Eshel)
incurred in Israel and abroad in connection with Company
business against receipt by the Company of appropriate
vouchers, receipts or other proof of the Employee's
expenditures.
5.2.3. Continuing Education Fund: The Employee shall be
entitled to participate in the Company's continuing
education fund (Keren Hishtalmut). The Company shall
contribute an amount equal to five percent (5%) of the
Employee's Global Salary and shall deduct two and a half
percent (2.5%) of the Employee's Global Salary and
transfer it as the Employee's contribution. The Employee
consents to the deduction of this amount as his
contribution to the continuing education fund. These
contributions will be calculated up to the permissible
tax-exempt salary ceiling according to the income tax
regulations in effect from time to time. If the amount
of the Company's contribution is greater than permitted
by those regulations, the Employee shall not have the
right to receive the excess amount.
5.2.4. Reserve Duty: The Employee shall be entitled to receive
his full Global Salary and other payments while
performing reserve duty, provided that any amount
received by the Employee from the I.D.F. or any other
source (excluding Damei Calcala) is transferred to the
Company or, in the alternative, an amount equal to that
received from the I.D.F. or any other source is deducted
from the Global Salary payable to the Employee.
5.2.5. Annual Leave and Recreation Pay (Damei Havra'a): The
Employee shall be entitled to fifteen (15) working days
of paid annual leave each year. The Employee shall not
be allowed to accrue more than thirty (30) working days
of annual leave except in unusual circumstances and with
the permission of the Company. Should the Employee's
annual leave balance exceed thirty (30) days at the end
of any calendar year, the excess number of days shall be
paid out in accordance with the provisions of the Annual
Leave Law - 1951. The Company shall also pay the
Employee for five (5) days of recreation (damei havra'a)
each year in accordance with the law and the normal
practice of the Company in effect from time to time.
5.2.6. Sickness and Disability Insurance: The Employee shall be
entitled to the number of days for sick leave permitted
by law. Compensation for sick days utilized shall be
paid according to his Global Salary only upon the
presentation of medical documentation as required by the
Company. The Employee shall be covered by disability
insurance that provides monthly compensation. The cost
of such insurance shall be borne by the Company.
Notwithstanding the foregoing, the Employee shall not be
entitled to receive compensation for sick leave if such
compensation is covered by the Employee's disability
insurance referred to above. However, should the amounts
received by the Employee pursuant to such disability
insurance be less than the amount that is properly
payable as compensation for the Employee's available
sick leave, according to the Global Salary, the Company
shall pay the difference. It is understood and agreed
that unused sick leave cannot be redeemed by the
Employee. For the avoidance of doubt, it is understood
and agreed that the payments made by the Company in
consideration of sick leave covers all obligations of
the Company pursuant to the Sick Leave Law - 1976.
5.3. Pension Benefits and Severance Payments
5.3.1. The Company will pay into a Provident Fund (Kupat Gemel)
(in the meaning of paragraph 47 of the Income Tax
Ordinance) in the form of Manager's Insurance or another
form according to the Employee's choice and the
Company's agreement, an amount equal to thirteen and one
third percent (13 1/3%) from the monthly Global Salary
paid to the Employee, and the Employee will pay, on his
own account, an amount equal to five percent (5%) from
that Global Salary. The Employee agrees that the Company
shall be entitled to deduct the Employee's contribution
(5%) from the Employee's salary. For the avoidance of
doubt, it is clarified that under no circumstance shall
the Company's contribution exceed thirteen and one third
percent (13 1/3%) of the Global Salary in any one
month.
5.3.2. Five percent (5%) of the thirteen and one third percent
(13 1/3%) that the Company contributes as set
forth above and the five percent (5%) the Employee
contributes, together with linkage and interest on the
contributions, will be treated as pension benefits for
the Employee or his survivors. The remaining eight and
one third percent (8 1/3%) of the Company's
contribution, together with linkage and interest on that
portion, will be utilized to pay severance benefits to
the Employee or his descendants in the event of the
termination of his employment with the Company, except
in those circumstances discussed below.
5.3.3. In the event that the Employee chooses Manager's
Insurance, the policy shall belong to the Company as
long as it employs the Employee and it makes the
required payments on the policy. The payments made into
the Kupat Gemel pursuant to paragraph 5.3.1, above,
shall fulfill the Company's obligation for severance
payment pursuant to the Severance Compensation Law -
1963. Upon the termination of the Employee's employment,
for whatever reason, and upon his final departure from
the Company, the Employee or his descendants shall be
entitled to receive the ownership of all rights which
have accrued on his behalf in the Kupat Gemel or
the ownership of the Manager's
Insurance policy, as appropriate and subject to the
provisions of section 6, below.
5.3.4. In the event that there is a difference in the
Employee's favor between the amount to which he is
entitled to receive pursuant to the Severance
Compensation Law - 1963 and the severance payment amount
(including linkage and interest) that is in the Kupat
Gemel or Manager's Insurance policy, the Company shall
pay that difference. The Company shall be obligated to
pay such difference whether the termination of the
Employee's employment is at the Employee's initiative or
the Company's, except in the case of termination
pursuant to paragraphs 6.3 and 6.4, below. For the
avoidance of doubt, it is understood that in the event
that the severance payment amount (including linkage and
interest) that is in the Employee's Kupat Gemel or
Manager's Insurance policy exceeds the amount to which
he is entitled to receive as severance compensation
pursuant to the Severance Compensation Law - 1963, the
difference shall not be transferred to the Employee,
including to his pension account, but shall be the
property of the Company.
6. Termination of Employment
6.1. Either party may terminate the Employee's employment with the
Company without cause at any time upon three (3) month's notice.
The Company shall have the right, in its sole discretion, to
require the Employee to continue working for the Company during
the notice period. If the Employer terminates the Employee
without cause pursuant to this section, the Board of Directors
shall take the necessary steps so that (a) any outstanding, but
unvested, options granted to the Employee shall vest upon the
effective date of his termination; and (b) the period during
which the Employee shall be permitted to exercise such options
shall be extended to two (2) years from the effective date of
his termination as defined in the Share Option Plan governing
the options in question.
6.2. The Employee's employment shall be terminated by his death or
disability. (For purposes of this section, "disability" shall be
deemed to have occurred if the Employee is unable, due to any
physical or mental disease or condition, to perform his normal
duties of employment for 120 consecutive days or 180 days in any
twelve month period.) In such an event, he shall be entitled to
continue to receive his annual salary for three (3) months
following his last day of actual employment by the Company. Such
amount shall be in addition to any severance payment he is
entitled to receive according the provisions of the Severance
Compensation Law - 1963. In addition, the Board of Directors
shall take the necessary steps so that (a) any outstanding, but
unvested, options granted to the Employee shall vest upon the
effective date of his termination; and (b) the period during
which the Employee shall be permitted to exercise such options
shall be extended to two (2) years from the effective date of
his termination as defined in the Share Option Plan governing
the options in question. Should the Employee's employment be
terminated as a
result of his death, the benefits granted herein, shall be
granted instead to his lawful heir or heirs.
6.3. Notwithstanding the foregoing, the Company may terminate the
Employee immediately and without prior notice in the following
circumstances: (a) a material breach of the Employee's
obligations pursuant to paragraphs 8.8, 8.9 and 8.10
(confidentiality and non-competition); (b) a material breach by
[lie Employee of any other provision of this Agreement, which is
not cured by the Employee within fifteen (15) days after
receiving notice thereof from the Company containing a
description of the breach or breaches alleged to have occurred;
(c) the habitual neglect or gross failure by the Employee to
adequately perform the duties of his position; (d) any act of
moral turpitude or criminal action connected to his employment
with the Company or his place of employment; or (e) the
Employee's refusal to comply with or his violation of lawful
instructions of the Chief Executive Officer or the Board of
Directors.
6.4. In the event that Employee's employment has been terminated in
accordance with paragraph 6.3, above, the Employee shall not be
entitled to receive am of the severance payments set forth in
paragraphs 5.3.4 and 6.2, above.
7. Taxes and Other Payments
7.1. Unless otherwise specifically provided for in this Agreement,
the Company shall not be liable for the payment of taxes or
other payments for which the Employee is responsible as result
of this Agreement or any other legal provision, and the Employee
shall be personally liable for such taxes and other payments.
7.2. The Employee hereby agrees that the Company shall deduct from
his Global Salary the Employee's national insurance fees, income
tax and other amounts required by law or the terms of this
Agreement. The Company shall provide the Employee with
documentation of such deductions.
8. The Obligations of the Employee
8.1. The Employee agrees to devote his entire business time, energy,
abilities and experience to the performance of his duties,
effectively and in good faith.
8.2. During the period of his employment, the Employee shall not be
employed, whether or not during regular business hours, for pay
by any other party other than the Company, except for teaching
activities approved by the Chief Executive Officer. The Employee
must receive the prior written consent of the Company before
assuming an unpaid position outside the Company. Notwithstanding
the foregoing, the Employee may, with the written permission of
the Chairman of the Board of Directors, become a member of the
Board of Directors of another company and may accept any
compensation in connection with such position.
8.3. The Employee agrees to immediately inform the Company of any
Company issue or transaction in which the Employee has a direct
or indirect personal interest and/or where such issue or
transaction could cause a conflict of interest for the Employee
in the fulfillment of his responsibilities as an employee of the
Company.
8.4. The Employee hereby gives irrevocable instructions and
permission to the Company to deduct from any amounts owed to the
Employee by the Company, including amounts payable as severance
compensation, (a) any debt he has or will have to the Company;
and/or (b) any amount that was wrongfully or mistakenly paid to
him by the Company. Any such amounts to be deducted shall be
calculated in real terms as of the date of the deduction,
including linkage to cost of living index.
8.5. The Company may at its discretion and at any time apply for and
procure as owner and for its own benefit and at its own expense,
insurance on the life of the Employee ("Key Man Life Insurance")
in such amounts and in such form or forms as the Company may
choose. The Employee shall cooperate with the Company in
procuring such insurance and shall, at the Company's request,
submit to such medical examinations, supply such information and
execute such documents as may be required by the insurance
company or companies to whom the Company has applied for such
insurance. Neither the Employee nor any of his dependents shall
have any interest whatsoever in any such policy or policies, or
in the proceeds thereof.
8.6. The Employee declares that the terms and conditions of his
employment are personal and confidential and will not be
disclosed by him.
8.7. The Employee declares that he is free to enter into this
Agreement and that he has no obligations of any kind to any
third party that would impair this Agreement, either as an
employee or an independent contractor. The Employee further
declares that as long as he remains an employee of the Company,
he will not incur any such obligations.
8.8. The Employee agrees to keep confidential (a) all professional,
scientific, commercial, and business information; and (b) any
other information or document that comes to the Employee's
knowledge in connection with the affairs of the Company
(collectively, the "Confidential Information"), and agrees not
to use or exploit the Confidential Information or to disclose it
to any third party where such use, exploitation or disclosure in
not directly related to the affairs of the Company, unless the
Company gives prior written authorization of such disclosure.
8.9. The Employees agrees that during his employment by the Company
and thereafter he (a) will not disseminate or otherwise make use
of the Confidential Information or of other non-public
information of which he learned while working for the Company,
except where such dissemination or use is directly related to
the affairs of the Company; (b) will maintain the
confidentiality of the Confidential Information; and (c) will
not in any way act to injure the reputation of the Company or
any of its affiliated companies.
8.10 The Employee understands and recognizes that his services to the
Company are special and unique. Therefore, he agrees that during
the term of this Agreement and for one (1) year after the
termination for any reason of his employment, he shall not be
employed in or give any services to any business or third party
that competes with the Company or whose activities conflict with
the activities of the Company, unless the Chairman of the Board
of Directors has given his explicit written consent prior the
commencement of such employment or the giving of such services.
8.11. Upon termination of his employment, the Employee agrees to
assist the Company with an orderly transition of his
responsibilities and to return to the Company any documents,
information and/or materials that were given to him or which
were created by him in connection with his employment.
9. Intellectual Property Rights
9.1. The Employee declares that he is aware that anything that is
done by him in the Company or in connection with the Company,
whether it be an invention, a discovery, or the development of
an idea or a thing, all within the framework of the Company's
business (the "Development") shall belong to and be controlled
by the Company, unless the Board of Directors shall, in writing,
direct otherwise.
9.2. The Company shall have the right to fully utilize and exploit
the Development, as it sees fit, including changing it,
registering part or all of it as a patent, whether in Israel or
abroad, selling it, transferring it to a third party, all
without being required to either receive the Employee's consent
or pay the Employee any additional payment for such Development
apart from any payment he receives pursuant to this Agreement.
9.3. The Development and any subsequent intellectual property arising
therefrom shall remain the sole property of the Employer even
after the Employee's employment terminates for any reason. The
termination of this Agreement, whether due to its breach or its
own terms, shall not impair the Company's exclusive rights in
the Development. Notwithstanding the termination of this
Agreement, the Board of Directors shall have the discretion to
award the Employee a cash payment in accordance with the terms
of paragraph 5.2.1, above, as a result of any Development or
subsequent intellectual property arising therefrom developed
primarily by the Employee.
9.4. The Employee may not do anything with the Development or any
related materials without the knowledge and prior consent of the
Company. The Employee declares that he neither has nor will have
any rights in the Development or its fruits and that all rights
to the Development and its fruits shall fully reside in the
Company.
9.5. Even in the event that at the time of the termination of the
Employee's employment for any reason the Development has not
been completed, the Employee shall be prohibited from any
continued activity in connection with
the subject of the Development, alone or in concert with others
that is not explicitly allowed in writing by the Company. The
Company alone will be the sole owner of the uncompleted
Development and shall have the sole right to complete the
Development or to take any other action in connection with the
Development.
10. Indemnification
The Company shall take whatever steps are necessary to establish a policy of
indemnifying its officers, including, but not limited to the Employee, for all
actions taken in good faith in pursuit of their duties and obligations to the
Company. Such steps shall include, but shall not necessarily be limited to, the
obtaining of an appropriate level of Directors and Officers Liability coverage.
11. General
11.1. It is agreed that the provisions of this Agreement represent the
full scope of the agreement between the parties and that neither
side shall be bound by any promises, declarations, exhibits,
agreements or obligations, oral or written, that are not
included in this Agreement prior to its execution. Any changes
or amendments to this Agreement must be in writing and signed by
both parties.
11.2. This Agreement shall be governed by, and construed and
interpreted under, the laws of the State of Israel. The parties
agree that any legal claim lodged by one party against the other
arising from the terms of this Agreement shall be adjudicated
only by the appropriate court in Jerusalem, Israel.
11.3. If any provision of this Agreement shall be declared by a court
of competent jurisdiction to be invalid, illegal or incapable of
being enforced in whole or in part, the remaining conditions and
provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable, and no provision shall be
deemed dependent upon any other covenant or provision unless so
expressed herein.
11.4. The rights, benefits, duties and obligations under this
Agreement shall inure to, and be binding upon, the Company, its
successors and assigns, and upon the Employee and his legal
representatives. This Agreement constitutes a personal service
agreement, and the performance of the Employee's obligations
hereunder may not be transferred or assigned by the Employee.
11.5 The failure of either party to insist upon the strict
performance of any of the terms, conditions and provisions of
this Agreement shall not be construed as a waiver or
relinquishment of future compliance therewith or with any other
term, condition or provision hereof, and said terms, conditions
and provisions shall remain in full force and effect. No waiver
of any term or condition of this Agreement on the part of either
party shall be effective or ally purpose whatsoever unless such
waiver is in writing and signed by such party.
11.6 The headings of Sections are inserted for convenience and shall
not affect any interpretation of this Agreement.
12. Notices
12.1. A notice that is sent by registered mail to a party at its
address as set forth in paragraph 12.2, below, shall be deemed
received three (3) days after its posting, and the receipt
stamped by the post office shall represent definitive evidence
of the date of mailing.
12.2. The addresses of the parties for the purposes of this Agreement
are:
Xxxxxx Ltd.:
000 Xxxxx Xxxx
Xxxxxxxxx 00000
Employee:
Rehov Zelda I
Jerusalem
IN WITNESS WHEREOF the parties have hereunto set their hands at the place and on
the date first above written.
B.R.T. Biopharmaceuticals, Ltd.
By
/s/ Xxxxxx Xxxxxxxxxxxx /s/ Xxxxxxxx Xxxx
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Secretary Employee
