Exhibit 10.5
AMENDED EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is effective as of November 26, 2001
(the "Effective Date"), by and between Keryx (Israel) Ltd., an Israeli company
with it principal place of business at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
91236 (the "Company") and ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (the
"Employee").
Whereas the Company desires to employ the Employee in the position of Chief
Executive Officer and 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 have the title of Chief Executive Officer and President and
shall be responsible for the overall management, direction and leadership of the
Company. He shall report directly to the Board of Directors. 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 Board of
Directors from time to time in its reasonable 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.
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4. Term of Agreement
This Agreement shall take effect from the Effective Date and shall remain in
effect 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 two hundred
and fifty thousand dollars ($250,000), 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. At least once each calendar year, the Employee's annual gross
salary may be increased by an amount to be determined by the
Board of Directors, but in no event shall such increase be less
than the increase in the Israeli Cost of Living Index for the
year each anniversary date.
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.
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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. Professional Expenses: The Company shall reimburse the Employee
for expenses incurred by him in connection with the maintenance
of (a) his medical license in the United States, including, but
not limited to, the costs of any continuing medical education
("CME") required as a condition of such license; and (b)
membership in a reasonable number of professional societies and
organizations.
5.2.5. 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.
5.2.6. Annual Leave and Recreation Pay (Damei Havra'a): The Employee
shall be entitled to thirty (30) working days of paid annual
leave each year. The Employee shall not be allowed to accrue
more than forty (40) working days of annual leave except in
unusual circumstances and with the permission of the Company.
Should the Employee's annual leave balance exceed forty (40)
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.
5.2.7. 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
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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
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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.
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.) Should the Employee's employment be terminated
as a result of his death, the benefits granted in paragraph 6.3,
below, shall be granted instead to his lawful heir or heirs.
6.3. In the event the Employee's employment is terminated (a) by the
Company without cause, or because of his death or disability, or (b)
by the Employee for "just cause", he shall be entitled to continue
to receive his annual salary for eight (8) months following his last
day of actual employment by the Company. Such amount shall be in
addition to any salary he is entitled to receive during or in
consideration for the notice period set forth in paragraph 6.1,
above, and 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.
6.4. 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 8.9 (confidentiality and
non-competition); (b) a material breach by the Employee of any other
provision of this Agreement, which is not cured by
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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; or
(d) any criminal action connected to his employment with the Company
or his place of employment.
6.5. In the event that Employee's employment has been terminated in
accordance with paragraph 6.4, above, the Employee shall not be
entitled to receive any of the severance payments set forth in
paragraphs 5.3.4 and 6.3, above but shall be entitled to receive any
salary or bonus accrued to the date of termination.
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
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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.
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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
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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 any 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:
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Keryx (Israel) Ltd.:
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Employee:
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IN WITNESS WHEREOF the parties have hereunto set their hands at the place and on
the date first above written.
Keryx (Israel) Ltd.
By
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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Chief Operating Officer Employee
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