Exhibit 10.31
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is effective as of October 15, 2001
(the "Effective Date"), by and between Keryx Biomedical Technologies Ltd., an
Israeli company with it principal place of business at Kiryat Mada 5, Jerusalem
(the "Company") and Rony Seger, I.D. No. ____________, of
__________________________________ (the "Employee").
Whereas the Company desires to to employ the Employee in the position of Chief
Scientific Officer (the "Position");
Whereas the Employee desires to accept employment by the Company and to fulfill
the responsibilities of the Position; and
Whereas the parties desire to set forth the conditions of employment pursuant to
which the Company will employ the Employee;
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 the scientific direction and 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 mealtime). 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 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. 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.
5.1.3. 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 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
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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 twenty (20) 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.
5.2.7. Automobile Maintenance: The Employee shall be entitled
to receive a monthly amount of the New Israeli Shekel
equivalent of fourteen thousand four hundred ($14,400)
to reimburse him for the upkeep and
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maintenance entailed in the use of his personal
automobile for business purposes.
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
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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 90 consecutive days or 120 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
the 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 any of the severance payments set forth in
paragraphs 5.3.4 and 6.2, above.
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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. Keryx shall not require the Employee to act on its behalf in any
manner that would represent a conflict between the interests of
Keryx, on one hand, and the Weizmann Institute, on the other
hand. Such acts shall include, but not be limited to, the
carrying out of research for Keryx that overlaps or continues
research he has carried out at the Weizmann Institute as of the
date of this Agreement; the evaluation of technology belonging
to the Weizmann Institute that Keryx is interested in licensing;
and conducting negotiations on Keryx's behalf with the Weizmann
Institute in connection with technology belonging to the
Weizmann Institute that Keryx is interested in licensing.
8.3 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. 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.
8.4. 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.
8.5. 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
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be deducted shall be calculated in real terms as of the date of
the deduction, including linkage to cost of living index.
8.6. 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.
8.7. The Employee declares that the terms and conditions of his
employment are personal and confidential and will not be
disclosed by him.
8.8. 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.
8.9. 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.
Nothing in the foregoing shall be construed to prevent the
Employee from disclosing or using any information which the
Employee can show by written documentation was in the public
domain or enters into the public domain through no improper act
on the Employee's part or on the part of any of the Company's
employees or was in his possession prior to his joining the
Company or disclosed to the Employee after he has left the
Company on a non-confidential basis by a person authorized to do
so. The Employee agrees immediately to return all such material
and reproductions in his possession to the Company upon request
and in any event upon termination of employment.
8.10. 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.
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8.11. The Employee understands and recognizes that his services to the
Company are special and unique and agrees that, during the term
of this Agreement, and for a period of 12 months from the date
of termination of his employment hereunder, he shall not in any
manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other
business entity ("Person"), enter into or engage in any business
directly competitive with the Company's business, either as an
individual for his own account, or as a partner, joint venturer,
employee, agent, consultant, salesperson, officer, director or
shareholder of a Person operating or intending to operate within
the area that the Company is, at the date of termination,
conducting its business (the "Restricted Businesses"); provided,
however, that nothing herein will preclude the Employee from
holding one percent (1%) or less of the stock of any publicly
traded company or from holding a position with a Person who does
not engage in a business directly competitive with the
Restrictive Businesses so long as the Employee works in a
division of such Person which carries on a bona fide business
which is not directly competitive with the Restricted
Businesses.
8.12. For a period of 12 months after the termination of this
Agreement, the Employee shall not interfere with or disrupt or
attempt to disrupt the Company's business relationship with any
of its partners, customers or suppliers.
8.13. During the term of this Agreement, and for 12 months thereafter,
the Employee shall not, directly or indirectly, without the
prior written consent of the Company:
(a) solicit or induce any employee of the Company or any
affiliated company to leave the employ of the Company or any
affiliated company or hire for any purpose any employee of the
Company or any affiliated company or any employee who has left
the employment of the Company or any affiliated company within
six months of the termination of said employee's employment with
the Company or any affiliated company; or
(b) solicit or accept employment or be retained by any
party who, at any time during the term of this Agreement, was a
customer or supplier of the Company or any affiliated company
where his position will be related to the business of the
Company or any affiliated company; or
(c) solicit or accept the business of any customer or
supplier of Keryx or any Affiliate with respect to products
similar to those supplied by Keryx.
8.14 In the event that the Employee breaches any provisions of
paragraphs 8.11, 8.12 and/or 8.13, or there is a threatened
breach, then, in addition to any other rights which the Company
may have, the Company shall be entitled, without the posting of
a bond or other security, to injunctive relief to enforce the
restrictions contained herein. In the event that an actual
proceeding is brought in equity to enforce these provisions, the
Employee shall not argue
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as a defense that there is an adequate remedy at law nor shall
the Company be prevented from seeking any other remedies that
may be available.
8.15. 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
The provisions of Section 7 of the agreement executed on August __, 2001,
between the Employee and Keryx Biopharmaceuticals, Inc. are hereby incorporated
by reference and shall govern the intellectual property rights and obligations
the Employee and the Company.
10. Indemnification
The Company, or its parent company, and the Employee shall execute an agreement
that provides for the indemnification of the Company's officers and directors.
In addition, the Company, or its parent company, shall maintain an appropriate
level of Directors and Officers Liability coverage, which coverage shall include
the Employee.
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.
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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:
Keryx Biomedical Technologies Ltd.:
Kiryat Mada 5
Jerusalem 91236
Employee:
IN WITNESS WHEREOF the parties have hereunto set their hands at the place and on
the date first above written.
Keryx Biomedical Technologies Ltd.
By
/s/ Ira Weinstein /s/ Rony Seger
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Chief Operating Officer Employee
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