Exhibit 10.1
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT is entered into by and between Orthovita, Inc., a
Pennsylvania corporation having its principal offices in Malvern,
PA (the “Company”), and Antony Koblish (the
“Executive”).
WHEREAS, the Company and the
Executive originally entered into an Employment Agreement effective
as of April 30, 2007 (the “Original Agreement”) in
connection with the Executive’s employment as the
Company’s Chief Executive Officer;
WHEREAS, the Company and the
Executive desire to amend the Original Agreement effective as of
December 15, 2008 solely in order to comply with
Section 409A of the Internal Revenue Code of 1986, as amended,
and regulations issued thereunder (the Original Agreement, as
amended and restated herein, is referred to as the
“Agreement”);
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants and agreements hereinafter
set forth, the Company and the Executive hereby agree that the
Agreement is amended and restated in its entirety to read as
follows:
1. Employment .
(a) Term . The initial term
of this Agreement shall begin as of April 30, 2007 (the
“Effective Date”) and shall continue for two years
until April 30, 2009, unless sooner terminated by either party
as hereinafter provided. In addition, the term of this Agreement
shall automatically renew for periods of one year unless either
party gives written notice to the other party at least 180 days
prior to the end of the Term or at least 180 days prior to the end
of any one-year renewal period that the Agreement shall not be
further extended; provided, however, that if a Change of Control
(as defined below) shall occur during the Term, the Term shall
expire no earlier than 12 months beyond the month in which the
Change of Control occurred. The period commencing on the Effective
Date and ending on the date on which the term of the
Executive’s employment under the Agreement terminates is
referred to herein as the “Term.” In no event shall the
expiration of this Agreement be deemed, in and of itself, a
termination of the Executive’s employment for purposes of
this Agreement, including a termination without Cause for purposes
of Section 8.
(b) Duties .
(i) The Executive shall serve as the
Chief Executive Officer of the Company with duties,
responsibilities and authority commensurate therewith and shall
report to the Chief Executive Officer. The Executive shall perform
all duties and accept all responsibilities incident to such
position as may be reasonably assigned to him by the Chief
Executive Officer.
(ii) The Executive represents to the
Company that he is not subject to or a party to any employment
agreement, non-competition covenant, understanding or restriction
which would be breached by or prohibit the Executive from executing
this Agreement and performing fully his duties and responsibilities
hereunder.
(c) Best Efforts . During the
Term, the Executive shall devote his best efforts and full time and
attention to promote the business and affairs of the Company and
its affiliated entities, and shall be engaged in other business
activities only to the extent that such activities do not
materially interfere or conflict with the Executive’s
obligations to the Company hereunder, including, without
limitation, obligations pursuant to Section 15 below. The
foregoing also shall not be construed as preventing the Executive
from (1) serving on civic, educational, philanthropic or
charitable boards or committees, or, with the prior written consent
of the Board of Directors of the Company (the “Board”),
in its sole discretion, on corporate boards, and (2) managing
personal investments, so long as such activities are permitted
under the Company’s Code of Conduct and employment policies.
Notwithstanding any provision of this Section 1 of the
Agreement to the contrary, in no event shall the Executive invest
in any business competitive with the Company or that would
otherwise violate the provisions of Section 15 below (other
than as a shareholder of less than 1% of a publicly traded
company).
2. Base Salary and Bonus
.
(a) During the Term, for all of the
services rendered by the Executive hereunder, the Company shall pay
Executive a base salary (“Base Salary”), at the initial
annual rate of $310,000, payable in installments at such times as
the Company customarily pays its other employees. The
Executive’s Base Salary shall be reviewed periodically by the
Board (or a committee of the Board) pursuant to the Board’s
normal performance review policies for senior level
executives.
(b) In addition, during the Term,
the Executive shall be eligible to receive an annual bonus based on
the attainment of individual and corporate performance goals and
targets, as determined by the Board (or a Board committee), in its
sole discretion, as of the beginning of each fiscal year. The
target bonus for the Executive for any calendar year during the
Term shall be as established by the Board or Board committee,
provided, however that the Executive’s target bonus
opportunity shall be based on not less than 65% of the
Executive’s Base Salary in effect for such calendar year.
Promptly after receipt of the financial or other information on
which the performance goals are based after the end of the fiscal
year, the Board (or Board committee) shall review actual
performance against the applicable performance goals and targets
and shall notify the Executive of the amount of the
Executive’s bonus, if any. The Executive’s bonus shall
be paid to him after the end of the fiscal year to which it
relates, at the same time and under the same terms and conditions
as other executives of the Company; provided that in no event shall
the Executive’s bonus be paid later than March 15 of the
calendar year following the fiscal year for which it was
earned.
3. Retirement and Welfare
Benefits . The Executive shall be eligible to participate in
the Company’s health, life insurance, long and short-term
disability, dental, retirement, savings and medical programs,
directors and officers liability insurance and other benefit plans
or programs generally made available to other senior level
executive officers of the Company, if any, pursuant to their
respective terms and conditions. In addition, the Executive shall
be eligible to participate in any long-term equity incentive
programs (including the Company’s 1997 Equity Compensation
Plan and any successor plan) established by the Company for its
senior level
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executives generally at levels determined by the
Board (or a Board committee) in its sole discretion, commensurate
with the Executive’s position as Chief Executive Officer
. Nothing in this Agreement shall preclude the Company or
any affiliate of the Company from terminating or amending any
employee benefit plan or program from time to time after the
Effective Date.
4. Vacation . The Executive
shall be entitled to vacation, holiday and sick leave at levels
commensurate with those provided to other senior executive officers
of the Company, in accordance with the Company’s vacation,
holiday and other pay for time not worked policies.
5. Automobile. During the
Company’s 2007 fiscal year, the Company shall pay the
Executive a monthly car allowance equal to $900 per month, which
amount shall be grossed up for taxes at the end of each fiscal
year. This allowance is subject to review and adjustment by the
Board or Board committee from time to time.
6. Life Insurance . During
the Term, the Company shall maintain, under an arrangement
satisfactory to the Company, $3,000,000 of life insurance on the
life of the Executive. The Executive shall have the right to
designate the beneficiary of such insurance policy. The Company may
maintain term life insurance, whole life insurance or such other
form of insurance as it deems appropriate.
7. Expenses . The Company
shall reimburse the Executive for all necessary and reasonable
travel and other business expenses incurred by the Executive in the
performance of his/her duties hereunder in accordance with such
reasonable accounting procedures as the Company may adopt generally
from time to time for executives.
8. Termination Without Cause;
Resignation for Good Reason following a Change of Control . The
provisions of this Section 8 shall apply if either
(i) the Executive’s employment is terminated by the
Company without Cause (as defined in Section 14 below) or
(ii) the Executive resigns under this Section 8 for Good
Reason within twelve months following a Change of Control. The
Executive shall give the Company not less than 30 days’ prior
written notice of such resignation.
(a) The Company may terminate the
Executive’s employment with the Company at any time without
Cause upon not less than 30 days’ prior written notice to the
Executive; provided that, in the event that such notice is given,
the Executive shall be under no obligation to render any additional
services to the Company and shall be allowed to seek other
employment. In addition, on the date of the Executive’s
termination of employment for any reason, the Executive agrees to
resign all positions, including as an officer and, if applicable,
as a director or member of the board of directors, of the Company
and its parents, subsidiaries and affiliates.
(b) Unless the Executive complies
with the provisions of Section 8(c) below, upon termination
without Cause at any time or resignation for Good Reason following
a Change in Control under Section 8(a) above, the Executive
shall be entitled to receive only the amount due to the Executive
under the Company’s then current severance pay plan for
employees, if any, but only to the extent not conditioned on the
execution of a release by the Executive. No other payments or
benefits shall be due under this Agreement to the Executive, but
the Executive shall be entitled to any benefits accrued and due in
accordance with the terms of any applicable benefit plans and
programs of the Company.
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(c) Notwithstanding the provisions
of Section 8(b), upon termination without Cause at any time or
resignation for Good Reason following a Change in Control under
Section 8(a) above , as applicable, if the Executive
executes and does not revoke a written release, in a form
acceptable to the Company, in its sole discretion, of any and all
claims against the Company and all related parties with respect to
all matters arising out of the Executive’s employment by the
Company, or the termination thereof (other than claims for any
entitlements under the terms of this Agreement or under any plans
or programs of the Company under which the Executive has accrued
and is due a benefit) (the “Release”), the Executive
shall be entitled to receive, in lieu of the payment described in
Section 8(b) and any other payments due under any severance
plan or program for employees or executives, the
following:
(i) An amount equal to 24 months of
the Executive’s annual Base Salary (at the rate in effect
immediately before the Executive’s termination), payable in
normal installments in accordance with the Company’s payroll
practices; provided, however , that if
Executive’s termination without Cause occurs prior to a
Change of Control or after twelve months following a Change of
Control, the amount payable under this Section 8(c)(i) shall
equal 18 months. Payments shall commence within 60 days after the
effective date on which the Executive’s employment
terminates, except as provided in Section 8(c)(vi)
below.
(ii) A pro rata bonus for the year
in which the Executive’s termination of employment occurs to
the extent that such amount would have been earned in accordance
with the terms of the Company’s annual incentive program only
with respect to the calendar year in which the Executive’s
termination of employment occurs, without regard to a requirement,
if any, that the Executive be employed by the Company on the date
of payment. The pro-rata bonus shall be payable at the date on
which other bonuses are paid for the year after the end of the
fiscal year to which it relates; provided that in no event shall
the Executive’s pro rata bonus be paid later than
March 15 of the calendar year following the fiscal year for
which it was earned, except as provided in Section 8(c)(vi)
below.
(iii) A monthly payment equal to the
monthly Executive’s COBRA health care continuation coverage
premium under section 4980B of the Internal Revenue Code of 1986,
as amended (the “Code”) under the Company’s
medical plan, for the period following the Executive’s
termination equal in duration to the severance period described in
Section 8(c)(i) above or until the date on which the Executive
is eligible for coverage under a plan maintained by a new employer
or under a plan maintained by his/her spouse’s employer,
whichever is sooner, for himself/herself and, where applicable,
his/her spouse and dependents.
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(iv) Notwithstanding any provision
to the contrary in any applicable plan, program or agreement, all
outstanding stock options, restricted stock, restricted stock units
and other equity rights held by the Executive as of the date of the
Executive’s termination without Cause at any time or
resignation for Good Reason following a Change in Control under
Section 8(a) above will become fully vested and exercisable as
of the date on which the Executive’s termination without
Cause at any time or resignation for Good Reason following a Change
in Control occurs. This subsection 8(c)(iv) shall not apply upon
Non-Renewal.
(v) Any other amounts earned,
accrued and owing but not yet paid under Section 2 above (Base
Salary and Bonus) and any benefits accrued and due under any
applicable benefit plans and programs of the Company.
(vi) If the Executive is determined
to be a Specified Employee (as defined in Section 14(e)
below), any amounts payable to him upon separation from service
that are deferred compensation under section 409A of the Code shall
be postponed and shall be paid in a lump sum after the first to
occur of (i) the date that is six months following the
Executive’s separation from service or (ii) the
Executive’s death. The lump sum payment of such postponed
amounts shall be made within five days following the end of the
six-month period or within 60 days following the Executive’s
death, as applicable. The section 409A postponement period shall
not apply to:
(1) separation pay that is exempt
from section 409A under the separation pay exception, which exempts
an amount up to two times the lesser of (a) the
Executive’s annualized compensation for the year prior to the
year of separation, or (b) the maximum amount that may be
taken into account under a qualified plan pursuant to section
401(a)(17) of the Code and which is paid no later than the last day
of the Executive’s second taxable year following the taxable
year in which his separation from service occurs; and
(2) any amount exempt from section
409A under the short term deferral exception.
9. Voluntary Termination .
The Executive may voluntarily terminate his/her employment for any
reason upon 30 days’ prior written notice. In such event,
after the effective date of such termination, no payments shall be
due under this Agreement, except that the Executive shall be
entitled to any amounts earned, accrued and owing but not yet paid
under Section 2 above and any benefits accrued and due under
any applicable benefit plans and programs of the
Company.
10. Disability . If the
Executive incurs a Disability (as defined in Section 14 below)
during the Term, the Executive’s employment shall terminate
on the date of Disability. If the Executive’s employment
terminates on account of Disability, the Executive shall be
entitled to receive any amounts earned, accrued and owing but not
yet paid under Section 2 above and any benefits accrued and
due under any applicable benefit plans and programs of the
Company.
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11. Death . If the Executive
dies while employed by the Company, the Executive’s
employment shall terminate on the date of death and the Company
shall pay to the Executive’s executor, legal representative,
administrator or designated beneficiary, as applicable, any amounts
earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due under any applicable benefit
plans and programs of the Company, including the proceeds from the
life insurance policy described in Section 6 above .
Otherwise, the Company shall have no further l
