Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is entered into as of the 23
rd of July 2008 based on acceptance of the offer,
(the “Effective Date”) by and between Osiris
Therapeutics, Inc., a Delaware corporation (the
“Company”), and Richard W. Hunt, (the
“Executive”).
WHEREAS, the Company desires to
employ the Executive, and the Executive desires to be employed by
the Company, on the terms and conditions set forth herein from and
after July 23, 2008; and
WHEREAS, the board of directors of
the Company (the “Board”) has authorized the entry into
this Agreement with the Executive.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto agree as
follows:
1.
Employment Agreement.
On the terms and conditions set
forth in this Agreement, the Company agrees to employ the Executive
and the Executive agrees to be employed by the Company for the
Employment Period set forth in Section 2 hereof and in the
position and with the duties set forth in Section 3
hereof.
2.
Term. The initial term of employment under this
Agreement shall be for a three-year period commencing on the date
hereof (the “Initial Term”). The term of employment
shall be automatically renewed for an additional consecutive
12-month period (the “Extended Term”) as of the third
and every subsequent anniversary of the date hereof, unless and
until either party provides written notice to the other party in
accordance with Section 11 hereof not less than 90 days before
such anniversary date that such party is terminating the term of
employment under this Agreement, which termination shall be
effective as of the end of such Initial Term or Extended Term, as
the case may be, or until such term of employment is otherwise
terminated as hereinafter set forth. Such Initial Term and all such
Extended Terms are collectively referred to herein as the
“Employment Period.” The parties’ obligations
under Sections 6, 8, 9, and 10 hereof shall survive the expiration
or termination of the Employment Period.
3.
Position and Duties.
The Executive shall initially serve
as Chief Financial Officer during the Employment Period. As such,
the Executive shall render executive policy and other management
services to the Company of the
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type customarily performed by
persons serving in a similar, officer capacity, and shall perform
the other duties and objectives as the CEO may determine from time
to time. The Executive shall report to the CEO. Objectives of
the Executive may be amended by the CEO from time to time.
The Executive shall devote the sufficient efforts and working time
to the performance of the Executive’s duties and the
advancement of the business and affairs of the Company.
4.
Compensation.
(a) Base Salary. During
the Employment Period, the Company shall pay to the Executive an
annual base salary (the “Base Salary”), which initially
shall be at the rate of USD 270,000 per year. The Base Salary shall
be reviewed no less frequently than annually and may be increased
at the discretion of the Board. When the Executive’s Base
Salary is increased, the increased amount shall be the Base Salary
for the next 12-month period. Except as otherwise agreed in writing
by the Executive, the Base Salary shall not be reduced from the
amount previously in effect during the Employment Period. The Base
Salary shall be payable semimonthly or in such other installments
as shall be consistent with the Company’s payroll
procedures.
(b) Bonus. At the
discretion of the Board, the Executive will be eligible to earn a
bonus for 2008 in the amount up to USD 40,000. The bonus amount
will depend upon performance against mutually agreed
targets. At the discretion of the Board, the Executive
will be eligible to earn a bonus for 2009 in the amount up to USD
80,000. The bonus amount will depend upon performance against
mutually agreed targets.
(c) Benefits. During
the Employment Period, the Executive will be entitled to such other
benefits approved by the Board and made available to employees
generally. Nothing contained in this Agreement shall prevent the
Company from changing insurance carriers or from effecting
modifications in insurance coverage or other employee benefits that
impact Executive.
(d) Vacation: Holidays.
The Executive shall be entitled to all public holidays observed by
the Company and per Company policy as determined by the Board and
twenty vacation days in accordance with the applicable vacation
policies for senior executives of the Company, which shall be taken
at a reasonable time or times so as not to negatively impact the
operations of the Company. A maximum of 20 unused vacation days may
be carried over for twelve months after the year in which they
accrue.
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(e) Withholding Taxes and
Other Deductions. To the extent required by law, the Company
shall withhold from any payments due Executive under this Agreement
any applicable federal, state or local taxes and such other
deductions as are prescribed by law or Company policy.
(f) Equity. Upon the
effective date of the Agreement, the Executive shall be granted
120,000 options to purchase Company common stock at the current
fair market value based on the close of business market price of
July 22, 2008. The options shall vest ratably, one-fourth on
each anniversary of the Effective Date for four consecutive years
until fully vested. Upon mutual agreement of the Board and
the Executive, stock grants or similar instruments may be
substituted in place of stock options.
5.
Expenses . The Executive’s expenses incurred
in the performance of his duties hereunder, including the costs of
travel, and similar business expenses incurred shall be reimbursed
by the Company promptly in accordance with Company expense policies
upon periodic presentation by the Executive of an itemized account
of such expenses, with appropriate documentation, which shall be
reviewed by the audit committee from time to time at its
discretion.
6.
Confidentiality: Work
Product.
(a) Information. The
Executive acknowledges that the information, observations and data
obtained by the Executive concerning the business and affairs of
the Company and its Subsidiaries during the course of the
Executive’s performance of services for, or employment with,
any of the foregoing Persons (whether or not compensated for such
services) are the property of the Company and its Subsidiaries,
including information concerning acquisition opportunities in or
reasonably related to the business or industry of the Company or
its Subsidiaries of which the Executive becomes aware during such
period. Therefore, the Executive agrees that he will not at any
time (whether during or after the Employment Period) disclose to
any unauthorized person or, directly or indirectly, use for the
Executive’s own account or the account of any other Person,
any of such information, observations or data without the
Board’s consent, unless and to the extent that the
aforementioned matters become generally known to and available for
use by the public other than as a direct or indirect result of the
Executive’s acts or omissions to act or the acts or omissions
to act of other senior or junior management employees of the
Company and its Subsidiaries. The Executive agrees to deliver to
the Company at the termination of the Executive’s employment,
or at any other time the Company may request in writing (whether
during or after the Employment Period), all memoranda, notes,
plans, records, reports and other documents, regardless of the
format or media
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(and copies thereof), relating to
the business of the Company and its Subsidiaries and their
predecessors (including, without limitation, all acquisition
prospects, lists, customer and contact information) which the
Executive may then possess or have under the Executive’s
control.
(b) Inventions and
Patents. The Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs,
analyses, drawings, reports and all similar or related information
(whether or not patentable) that relate to the actual or
anticipated business, research and development or existing or
future products or services of the Company or its Subsidiaries that
are conceived, developed, made or reduced to practice by the
Executive while employed by the Company or any of its predecessors
(“Work Product”) belong to the Company and the
Executive hereby assigns, and agrees to assign, all of the above to
the Company. Any copyrightable work prepared in whole or in part by
the Executive in the course of the Executive’s work for any
of the foregoing entities shall be deemed a “work made for
hire” under the copyright laws, and the Company shall own all
rights therein. To the extent that any such copyrightable work is
not a “work made for hire,” the Executive hereby
assigns and agrees to assign to the Company all right, title and
interest, including without limitation, copyright in and to such
copyrightable work. The Executive shall promptly disclose such Work
Product and copyrightable work to the Board and perform all actions
reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm the Company’s
ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
7.
Termination of
Employment.
(a) Permitted
Terminations. The Executive’s employment hereunder may be
terminated during the Employment Period without any breach of this
Agreement only under the following circumstances:
(i)
Death. The Executive’s employment hereunder shall
terminate upon the executive’s death;
(ii)
By the Company.
The Company may
terminate the Executive’s employment:
(A)
If the Executive shall have been unable to perform all of the
Executive’s duties hereunder by reason of illness, physical
or mental disability or other similar incapacity, which inability
shall continue for three or more consecutive months or four or more
non-consecutive months; or
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(B)
for the failure of Executive to
satisfactorily perform the duties and the tasks of the office held
by the Executive as reasonably determined by the Board, and such
failure is not cured within 30 days after the Executive receives
specific written notice thereof from the Board; or
(C)
for Cause; or
(iii) By the Executive. The Executive may terminate
employment for Good Reason.
(b) Termination.
Any termination of the Executive’s employment by the Company
or the Executive (other than because of the Executive’s
death) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 11 hereof.
Termination of the Executive’s employment shall take effect
on the Date of Termination.
8.
Compensation Upon Termination.
(a) Death. If the
Executive’s employment is terminated during the Employment
Period as a result of the Executive’s death, the Company
shall pay to the Executive’s estate, or as may be directed by
the legal representatives of such estate, the Executive’s
Base Salary prorated through the Date of Termination and all other
accrued and unpaid amounts, if any, to which the Executive is
entitled as of the Date of Termination, and the Company shall have
no further obligations to the Executive under this
Agreement.
(b) Disability. If the
Company terminates the Executive’s employment during the
Employment Period because of the Executive’s disability
pursuant to Section 7(a)(ii)(A) hereof, the Company shall
pay to the Executive, the Executive’s Base Salary prorated
through the Date of Termination and all other accrued and unpaid
amounts, if any, to which the Executive is entitled as of the Date
of Termination, and the Company shall have no further obligations
to the Executive under this Agreement; provided, that
payments so made to the Executive during any period that the
Executive is unable to perform all of the Executive’s duties
hereunder by reason of illness, physical or mental illness or other
similar incapacity shall be reduced by the sum of the amounts, if
any, payable to the Executive at or prior to the time of any
such
