Exhibit 10.15
EXECUTIVE SERVICES
AGREEMENT
THIS EXECUTIVE SERVICES AGREEMENT
(this “Agreement”), made this 11 th day of
August, 2005, is entered into by Alphatec Spine Inc., a California
corporation (the “Company”), and Shunshiro Yoshimi
(“Yoshimi”), residing at 25-7 Asumigaoka, 7 Chome,
Midori-ku, Chiba-shi, Chiba-ken
WHEREAS, the Company and Yoshimi
desire to enter into an executive services agreement which will
supersede any such prior agreements; and
WHEREAS, the Company wishes Yoshimi
to perform services for Alphatec Pacific, Inc., a Japanese
corporation and subsidiary of the Company
(“API”);
WHEREAS, the Company and Yoshimi
have entered into negotiations concerning this Agreement at the
offices of HealthpointCapital, LLC in New York City.
NOW, THEREFORE, in consideration of
the mutual covenants and promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as
follows:
1.
Term . The Company hereby agrees to retain Yoshimi,
and Yoshimi hereby agrees to be retained by the Company, upon the
terms set forth in this Agreement, for the period commencing on
March 25, 2005 (the “Commencement Date”) and
ending on the first anniversary of the Commencement Date (the
“Initial Term”), unless sooner terminated in accordance
with the provisions of Section 4; provided, however, that upon
the expiration of the Initial Term, unless Company shall have
previously notified Yoshimi otherwise, Yoshimi’s retention
shall continue on a month-to-month basis, terminable by Company or
Yoshimi as hereafter provided (the Initial Term, as it may be
extended, is referred to herein as the
“Term”).
2.
Title; Capacity . Yoshimi shall serve as the
Representative Director, President and Chief Executive Officer of
API to perform the duties and responsibilities inherent in such
position including, but not limited to, negotiating and
restructuring API’s relationships with its distributors in
order to maximize the benefits that accrue to API through these
relationships. The Company and Yoshimi agree that Yoshimi
shall endeavor to restructure the business of API such that API
will sell its products to customers without the use of a
distributor. To this end, Yoshimi shall endeavor to hire
employees from API’s current distributor in order to run
API’s distribution operation, to the extent permitted by law
or such distribution. The Company and Yoshimi further agree
that Yoshimi shall endeavor to cause API to repurchase inventory
that API has sold to its distributors on a “ pay-as-we-go”
basis. Thereafter, Yoshimi shall endeavor to build an
organization at API which, over a period of approximately 24
months, would include identifying and training a successor to
assume the position of CEO of API and lead the business to
continuing growth. The manner of the performance of
Yoshimi’s services hereunder and the amount of time Yoshimi
spends in Japan or elsewhere in so providing such services shall be
solely within the discretion and determination of Yoshimi, subject
to the authority of the Board of Directors of the Company and
provisions of Section 4.2. In the event that (except in
connection with grooming a successor CEO as contemplated above)
Yoshimi’s title, authority or
duties are changed or
diminished, or that the geographical region where Yoshimi provides
his services is altered, or that another person is appointed by API
with comparable or more senior executive title, authority or
duties, such action or actions shall be considered a termination by
the Company without cause pursuant to Section 4.2. It is
contemplated that the Term will end upon the election of the
successor CEO with the consent of Yoshimi.
3.
Compensation and Benefits .
3.1
Compensation . The Company shall pay Yoshimi annual
base compensation of $200,000, commencing on the Commencement Date,
payable in accordance with the Company’s customary payroll
practices.
3.2
Fringe Benefits . Yoshimi shall be entitled to
participate in all benefit programs that the Company establishes
and makes available to its management employees, if any, to the
extent that Yoshimi’s position, tenure, compensation, age,
health and other qualifications make him eligible to participate,
including, but not limited to, health care plans, life insurance
plans, dental care plans, disability income plans, supplemental
retirement plans, and all other benefit plans from time to time in
effect generally for executives and/or employees of the
Company. Yoshimi shall also be subject to indemnification by
the Company and be covered under the Company’s officers and
directors liability insurance and other liability insurance to the
fullest extent provided to any officer or director of the
Company.
3.3
Reimbursement of Expenses . Yoshimi shall be entitled
to reimbursement for reasonable travel, entertainment and other
expenses incurred or paid by him in connection with, or related to
the performance of his duties, responsibilities or services under
this Agreement, upon presentation by Yoshimi of documentation,
expense statements, vouchers and/or such other supporting
information as the Company may request.
4.
Termination of Retention Period . This Agreement, and
Yoshimi’s services hereunder, shall terminate upon the
occurrence of any of the following:
4.1
Termination for Cause . At the election of the
Company, for Cause. For the purposes of this
Section 4.1, “Cause” for termination shall be
deemed to exist upon the occurrence of any of the
following:
(a)
a finding by the Company that Yoshimi has engaged in dishonesty,
gross negligence or gross misconduct that is injurious to the
Company;
(b)
Yoshimi’s conviction or entry of nolo contendere to any
felony or crime involving moral turpitude, fraud or embezzlement of
Company property; or
(c)
Yoshimi’s failure to provide any of the services set forth in
Section 2 herein, or any other material breach of this
Agreement, which, if curable, has not been cured by Yoshimi within
30 days after he shall have received written notice from the
Company stating with reasonable specificity the nature of such
breach.
4.2
Termination by the Company Without Cause . At the
election of the Company, without Cause, at any time. Any
material breach of this Agreement by the Company
2
which, if curable, has not
been cured by the Company within 30 days after receiving written
notice from Yoshimi stating with reasonable specificity the nature
of such breach shall be deemed to be a termination without Cause by
the Company.
4.3
Death or Disability . Upon the death or a
determination of disability of Yoshimi. As used in this
Agreement, the determination of “disability” shall
occur when Yoshimi, due to a physical or mental disability, for a
period of 90 consecutive days, or 180 days in the aggregate whether
or not consecutive, during any 360-day period, is unable to perform
the services contemplated under this Agreement. A
determination of disability shall be made by a physician
satisfactory to both Yoshimi and the Company, provided
that if Yoshimi and the Company do not agree on a physician,
Yoshimi and the Company shall each select a physician and these two
together shall select a third physician, whose determination as to
disability shall be binding on all parties.
4.4
Voluntary Termination by Yoshimi . At the election of
Yoshimi, other than pursuant to Sections 4.2, 4.3 or as a result of
any material breach of this agreement by the Company which is not
cured within thirty (30) days of receiving notice from Yoshimi,
stating with reasonable specificity the nature of such breach, upon
not less than 30 days prior written notice by him to the
Company.
5.
Effect of Termination .
5.1
Termination for Cause, at the Election of Yoshimi or for Death
of Disability . In the event that Yoshimi’s
services ar
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