Employment Agreement, dated July 17, 2024, by and between Rewalk Robotics, Inc. and Almog Adar

 

 

 

 

 

1.            Employment.

 

(a)          The Company hereby agrees to employ the Employee, and the Employee hereby agrees to accept such employment with the Company, beginning on July 17, 2024 and continuing for the period set forth in Section 2 hereof, all upon the terms and conditions hereinafter set forth.

 

(b)          The Employee affirms and represents that as of the commencement of his employment by the Company on July 17, 2024 he will be under no obligation to any former employer or other party which is in any way inconsistent with, or which imposes any restriction upon, the Employee’s acceptance of employment hereunder with the Company, the employment of the Employee by the Company, or the Employee’s undertakings under this Agreement.

 

2.            Term of Employment.

 

(a)          Unless earlier terminated as provided in this Agreement, the term of the Employee’s employment under this Agreement shall be for a period beginning on July 17, 2024 through July 16, 2026 (the “Initial Term”).

 

(b)          The term of the Employee’s employment under this Agreement shall be automatically renewed for additional twelve-month terms (each, a “Renewal Term”) upon the expiration of the Initial Term or any Renewal Term unless the Company or the Employee delivers to the other, at least ninety (90) days prior to the expiration of the Initial Term or applicable Renewal Term, written notice specifying that the term of the Employee’s employment will not be renewed at the end of the Initial Term or Renewal Term.  If the term of the Employee’s employment is not renewed, the severance terms set forth in Section 9(b) below will take effect.  The period from July 17, 2024, through July 16, 2026 or, in the event that the Employee’s employment hereunder is earlier terminated as provided herein or renewed as provided in this Section 2(b), such shorter or longer period, as the case may be, is hereinafter called the “Employment Term”.

 

3.            Duties.  The Employee shall be employed as the Vice President, Finance and Chief Accounting Officer of the Company, shall faithfully and competently perform such duties as inhere in such position and as are specified in the Bylaws of the Company and shall also perform and discharge such other executive employment duties and responsibilities as the CFO of the Company shall from time to time determine.  The position shall report to the CFO.  The Employee shall perform his duties principally at the executive offices of the Company, with such travel to such other locations from time to time as the CEO and CFO of the Company may reasonably prescribe and that is mutually agreed upon.  Except as may otherwise be approved in advance by the CFO of the Company, and except during vacation periods and reasonable periods of absence due to sickness, personal injury or other disability or non-profit public service activities, the Employee shall devote his full time throughout the Employment Term to the services required of him hereunder.  The Employee shall render his business services exclusively to the Company (which term includes any of its subsidiaries or affiliates).  During the Employment Term, the Employee shall use his best efforts, judgment, and energy to improve and advance the business and interests of the Company in a manner consistent with the duties of his position.  Notwithstanding the foregoing, the Employee shall be entitled to participate as a director and investor in other business enterprises and to engage in activities related thereto so long as such participation and activities do not (i) involve a substantial amount of the Employee’s time, (ii) impair the Employee’s ability to perform his duties under this Agreement or (iii) violate the provisions of Section 12 of this Agreement.

 

4.            Salary.  As compensation for the complete and satisfactory performance by the Employee of the services to be performed by the Employee hereunder during the Employment Term, the Company shall pay the Employee a base salary at the annual rate of Two Hundred and Fifty Thousand Dollars ($250,000.00) (said amount, together with any increases thereto as may be determined from time to time by the Compensation Committee of the Company in its sole discretion, being hereinafter referred to as “Base Salary”).  Any Base Salary payable hereunder shall be paid in regular intervals (in the United States, twice per month) in accordance with the Company’s payroll practices from time to time in effect.  The employee shall additionally be eligible to participate in annual merit increases beginning January 1, 2025.

 

5.            Bonus and Equity Compensation.  The Employee will be eligible to participate in the Company’s bonus plan, with eligibility for an annual bonus of up to twenty-five percent (25%) of the Employee’s then-Base Salary, assuming Company and individual objectives are met (the “Bonus”).  For the period from the commencement of the Employment Term through December 31, 2024, the amount of Bonus for which the Employee will be eligible to receive will be pro-rated for such period based on the Employee’s salary before the Initial Term and the salary after the start of the Initial Term.  Bonus percentage will be subject to specific objectives and accomplishments as are mutually agreed upon by the Board of Directors and the Employee.  Payment of such bonuses will be subject to the approval of the Compensation Committee of the Board of Directors.  Performance that exceeds the agreed-upon objectives will allow for payment beyond the 25% target.  The Employee will also be eligible for annual grants of Restricted Stock Units (“RSUs”) with terms generally consistent with the terms set forth in the Company’s 2014 Equity Incentive Plan and any subsequent incentive plans.

 

6.            Relocation to the United States.  In order to facilitate the Employee’s relocation to the United States, the Company shall provide a package of one-time relocation benefits (the “Relocation Package”).  The Relocation Package shall include reimbursement of personal and family travel costs to the U.S., expenses for transportation of personal home goods to the U.S., expenses for the purchase of personal home goods for living in the U.S., and the cost of storage of Employee’s personal home goods during the temporary housing period, if applicable, for up to six months.  The Employee shall submit receipts for these transition costs for which the Company will provide financial reimbursement up to $25,000.  In addition to reimbursing for these expenses, the Company will also provide a one-time lump sum payment of $30,000 to be paid in the first pay period that the Employee begins work in the United States to assist with other transition costs.

 

 

 

7.            Other Benefits.  During the Employment Term, the Employee shall:

 

(i)          be eligible to participate (on terms at least as favorable as other executive employees) in employee fringe benefits and pension and/or profit-sharing plans that may be provided by the Company for its executive employees in accordance with the provisions of any such plans, as the same may be in effect from time to time;

 

(ii)          be entitled to medical and dental coverage under the Company’s health care policy for its executive employees and their dependents in accordance with the provisions of such Company’s health care policy, as the same may be in effect from time to time;

 

(iii)          be entitled to the number of paid vacation days in each calendar year determined by the Company from time to time for its executive officers, provided that such number of paid vacation days in each calendar year shall not be less than twenty (20) workdays (four (4) calendar weeks); the Employee shall also be entitled to all paid U.S. holidays given by the Company to its senior executive officers;

 

(iv)          be entitled to sick leave, sick pay and disability benefits in accordance with any Company policy that may be applicable to senior executive employees from time to time and applicable law; and

 

(v)          be entitled to reimbursement for all reasonable and necessary out-of-pocket business expenses incurred by the Employee in the performance of his duties hereunder in accordance with the Company’s normal policies from time to time in effect.

 

8.             Confidential Information.  The Employee hereby covenants, agrees, and acknowledges as follows:

 

(a)          The Employee has and will have access to and will participate in the development of or be acquainted with confidential or proprietary information and trade secrets related to the business of the Company and any other present or future subsidiaries or affiliates of the Company (collectively with the Company, the “Companies”), including but not limited to (i) inventions; designs; specifications; materials to be used in products and manufacturing processes; customer lists; claims histories, adjustments and settlements and related records and compilations of information; the identity, lists or descriptions of any new customers, referral sources or organizations; financial statements; cost reports or other financial information; contract proposals or bidding information; business plans; training and operations methods and manuals; personnel records; software programs; reports and correspondence; premium structures; and management systems, policies or procedures, including related forms and manuals; (ii) information pertaining to future developments such as future marketing or acquisition plans or ideas, and potential new business locations and (iii) all other tangible and intangible property, which are used in the business and operations of the Companies but not made public.  The information and trade secrets relating to the business of the Companies described hereinabove in this paragraph (a) are hereinafter referred to collectively as the “Confidential Information”, provided that the term Confidential Information shall not include any information (x) that is or becomes generally publicly available (other than as a result of violation of this Agreement by the Employee), (y) that the Employee receives on a non-confidential basis from a source (other than the Companies or their representatives) that is not known by him to be bound by an obligation of secrecy or confidentiality to any of the Companies or (z) that was in the possession of the Employee prior to disclosure by the Companies.

 

(b)          The Employee shall not disclose, use or make known for him or another’s benefit any Confidential information or use such Confidential Information in any way except as is in the best interests of the Companies in the performance of the Employee’s duties under this Agreement.  The Employee may disclose Confidential Information when required by a third party and applicable law or judicial process, but only after providing immediate notice to the Company at any third party’s request for such information, (subject to section 9(c) below) which notice shall include the Employee’s intent with respect to such request.

 

(c)          Notwithstanding the above, this Agreement does not limit Employee’s right to receive an award for information provided to the Securities and Exchange Commission (“SEC”).  Additionally, pursuant to the Defend Trade Secrets Act of 2016 (the “Act”), an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is:  (a) made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; (b) solely for the purpose of reporting or investigating a suspected violation of law; or (c) made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  Under the Act, an individual who files a lawsuit alleging retaliation for reporting a suspected violation of law may disclose the Company’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual:  (a) files a document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement is intended to limit or interfere with Employee’s rights under the Act, or limit Employee’s right to provide information to the SEC with or without notice to the Company.

 

(d)          The Employee acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 8 would be inadequate and, therefore, agrees that the Companies shall be entitled to injunctive relief in addition to any other available rights and remedies in case of any such breach or threatened breach; provided, however, that nothing contained herein shall be construed as prohibiting the Companies from pursuing any other rights and remedies available for any such breach or threatened breach.

 

(e)          The Employee agrees that upon termination of his employment with the Company for any reason, the Employee shall forthwith return to the Company all Confidential Information in whatever form maintained (including, without limitation, computer discs and other electronic media).

 

(f)          The obligations of the Employee under this Section 8 shall, except as otherwise provided herein, survive the termination of the Employment Term and the expiration or termination of this Agreement.

 

(g)          The Employee hereby expressly agrees that the foregoing provisions of this Section 8 shall be binding upon the Employee’s heirs, successors and legal representatives.

 

9.            Termination.

 

(a)          The Employee’s employment hereunder shall be terminated upon the occurrence of any of the following:

 

(i)          death of the Employee;

 

(ii)          the Employee’s inability to perform his duties on account of disability or incapacity for a period of one hundred eighty (180) or more days, whether or not consecutive, within any period of twelve (12) consecutive months;

 

(iii)          the Company giving written notice, at any time, to the Employee that the Employee’s employment is being terminated “for cause” (as defined below); or

 

(iv)          the Company giving written notice, at any time, to the Employee that the Employee’s employment is being terminated other than pursuant to clause (i), (ii) or (iii) above;

 

(v)          the Employee voluntarily terminates for Good Reason as defined below.

 

 

(b)          In the event that the Employee’s employment is terminated pursuant to clause (iv) or (v) of Section 9(a) above, during the Initial Term, and subject to Employee signing a release agreement in a form acceptable to the Company, the Company shall pay to the Employee, as severance pay or liquidated damages or both, monthly payments at the rate per annum of his Base Salary and Bonus (and the replacement cost of his benefits as described in Section 7 above) at the time of such termination for a period from the date of such termination to the date which is twelve months after such termination, or for the remainder of the time period of the Initial Term, whichever is time period is shorter; provided, however, that in no case will the monthly payments represent less than three months of severance pay.  In addition, the Company will pay for the costs of the Employee’s repatriation to Israel, including relocation of his personal property and all travel costs for him and his family, should the Employee notify the Company of his desire to do this within one month of the time of termination. After the Initial Term has expired and during a Renewal Term, and subject to Employee signing a release agreement in a form acceptable to the Company, the Company shall pay to the Employee, as severance pay or liquidated damages or both, monthly payments at the rate per annum of his Base Salary and Bonus (and the replacement cost of his benefits as described in Section 7 above) at the time of such termination for a period from the date of such termination to the date which is three months after such termination.

 

(c)          The Employee shall be entitled to voluntary leave and receive severance pay as discussed in Section 9(b) if the Employee resigns for Good Reason (as defined below), and subject to Employee signing a release agreement in a form acceptable to the Company.

 

(d)          Notwithstanding anything to the contrary expressed or implied herein, except as required by applicable law and except as set forth in Section 9(b) above, the Company (and its affiliates) shall not be obligated to make any payments to the Employee or on his behalf of whatever kind or nature by reason of the Employee’s cessation of employment (including, without limitation, by reason of termination of the Employee’s employment by the Company’s for “cause”), other than (i) such amounts, if any, of his Salary as shall have accrued and remained unpaid as of the date of said cessation and (ii) such other amounts, if any, which may be then otherwise payable to the Employee pursuant to the terms of the Company’s benefits plans.

 

(e)          No interest shall accrue on or be paid with respect to any portion of any payment hereunder.

 

(f)          For purposes of this Agreement, the term “Good Reason” means Employee resigns due to (i) he no longer reports to a person with a grade level equal to or higher than his, (ii) relocation of the Employee by the Company without Employee’s express written consent to a facility or location more than fifty (50) miles from Employee’s then-current location in one or more steps; (iii) a ten percent (10%) or greater reduction in the Base Salary (other than an equivalent percentage reduction in the base salaries that applies to Employee’s entire business unit); or (iv) a material breach by the Company of this Employment Agreement; provided, however, that with respect to each of the foregoing, Employee must (a) within ninety (90) days following its occurrence, deliver to the Company a written explanation specifying the specific basis for Employee’s belief that he is entitled to terminate his employment for Good Reason, (b) give the Company an opportunity to cure any of the foregoing within thirty (30) days following delivery of such explanation and (c) provided Company has failed to cure any of the foregoing within such thirty (30) day cure period, terminate Employee’s employment within thirty (30) days following expiration of such cure period.

 

10.          Severance Bonus in Event of Change of Control.  In the event that the Employee’s employment with the Company is terminated by the Company (or its successor) not for cause or by the Employee for Good Reason within 90 days prior to a Change of Control as defined below, or one year following a Change of Control, upon the effective date of termination of employment the Employee shall be entitled to the following severance, subject to Employee signing a release agreement in a form acceptable to the Company:

 

(i)          12 months of the Base Salary; plus

 

(ii)          An annual bonus for the year in which the termination occurs equal to the bonus that the Employee would have received assuming he had not been terminated prior to the applicable date of payment of such bonus and also assuming achievement of 100% of the milestones and targets as established by the Company’s board of directors for the applicable year of termination; such bonus shall be payable promptly following the termination; plus

 

(iii)          All unvested RSUs will vest and become immediately exercisable upon the effective date of termination of employment; and

 

(iv)          In the event that the Employee elects to return his family and himself to Israel, the Company will pay for the costs of the Employee’s repatriation to Israel, including relocation of his personal property and all travel costs for him and his family.

 

(v)          “Change of Control” shall have the meaning set forth in Section 2.10 of the Company’s Amended and Restated 2014 Incentive Compensation Plan.

 

11.          Non-Assignability.

 

(a)          Neither this Agreement nor any right or interest hereunder shall be assignable by the Employee or his beneficiaries or legal representatives without the Company’s prior written consent; provided, however, that nothing in this Section 11(a) shall preclude the Employee from designating a beneficiary to receive any benefit payable hereunder upon his death or incapacity.

 

(b)          Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy or similar process or to assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

 

12.          Inventions.  Any and all inventions, innovations or improvements (“inventions”) made, developed or created by the Employee (whether at the request or suggestion of the Company or otherwise, whether alone or in conjunction with others, and whether during regular hours of work or otherwise) during the Employment Term which may be directly or indirectly useful in, or relate to, the business of the Company shall be promptly and fully disclosed by the Employee to the Board of Directors of the Company and shall be the Company’s exclusive property as against the Employee, and the Employee shall promptly deliver to an appropriate representative of the Company as designated by the Board of Directors all papers, drawings, models, data and other material relating to any inventions made, developed or created by him as aforesaid.  The Employee shall, at the request of the Company and without any payment therefor, execute any documents necessary or advisable in the opinion of the Company’s counsel to direct issuance of patents or copyrights to the Company with respect to such inventions as are to be the Company’s exclusive property as against the Employee or to vest in the Company title to such inventions as against the Employee.  The expense of securing any such patent or copyright shall be borne by the Company.

 

13.          Restrictive Covenants.

 

(a)          Non-Competition or “Non-Compete”.  During the Employment Term and during the twelve (12) month period following Employee’s termination, the Employee will not directly or indirectly (as a director, officer, executive employee, manager, consultant., independent contractor, advisor or otherwise) engage in competition with, or own any interest in, perform any services for, participate in or be connected with any business or organization which engages in competition with the Company within the meaning of Section 13(d) below, provided, however, that the provisions of this Section 13(a) shall not be deemed to prohibit the Employee’s ownership of not more than two percent (2%) of the total shares of all classes of stock outstanding of any publicly held company in competition with the Company, or ownership, whether through direct or indirect stock holdings or otherwise, of one percent (1%) or more of any other business in competition with the Company.  The geographic territory within which this Section 13(a) applies is all of the United States of America, Europe and Asia.

 

(b)          Non-Solicitation of Employees.  During the Employment Term and during the twelve (12) month period following the Employee’s termination, the Employee will not directly or indirectly induce or attempt to induce any employee of any of the Companies to leave the employ of the Company, or in any way interfere with the relationship between the Company and any employee thereof.

 

(c)          Non-Solicitation of Clients and Prospective Clients.  During the Employment Term and during the twelve (12) month period following the Employee’s termination, Employee shall not, directly or indirectly, canvass, contact, solicit or service, for the purpose of selling, marketing, or providing competitive products or services in the Competitive Business as defined below, any Client or Prospective Client of the Company to which Employee had “exposure in any material capacity” (as that phrase is defined below) during the last twelve (12) months of Employee’s employment with the Company.  For purposes of this section, the term “Client” shall mean any individual or business entity which received any products or services from the Company during the last twelve (12) months of Employee’s employment with the Company.  For purposes of this section, the term “Prospective Client” shall mean any individual or business entity with which the Company was in active business discussions and negotiations and to which the Company had presented a proposal for the sale or provision of its products or services during the last twelve (12) months of Employee’s employment with the Company.  For purposes of this section, “exposure in any material capacity” shall mean (i) access to and review of the Company’s information pertaining to a Client or Prospective Client, or (ii) direct communication, whether written, electronic, verbal or otherwise, regarding the Company’s business with a Client or Prospective Client.

 

(d)          Certain Definitions.  For purposes of this Section 13, a person or entity (including, without limitation, the Employee) shall be deemed to be a competitor of the Company, or a person or entity (including, without limitation, the Employee) shall be deemed to be engaging in competition with the Company, if such person or entity is engaged in a business involving robotic technologies designed to allow mobility of paralyzed or limited mobility patients (“Competitive Business”).

 

(e)          Certain Representations of the Employee.  In connection with the foregoing provisions of this Section 13, the Employee represents that his experience, capabilities and circumstances are such that such provisions will not prevent him from earning a livelihood.  The Employee further agrees that the limitations set forth in this Section 13 (including, without limitation, time and territorial limitations) are reasonable and properly required for the adequate protection of the current and future businesses of the Companies.  It is understood and agreed that the covenants made by the Employee in this Section 13 (and in Section 8 hereof) shall survive the expiration or termination of this Agreement.

 

(f)          Injunctive Relief.  The Employee acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of Sections 8 or 13 hereof would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in cases of any such breach or threatened breach; provided, however, that nothing contained herein shall be construed as prohibiting the Company from pursuing any other rights and remedies available for any such breach or threatened breach.

 

(g)          In the event Employee’s employment is involuntarily terminated by the Company pursuant to Section 9(a)(iv) during the Initial Term or Renewal Term, Section 13(a) shall be void.  Provided Employee complies with the terms of this Agreement, including Section 13(a), the Company shall pay as “Garden Leave” continuing severance pay at a rate equal to fifty percent (50%) of Employee’s Base Salary, as then in effect (less applicable withholding), for a period of twelve (12) months from the date of such termination, to be paid periodically in accordance with the Company’s normal payroll practices (the “Non-Compete Period”).

 

(h)          Such payments will commence on the next regular payroll date following the termination of Employee’s employment and shall be subject to all applicable withholdings.  During the Non-Compete Period, Employee understands that he will not be an employee of the Company and will not be eligible to accrue (i) any bonuses, commissions, or other benefits, including, but not limited to any retirement contributions previously made by the Company; and (ii) any vacation/sick/paid time off.  Any vacation/sick/paid time off accrued prior to Employee’s termination will be paid in accordance with applicable law and Company policies.  If the Company begins paying Employee the Garden Leave, the Company will continue making payments during the Non-Compete Period unless Employee:  (i) breaches his fiduciary duty to the Company; (ii) unlawfully takes property belonging to the Company; or (iii) violates the terms of this Agreement in any way; at which time the Company will discontinue payments to Employee under this section, and the Non-Compete Period will be extended up to two (2) years from the date of Employee’s termination.

 

 

 

 

 

14.          Binding Effect.  Without limiting or diminishing the effect of Section 8 or Section 13 hereof, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and assigns.

 

15.          Notices.  All notices which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient in all respects if given in writing and (i) delivered personally, (ii) mailed by certified or registered mail, return receipt requested and postage prepaid, (iii) sent via a nationally recognized overnight courier or (iv) sent via facsimile or email confirmed in writing to the recipient, if to the Company at the Company’s principal place of business, and if to the Employee, at his home address most recently filed with the Company, or to such other address or addresses as either party shall have designated in writing to the other party hereto, provided, howe3ver, that any notice sent by certified or registered mail shall be deemed delivered on the date of delivery as evidenced by the return receipt.

 

16.          Law Governing.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

 

17.          Severability.  The Employee agrees that in the event that any court of competent jurisdiction shall finally hold that any provision of Section 8 or 13 hereof is void or constitutes an unreasonable restriction against the Employee, the provisions of such Section 8 or 13 shall not be rendered void but shall apply with respect to such extent as such court may judicially determine constitutes a reasonable restriction under the circumstances.  If any part of this Agreement other than Section 8 or 13 is held by a court of competent jurisdiction to be invalid, illegible or incapable of being enforced in whole or in part by reason of any rule of law or public policy, such part shall be deemed to be severed from the remainder of this Agreement for the purpose only of the particular legal proceedings in question and all other covenants and provisions of this Agreement shall in every other respect continue in full force and effect and no covenant or provision shall be deemed dependent upon any other covenant or provision.

 

18.          Waiver.  Failure to insist upon strict compliance with any of the terms, covenants or condition hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.

 

19.          Entire Agreement; Modifications.  This Agreement constitutes the entire and final expression of the agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof.  This Agreement may be modified or amended only by an instrument in writing signed by both parties hereto.

 

20.          Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.