EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT executed on August 19, 2004 and effective as of
January 1, 2004 between Databit Inc., a Delaware corporation (the "Company"),
Xxxxxxx Xxxxxxxxxxx (the "Executive") and Data Systems & Software Inc., a
Delaware corporation ("DSSI").
WHEREAS, the Executive has been employed by the Company since 1996 and has
served as its President since 1998;
WHEREAS, the Executive has been an executive officer of DSSI and has served as
Vice President - Operations of DSSI since February 2000;
WHEREAS, during the Executive's tenure, the Company has established itself as a
successful and profitable value-added reseller of hardware and software
products, which has and is operating at a profit;
WHEREAS, the Company and DSSI desire to assure the Executive's continued service
to the Company by entering into an Employment Agreement with the Executive with
appropriate provisions to assure such continued service and non-competition
covenants;
WHEREAS, the Company desires to employ the Executive as its Chief Executive
Officer on the terms hereinafter set forth;
WHEREAS, in order to secure the services of the Executive, the Company has
requested DSSI to guarantee its obligations and provide certain financial
incentives under an agreement with the Executive, and DSSI is willing to do so,
as hereinafter set forth;
WHEREAS, the Executive desires to remain in the Company's employment on the
terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. EMPLOYMENT. Effective as of January 1, 2004 ("the date hereof"), the
Company hereby employs the Executive, and the Executive hereby accepts
employment by the Company, upon the terms and subject to the conditions
hereinafter set forth.
SECTION 2. TERM. The employment of the Executive hereunder shall commence as of
the date hereof and terminate on the fourth anniversary of such date unless
earlier terminated under Section 6 (Termination) or Section 7 (Termination by
the Company for Cause) hereof (the "Initial Term"). Upon the conclusion of the
Initial Term, unless either party shall have given the other written notice of
its intent to terminate not less than ninety (90) days prior to the expiration
of the Initial Term, this Agreement shall automatically renew for additional
terms of one year each (each, a "Renewal Term"), unless terminated in the manner
set forth above.
SECTION 3. DUTIES. The Executive shall be employed as the Chief Executive
Officer and President of the Company, or in such other position as the Company
and the Executive shall agree in writing. The Executive shall perform such
executive duties and services of a responsible nature as are appropriate and
commensurate with the Executive's position. In his capacity as President of the
Company, the Executive shall be subject to the supervision of the Board of
Directors of the Company and shall report directly to such Board of Directors.
Notwithstanding the above, the Executive shall not be required to perform any
duties and responsibilities which would, or would be likely to, result in a
non-compliance with or violation of any applicable law, regulation, regulatory
bulletin, and/or any other regulatory requirement.
SECTION 4. TIME TO BE DEVOTED TO EMPLOYMENT.
(a) Except for four (4) weeks of vacation per year, which the
Executive is entitled to ("Vacation"), absences due to temporary illness, such
holidays as are observed by the Company and traditional and recognized Jewish
holidays, during the Term, the Executive shall devote the business time,
attention and energies necessary to perform his obligations and responsibilities
as the Chief Executive Officer and President of the Company.
(b) During the Term, the Executive shall not be engaged in any other
business activity which conflicts with the duties of the Executive hereunder,
whether or not such activity is pursued for gain, profit or other pecuniary
advantage; provided, however, that the Executive shall be allowed, to the extent
such activities do not substantially interfere with the performance by the
Executive of his duties and responsibilities hereunder, (a) to manage his
personal affairs, and (b) to serve on boards or committees of corporations or
other companies, civic or charitable organizations and/or trade associations.
(c) At all times during the Initial and each Renewal Term hereof,
the Company's principal offices, at which Executive shall be based, shall
continue to be located at 000 Xxxxx 00, Xxxxxx, Xxx Xxxxxx 00000, or elsewhere
within a radius of not more than thirty-five (35) miles from Monsey, New York
unless such other location shall be acceptable to Executive within his sole
determination.
SECTION 5. COMPENSATION; BENEFITS; REIMBURSEMENT.
(a) Base Salary.
(i) The Company shall pay to the Executive during the initial
twelve (12) month period of this Agreement (the "Initial Year"), a salary
(the "Base Salary") of not less than two hundred fifty thousand ($250,000)
dollars, payable in accordance with the Company's standard payroll
schedule. Such Base Salary shall be applied retroactive to the beginning
of 2004.
2
(ii) Thereafter, during each subsequent twelve month period of
the balance of the Initial Term and each Renewal Term (each, a "Contract
Year"), Executive's salary shall be approved by the Company's Board of
Directors; provided, however, that in each Contract Year, the amount of
such salary shall not be less than that paid during the immediately
preceding Contract Year.
(b) Bonus.
(i) With respect to each calendar year, including the year
ending December 31, 2004, the Company shall pay to the Executive a bonus
(referred to generally as the "Bonus") consisting of an amount equivalent
to twenty percent (20%) of the Company's Gross Profit in excess of $2.8
million for the year. For purposes of this Agreement "Gross Profit" shall
mean the Company's total net sales in accordance with GAAP (including
freight revenue) minus the direct cost of goods (including cost of
freight), without any other cost allocation. The Bonus shall not exceed
fifty percent (50%) of the Base Salary in the event the Company realizes a
Net Income for the applicable year or thirty-six percent (36%) of the Base
Salary in the event the Company does not realize a Net Income for the
applicable year. For purposes of this Agreement "Net Income" shall mean
income before taxes in accordance with GAAP (after including the Bonus in
SG&A for the applicable year) but shall be before any deduction for
allocations of DSSI corporate overhead (such as professional fees,
directors' and officers' liability insurance, listing fees etc.) or
management fees, if any.
(ii) Executive may make quarterly draws against the Bonus
equal to 20% of the Company's Gross Profit in excess of $700,000 for the
preceding quarter, provided, however, that no such quarterly draw shall
exceed 30% of the Executive's Base Salary for such quarter. Any draws
shall be reconciled against the Bonus as computed after the end of the
Company's fiscal year.
(c) Reimbursement. The Company shall promptly reimburse the
Executive, in accordance with the Company's policies and practices, for all
reasonable and necessary traveling expenses, disbursements and other reasonable
and necessary incidental expenses incurred by him for or on behalf of the
Company in the performance of his duties hereunder upon presentation by the
Executive to the Company of appropriate receipts and documentation. Executive
shall be entitled to fly business class for any flights in excess of 4 hours
traveling time.
(d) Automobile Allowance. During the Initial Term and each Renewal
Term, the Company shall lease an automobile for Executive or shall pay to
Executive an allowance equivalent to Executive's lease or financing payment
costs for the automobile of Executive's choice and the Company shall pay all of
Executive's insurance, repairs and maintenance, and fuel costs.
(e) Standard Benefits. During the Term and to the extent available
to executives of the Company and DSSI (including its subsidiaries), the
Executive shall be entitled generally to participate in all benefit plans,
welfare and retirement plans, 401(k) plans, life insurance, medical,
3
hospitalization and prescription coverage (individual and family)(collectively
"Medical Insurance"), sick leave, vacation and holiday policies, long-term
disability coverage and such other standard benefits maintained or sponsored by
the Company or its subsidiaries. Notwithstanding the foregoing, (i) the Company
shall pay the premiums on a term life insurance policy selected and owned by the
Executive which total amount of the face value of such policy for any given year
shall be five (5) times the aggregate Base Salary for the preceding year, (ii)
the Company shall pay Executive's premiums for supplemental disability coverage
which shall provide for benefits of up to 80% of Base Pay; and (iii) the
Executive shall be entitled to no less than the following: four (4) weeks of
vacation; five (5) personal days; (5) five sick days; and the Executive will not
be required to work on or utilize vacation or personal days for all traditional
and recognized Jewish holidays.
(f) Stock Grant and Options. Upon execution of this Agreement, DSSI
shall issue to the Executive or his designees, which may include one or more
trusts, under the Company' 1994 Stock Incentive Plan, (i) 100,000 shares of the
common stock of DSSI, as well as an additional 95,000 shares which shall vest in
accordance with the following schedule:
-------------------------------------------------------------------
Vesting Date Number of Shares
-------------------------------------------------------------------
2nd Year Anniversary of the Date Hereof 31,666
-------------------------------------------------------------------
3rd Year Anniversary of the Date Hereof 31,667
-------------------------------------------------------------------
4th Year Anniversary of the Date Hereof 31,667
-------------------------------------------------------------------
and (ii) options (the "Options") to purchase 305,000 shares of the common stock
of DSSI in accordance with the 1994 Stock Incentive Plan, and subject to the
following vesting schedule:
--------------------------------------------------------------------
Vesting Date Number of Options
--------------------------------------------------------------------
24 Month Anniversary of the Date Hereof 105,000
--------------------------------------------------------------------
30 Month Anniversary of the Date Hereof 100,000
--------------------------------------------------------------------
42 Month Anniversary of the Date Hereof 100,000
--------------------------------------------------------------------
The Options shall expire on January 1, 2014 subject to earlier termination upon
termination of employment of the Executive, in which event the Options shall
terminate no earlier than twelve (12) months subsequent to the termination of
employment of the Executive, other than in the event of a Termination for Cause
(as defined in Section 7 hereof), in which event the Options shall terminate
three (3) months subsequent to the termination of employment of the Executive.
In the event of a Change of Control (as defined in Section 6(c) all stock grants
and option grants pursuant to this Section 5(f) shall become immediately fully
vested.
(g) Unused Vacation. All unused vacation will accrue from year to
year.
SECTION 6. TERMINATION FOR DEATH OR DISABILITY; TERMINATION BY THE EXECUTIVE.
(a) If the Executive is incapacitated or disabled by accident,
sickness or other cause so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
4
a period of 180 days or longer (whether consecutively or in the aggregate)
during any twelve-month period (such condition being herein referred to as a
"Disability"), prior to the Executive resuming the performance of his duties as
contemplated herein, the Company may terminate the employment of the Executive
under this Agreement and upon such termination the Executive's employment
hereunder shall terminate.
(b) If the Executive dies during the Term, his employment hereunder
shall be deemed to terminate as of the date of his death.
(c) If there is a Change of Control, and within one (1) year
thereafter the Executive shall have delivered a notice to the Company of the
termination of his employment hereunder, Executive's employment hereunder shall
be deemed to terminate as of the date of delivery of such notice to the Company.
As used herein, the term "Change of Control" shall mean the occurrence with
respect to the Company or DSSI, as the case may be, of any of the following
events:
i. An acquisition of any voting securities of the Company or
DSSI (as the case may be, the "Voting Securities") by any "Person" (as the
term Person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more
of the combined voting power of the then outstanding Voting Securities;
provided that prior to such acquisition such Person had Beneficial
Ownership of less than 50% of the then outstanding Voting Securities;
ii. The individuals who, as of the date hereof, are members of
the Board of DSSI (as the case may be, the "Incumbent Board"), cease for
any reason to constitute at least a majority of such Board; provided,
however, that if the election or nomination for election by the Company's
or DSSI's, as the case may be, stockholders of any new director was
approved by a vote of at least a majority of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board if (A) such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy
Contest"), including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest, or (B) such individual was
designated by a Person who has entered into an agreement with the Company
or DSSI, as the case may be, to effect a transaction described in
subsection (c)(ii)(A)(1) or (c)(ii)(A)(3) below; or (iii) approval by
stockholders of the Company or DSSI, as the case may be, of:
(A) A merger, consolidation or reorganization involving such
company, unless,
5
(1) the stockholders of the Company or DSSI, as the case
may be, immediately before such merger, consolidation or
reorganization, own, directly or indirectly, immediately
following such merger, consolidation or reorganization,
at least a majority of the combined voting power of the
outstanding Voting Securities of the corporation (the
"Surviving Corporation");
(2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least a majority of the
members of the board of directors of the Surviving
Corporation; and
(3) no Person (other than any Person who, immediately
prior to such merger, consolidation or reorganization,
had Beneficial Ownership of a majority or more of the
then outstanding Voting Securities) has Beneficial
Ownership of a majority or more of the combined voting
power of the Surviving Corporation's then outstanding
Voting Securities.
(B) A complete liquidation or dissolution of such company; or
(C) An agreement for the sale or other disposition of all or
substantially all of the assets of such company to any Person.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted percentage of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company or DSSI, as the
case may be, which, by reducing the number of Voting Securities outstanding,
increased the proportional number of shares Beneficially Owned by the Subject
Person; provided that if a Change of Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting Securities by the
Company or DSSI, as the case may be, and after such share acquisition by the
Company or DSSI, as the case may be, the Subject Person becomes the Beneficial
Owner of any additional Voting Securities Beneficially Owned by the Subject
Person, then a Change of Control shall be deemed to have occurred.
(d) If the Company shall have breached a material provision of this
Agreement (including, but not limited to, the Company significantly diminishing
the Executive's his position, duties, authority, or responsibilities or the
Company's breach of its obligations under Section 5 hereof), and such breach
remains uncured for ten (10) calendar days after the notice thereof is delivered
to the Company, than the Executive's employment hereunder shall be deemed
terminated by the Executive upon the expiration of such 10-day cure period.
6
SECTION 7. TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment hereunder for "Cause" (a "Termination for Cause") and
upon such termination the Executive's employment hereunder shall be deemed to
terminate upon the delivery to the Executive of the notice thereof. For purposes
of this Agreement, "Cause" shall be limited to the Executive's (i) willful or
gross misconduct in performing his duties on behalf of the Company or its
subsidiaries or affiliates (including misconduct or fraud which results in
material financial injury to the Company), or (ii) misappropriation of funds,
properties or assets of the Company (including its subsidiaries and affiliates).
SECTION 8. EFFECT OF TERMINATION OF EMPLOYMENT OR NON-RENEWAL.
(a) Upon the termination of the Executive's employment hereunder
pursuant to Section 6(a) or 6(b) hereof, neither the Executive nor his
beneficiary or estate shall have any further rights or claims against the
Company under this Agreement, except (i) to receive payment from the Company to
Executive (or his estate) of Base Salary and a pro rata portion of his Bonus
through the date of Termination, and (ii) all grants pursuant to Section 5(f)
hereof will immediately vest and shall be exercisable in accordance with Section
5(f) hereof.
(b) If this Agreement is not renewed after the Initial Term or any
Renewal Term, the Executive shall have no further rights or claims against the
Company under this Agreement, except to receive payment from the Company of a
lump sum equal to the Base Salary and Bonus provided in Sections 5(a) and 5(b)
for a period of one (1) Contract Year from the date of such Termination; and
(ii) all grants pursuant to Section 5(f) hereof will immediately vest and shall
be exercisable in accordance with Section 5(f) hereof. In such case, the Base
Salary and Bonus required to be paid hereunder shall be equivalent to that paid
or payable for the Contract Year in which such Termination occurred.
(c) Upon a Termination for Cause, the Executive shall have no
further rights or claims against the Company under this Agreement except to
receive the payment of his Base Salary through the effective date of Termination
for Cause.
(d) If the Company shall terminate Executive's employment during the
Term of this Agreement other than for Cause or the Executive shall terminate his
employment hereunder pursuant to Section 6(c) or 6(d) hereof, all grants of
stock and options pursuant to Section 5(f) hereof shall immediately vest (and
shall be exercisable in accordance with Section 5(f) hereof) and the Executive
shall be entitled to an amount equal to:
(i) 2.9 times the Executive's then current Base Salary plus
(ii) 2.9 times the average of the Bonuses which have been paid to the
Executive based upon the three prior years, or, if the Executive has been
employed by the Company for less than three years, 2.9 times the average
of the Bonuses granted based upon all prior years during which the
Executive has been employed by the Company;
(ii) any unpaid portion of the Base Salary provided for in
Section 5(a) (Base Salary), computed on a pro rata basis to the date of
termination;
7
(iii) cash compensation equal to the product of (A) the number
of days of accrued Vacation, if any, accumulated by the Executive to the
effective date of termination divided by the total number of work days per
annum multiplied by (B) the Base Salary and any adjustments which are in
effect at the time of termination;
(iv) reimbursement for any expenses for which the Executive
shall not have theretofore been reimbursed as provided in Section 5(c)
(Reimbursement); and
(v) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs, if any, of the Company or any subsidiary of the Company on a pro
rata basis to the date of termination.
(e) In the event of any termination of employment under this
Agreement, the Executive shall be under no obligation to seek other employment
or to mitigate damages, and there shall be no offset against any amounts due to
the Executive under this Agreement on account of any remuneration attributable
to any subsequent employment that would not constitute a breach of the covenant
set forth in Section 9 (Non-Competition; Non-Disclosure of Information) hereof
that the Executive may obtain. Any amounts due are in the nature of severance
payments, or liquidated damages, or both, and are not in the nature of a
penalty.
SECTION 9. NON-COMPETITION; NON-DISCLOSURE OF INFORMATION.
(a) The Executive shall not during the Initial Term and any Renewal
Term, and for a period of one (1) year following the end of the Initial Term and
any Renewal Term (or earlier termination of the employment relationship for
whatever reason): (i) directly or indirectly engage in any Competitive Business
(as defined below), whether such engagement shall be as an employee, employer,
owner, consultant, partner or other participant in any Competitive Business,
(ii) assist others in engaging in any Competitive Business in the manner
described in the foregoing clause (i), (iii) induce employees of the Company or
any of its subsidiaries or affiliates to terminate their employment with the
Company or any of its subsidiaries or affiliates and accept employment in a
competitive business or engage in any Competitive Business or (iv) solicit
customers or vendors of the Company or any of its subsidiaries or affiliates to
alter or terminate their business relationship with the Company or any of its
subsidiaries or affiliates; provided, however, that the Executive may own
directly or indirectly, solely as a passive investment, securities of any
Competitive Business traded on any national securities exchange or quotation
system if the Executive is not a controlling person of, nor a member of a group
which controls such person and does not, directly or indirectly, own 5% or more
of any class of securities of such person. As used herein, the term "Competitive
Business" shall mean the business of re-selling Hewlett-Packard, Dell Computer
and IBM hardware in New York, New Jersey and Los Angeles, California.
(b) The Executive understands that the foregoing restrictions may
limit his ability to earn a livelihood in a Competitive Business, but he
nevertheless believes that he has received and will receive sufficient
consideration and other benefits (including stock option grants) in connection
with his employment to clearly justify such restrictions. Nothing contained
8
herein shall prohibit the Executive from engaging in a business that is not a
Competitive Business, as long as he remains otherwise in compliance with this
Agreement.
(c) Anything contained in this Section 9 to the contrary
notwithstanding, the enforceability of the provisions hereof by the Company
against Executive shall be entirely conditioned and dependent upon the
observance by the Company of its obligations to Executive hereunder including
the payment by Company to Executive of all amounts provided under subparagraph
5(a), 5(b), 8(a) and 8(b).
(d) The Executive agrees that he will not, at any time during or
after the Term, disclose to any person, firm, corporation or other entity,
except as required by law, a court of competent jurisdiction, or any recognized
subpoena power, or to prosecute claims under this Agreement, any secret or
confidential information not already in, available to or known by the public
domain concerning the business, clients or affairs of the Company or any
subsidiary or affiliate thereof for any reason or purpose whatsoever other than
in furtherance of the Executive's work for the Company or any subsidiary or
affiliate thereof nor shall the Executive make use of any of such secret or
confidential information for his own purpose or for the benefit of any person,
firm, corporation or other business entity except the Company or any subsidiary
or affiliate thereof.
SECTION 10. MUTUAL NON-DISPARAGEMENT. In consideration of the foregoing
provisions of this Agreement, each party agrees that it will not, directly or
indirectly, make or cause others to make any statement or take any action that
could reasonably be construed to be a false or misleading statement of fact or a
libelous, slanderous or disparaging statement of or concerning the Executive,
the Company, its subsidiaries, its affiliates, its businesses or its employees,
officers, directors, agents, consultants or stockholders.
SECTION 11. ENFORCEMENT. It is the desire and intent of the parties hereto that
the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made; provided, however, that if any one or more of the
provisions contained in this Agreement shall be adjudicated to be invalid or
unenforceable because such provision is held to be excessively broad as to
duration, geographical scope, activity or subject, such provision shall be
deemed amended by limiting and reducing it so as to be valid and enforceable to
the maximum extent compatible with the applicable laws of such jurisdiction,
such amendment to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made.
9
SECTION 12. REMEDIES; SURVIVAL.
(a) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of this Agreement shall survive the expiration or other
termination of the Term or this Agreement until, by their terms, such provisions
are no longer operative.
(b) It is understood and agreed that the provisions of Section 9
(Non-Competition; Non-Disclosure of Information) and Section 10 (Mutual
Non-disparagement) of this Agreement are separate and distinct from any other
agreement between the parties hereto. Accordingly, in the event of a breach of
such provisions, the breaching party shall only be held responsible for damages
arising under such provisions and not for any damages which may be claimed to
arise under or with respect to any other agreement that is not separately
breached.
SECTION 13. KEY PERSON INSURANCE. The Company may, for its own benefit, in its
sole discretion, maintain "key-person" life and disability insurance policies
covering the Executive. The Executive will cooperate with the Company and
provide such information as the Company may reasonably request in connection
with the Company's obtaining and maintaining such policies.
SECTION 14. NOTICES. Except as otherwise expressly provided in this Agreement,
any notice, request, demand, statement, authorization or consent made hereunder
shall be in writing and shall be (a) hand delivered or (b) sent by facsimile
followed by receipted U.S. Express Mail or a reputable nationwide private
overnight courier service for delivery on the next business day, and shall in
any case be deemed given when first received at the following addresses:
If to the Executive:
Xxxxxxx Xxxxxxxxxxx
0 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxxx, Esq.
Burnbaum, Xxxxxx
Xxxxxx, Xxxxxxxx & Xxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
10
If to the Company or DSSI:
c/o DSSI
000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
with a copy to:
Xxxxx Xxxxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-986-2399
SECTION 15. BINDING AGREEMENT. This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and devisees. If the Executive
should die while any amount would still be payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the beneficiary designated by the Executive in a
writing delivered to the Company, or if there be no such designated beneficiary,
to his estate.
SECTION 16. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by the
laws of the State of New York, without regard to conflicts of laws principles
thereof. All disputes arising out of or relating to this Agreement shall be
subject to the non-exclusive jurisdiction of the state and federal courts in New
York City, New York to which the parties irrevocably submit. Notwithstanding
this Section 16, either party may commence proceedings or seek remedies before
the courts or any competent authority of any country for interim or
interlocutory remedies in relation to any breach of this Agreement.
SECTION 17. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
SECTION 18. ENTIRE AGREEMENT; AMENDMENTS; EXECUTION. This Agreement contains the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes all prior agreements or understandings among the
parties with respect thereto. This Agreement may be amended only by an agreement
in writing signed by the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original document but
all of which shall constitute but one agreement.
11
SECTION 19. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 20. ASSIGNMENT. With respect to the Executive, this Agreement is
personal in its nature and the Executive shall not assign or transfer this
Agreement or any rights or obligations hereunder. This Agreement and its rights
and obligations herein shall inure to the benefit of, and be binding upon, each
successor of the Company, whether by merger, consolidation, recapitalization,
transfer of all or substantially all assets, or otherwise.
SECTION 21. GUARANTEE. DSSI, by its execution of this Agreement hereunder, in
consideration of the benefits and advantages which accrue and will accrue to it
as the parent of the Company, and in consideration of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, does unconditionally guarantee the
performance of all of the duties and obligations of the Company set forth in
this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Employment Agreement on
August 19, 2004 with an effective date as of January 1, 2004.
/s/ XXXXXXX XXXXXXXXXXX
-------------------------------------
XXXXXXX XXXXXXXXXXX
DATABIT INC.
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
DATA SYSTEMS & SOFTWARE INC.
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President and Chief Financial Officer
12
