Ex 4.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into as of the May 5,
2002, by and between Supercom Ltd. (the "COMPANY") and Mr. Avi Xxxxxxxxx, I.D.
number 059682526 (the "Employee").
WHEREAS, the Company desires to employ the Employee as CEO of the Company and
the Employee desires to enter into such employment, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the respective agreement of the parties
contained herein, the parties agree as follows:
1. TERM
The term of employment under this Agreement shall commence on 17.3.2002
(the "EFFECTIVE DATE").
2. EMPLOYMENT
(a) The Employee shall be employed as CEO of the Company. The
Employee shall perform the duties, undertake the
responsibilities and exercise the authority customarily
performed, undertaken and exercised by persons situated in a
similar capacity.
(b) The Employee shall be in charge of the operation of the
Company and, subject to the decisions of the board of
directors of the Company, shall have full autonomy and
authority in all developments methods, marketing and sales,
business development, strategic partnerships and manpower
subjects and all other related issues (IR, PR etc.), Excluding
investment policy/actions in the Company of which the Employee
shall be instructed by and subject to the board of directors
of the Company.
(c) Excluding periods of vacation and sick leave to which the
Employee is entitled hereunder, the Employee agrees to devote
total attention, full time, at his working hours, to the
business and affairs of the Company as required to discharge
the responsibilities assigned to the Employee hereunder. The
Employee's duties shall be in the nature of management duties
that demand a special level of loyalty and accordingly the Law
of Work Hours and Rest - 1951 shall not apply to this
Agreement. During the term of this Agreement the Employee
shall not be engaged in any other employment nor engage in any
other business activities for any other person, firm or
company without the prior written consent of the Company.
(d) The Employee warrants that in view of his position, his
agreement with the Company is a personal agreement and this
Agreement will accordingly not be governed by any collective
agreement and/or various extension orders, unless expressly
provided otherwise herein.
(e) The Company shall purchase and maintain a directors and
officers liability insurance in the name of the Company,
covering all the Employee's duties under this Agreement and
subject to any applicable law.
3. BASE SALARV
The Company agrees to pay or cause to be paid to the Employee during
the term of this Agreement a monthly gross base salary in the amount of
53,000 (fifty-three thousand) NIS (the "BASE SALARY"). The base salary
shall be updated according with the consumer-pricing rate every three
(3) months
4. EMPLOYEE BENEFITS
The Employee shall be entitled to the following benefits:
(i) MANAGER'S INSURANCE. At the end of each month during the
employment of the employee hereunder, the Company will pay to
an insurance company of the Company's choice as premium for
manager's insurance for the Employee, an amount equal to 13.3%
of the Base Salary together with up to 2.5% of the Base Salary
for disability, and will deduct from each payment of the Base
Salary and pay to such insurance company an amount equal to 5%
of the Base Salary, which shall constitute the Employee's
contribution to such premium.
The Company covenants and undertakes to transfer the ownership
in the above mentioned insurance policies to the Employee upon
termination of the Employee's employment with the Company and
to take all such actions necessary to effect the same,
provided, however, that the Company shall not be obliged to
the above mentioned undertaking if the Employee's employment
was terminated for Cause pursuant to Articles 6(a) and 6(c)
hereunder, or if the employment was terminated due to the
resignation of the employee.
(ii) KEREN HISHTALMUT FUND. At the end of each month during the
employment of the Employee hereunder, the Company will pay an
amount equal to 7.5% (seven and one-half percent) of the Base
Salary to a Keren Hishtalmut Fund designated by the Employee
(the "FUND") ("the Company's Payment to the Fund"), and will
deduct from each payment of the Base Salary and pay to such
Fund an amount equal to 2.5% of the Base Salary, which shall
constitute the Employee's contribution to such Fund, provided.
(iii) SICK LEAVE. The Employee shall be entitled to fully paid sick
leave pursuant to the Sick Pay-Law - 1976.
(iv) VACATION. The Employee shall be entitled to an annual vacation
of 24 working days at full pay. A "working day" shall mean
Sunday to Thursday inclusive. Vacation days may be accumulated
and may, at the Employee's option, be converted into cash
payments in an amount
equal to the proportionate part of the Base Salary for such
days to the extent provided by law.
(v) DMEY HAVRA'A The Employee shall be entitled to 12 days Dmey
Havra'a per year, as provided in a Collective Bargaining
Agreement to which the General Labor Union of the Workers in
Israel is a party, regarding the payment of Dmey Havra'a that
is in force and effect
(vi) AUTOMOBILE. During the term OF this Agreement, the Company
shall, on its own expense, provide the Employee with a car
(the "CAR"), for his use. Such car shall be in a level
suitable for the Employee's position as CEO (at least
2,500cc).
The Company shall be liable for any tax duty under any
applicable law, that the Employee may be required TO PAY
derived form his the use of the Car.
For the avoidance of doubt, it is hereby emphasized that the
Company shall not be obliged to pay any fines related to the
use of the Employee's automobile.
(vii) MOBILE PHONE. The Company shall provide the Employee with the
Company-owned mobile phone, including reimbursement of all
related maintenance, repairs, insurance and other costs. The
model of the Company-owned mobile phone, shall not defer from
those customary for persons situated in a similar capacity.
The Company shall pay any tax that the Employee may be
required to pay for the use of the Company-owned mobile phone.
In addition the Company will provide the Employee with a phone
line at the residence of the Employee and will pay the cost of
its use, which is related to his work in the Company,
including any tax that may be required.
(viii) BUSINESS EXPENSES. The Company shall reimburse the Employee
for reasonable expenses that the Executive may reasonably
incur in connection with the performance of his duties
hereunder.
The reimbursement of such expenses shall be made in accordance
with the Company's procedures for such matters.
5. OPTIONS TO PURCHASE SECURITIES
Further to any option the Employee may hold at the date hereof, the
Employee shall be granted also with 70,000 (seventy thousands) options
("OPTIONS") according with the Company's employee stock option plan.
All terms and conditions regarding the issuance and exercise, and
exercise price including the vesting periods, of any such options shall
be as provided for in the Company's' employee stock option plan.
6. TERMINATION
(a) RESIGNATION. The Employee shall not resign from his position
at the Company without giving a prior written notice (the
"PRIOR NOTICE") to the Company at least 90 (ninety) days prior
to the date on which the Employee plans to leave the employ of
the Company.
(b) CAUSE. The Company may terminate the Employee's employment for
Cause. Termination for "CAUSE" shall be limited to: (i)
Employee's conviction of any crime constituting an act of
moral turpitude; (ii) Employee's embezzlement of funds of the
Company; (iii.) Employee's willful disregard of lawful and
proper instructions of the Board with respect to Employee's
duties to the Company following a notice stating the nature of
such Board instruction; (iv) any willful breach by the
Employee of his fiduciary duties as an officer of the Company
pursuant to court decision; Provided, however, that the
Company may not terminate the Employee's employment for cause
unless it has given the Employee (i) written notice of the
basis for the proposed termination and (ii) at least ninety
days (90) in which to cure such basis.
(c) WITHOUT CAUSE. The Company may terminate the Employee's
employment without cause, provided, however that the Employee
is given a 90 (ninety) days prior written notice. In case of a
change in the ownership structure of the Company, the Company
may terminate the Employee's employment without cause,
PROVIDED, HOWEVER that the Employee is given a 180 (one
hundred and eighty) days prior written notice.
For the removal of any doubt, during such prior notice period, the
Employee shall be entitled for all the benefits under this Agreement
whether he shall act as the Company's CEO or not, and all subject to
this Agreement.
7. CONFIDENTIALITY; PROPRIETARY RIGHTS
(a) CONFIDENTIALITY. Employee recognizes and acknowledges that the
systems (including specifications, programs and
documentation), the methods and data, and the developments,
designs, inventions, improvements, trade secrets and works of
authorship, which the Company, or any employee thereof, owns,
plans or develops (whether for its own use or for use by its
clients) are confidential and are the property of the Company.
All of these materials and information will be referred to
below as "PROPRIETARY INFORMATION".
The Employee further recognizes and acknowledges that any
discoveries, developments, designs, inventions and
improvements, directly or indirectly related to the business
of the Company or its clients ("Creations") made or acquired
by him and whether or not made or acquired by him in business
hours or at the premises of the Company and whether or not
made or acquired with the assistance of material supplied by
the Company and whether or not made or
acquired with the assistance of material supplied by the
Company and whether or not the EMPLOYEE SHALL have been
requested by the Company to make or acquire such Creations
shall belong to the Company.
Upon request, the Employee will execute any instrument
required to vest in the Company complete title and ownership
to such Creations, and will at the request and expense of the
Company execute any necessary instrument to obtain legal
protection in Israel and foreign countries for such Creation
and for the purposes of vesting title thereto in the Company,
all without any additional compensation of any kind to the
Employee.
(b) NON-DISCLOSURE. Employee agrees that, except as directed by
the Company, he will not, during the term of this Agreement
and for an unlimited period of time thereafter disclose to any
person or use, directly or indirectly for Employee's own
benefit or the benefit of others, any Proprietary Information,
or permit any person to examine or make copies of any
documents which may contain or be derived from Proprietary
Information.
8. COMPETITIVE ACTIVITY
The Employee undertakes not, directly or indirectly (whether as owner,
partner, consultant, employee or otherwise) at any time, during and for
two years following the Commencement Date, to engage in any work or
activity that is competitive with the Company's activities or products
actively marketed or under active development by the Company, nor to
solicit any employee of the Company to resign from or otherwise leave
the employment of the Company. As defined in this Article 8, the term
"Commencement Date" shall mean the date in which the Employee
terminated his employment with the Company, or the date in which the
Employee ceases to be, directly or indirectly (including holdings by a
Family Member), an Interested Party at the Company, whichever comes
later. For the purpose of this Article 8 the terms "Interested Party"
and "Family Member" shall have the same meanings as such terms are
defined in Section 1 of the Israeli Securities Law, 1968.
9. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed
to have been duly given when personally delivered or sent by registered
mail, postage prepaid, addressed to the respective addresses set forth
below or last given by each party to the other. All notices and
communications shall be deemed to have been received on the date of
delivery thereof, except that notice of change of address shall be
effective only upon receipt.
The initial addresses of the parties for purposes of this Agreement
shall be as follows:
The Company: 3 Tidhar st, Raanana
The Employee: Hagaon Eliyho 16 Ramat-Gan
10. MISCELLANEOUS
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
and signed by the Employee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provisions of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made either party which are not expressly set forth in this Agreement.
11. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Israel.
12. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings, and
arrangements, oral or written, between the parties hereto with respect
to the subject matter hereof.
13. HEADINGS
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has executed this Agreement as of the
day and year first above written.
THE COMPANY
By:_______________________ _________________________
NAME: XXX XXXXX The Employee
Title: Chairman of the Board
