EXHIBIT 10.2
MANAGEMENT CONTRACT
MADE AND SIGNED IN ROSH HAAYIN ON APRIL 4, 2003
BETWEEN:
XXXXXX ELECTRONIC ENGINEERING LTD.
of the one part
A N D:
XXXXX XXXXX MANAGEMENT SERVICES LTD.
of the other part
WHEREAS Xxxxxx is a public company whose securities are traded on the Tel
Aviv Stock Exchange; and
WHEREAS the Xxxxxx Group operates and is engaged in the development,
manufacture and marketing of sophisticated and software-intensive
electronic products; and
WHEREAS Xxxxxx wishes to receive from the Management Company management
services, to be provided on Xxxxxx'x behalf by Perry; and
WHEREAS the Management Company is a private company engaged inter alia in the
provision of management services; and
WHEREAS the Management Company wishes to provide Xxxxxx the management
services through Perry; and
WHEREAS the Parties wish to define and establish in this Contract the
substance and scope of the Management Services to be provided by the
Management Company to Xxxxxx and the conditions by which the
Management Services are to be provided to Xxxxxx;
THEREFORE, THE PARTIES HEREBY DECLARE, STIPULATE AND AGREE AS FOLLOWS:
1. PREAMBLE
The preamble and appendices to this Contract form an integral part hereof.
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2. TERMS AND DEFINITIONS
For purposes of this Contract, the terms listed below shall have the
meaning specified alongside them.
2.1 "XXXXXX" - Xxxxxx Electronic Engineering Ltd., Public Co.
00-000000-0, of 00 Xx'xxxx Xx., Xxxx Xxxx, Xxxx Xxxxxx.
2.2 "MANAGEMENT COMPANY" - Xxxxx Xxxxx Management Services Ltd.,
Private Co. 00-000000-0, of 19 Xxxxxx Xxxxx St., Tel Aviv.
2.3 "XXXXXX GROUP" - Xxxxxx and the companies controlled by it.
2.4 "PERRY" - Xxxxx Xxxxx, ID 03232428, of 19 Xxxxxx Xxxxx St., Tel
Aviv.
2.5 "PARTIES" - the Management Company and Xxxxxx.
2.6 "THIRD PARTY" - Anyone who is not a party to this Contract.
2.7 "MANAGEMENT SERVICES" - As defined in clause 4 below.
2.8 "INDEX" - The consumer price index.
2.9 "BASE INDEX" - Index of December 2002, published on January 15,
2003.
2.10 "KNOWN INDEX" - The last index published before the date of the
relevant payment or calculation.
3. THE PARTIES' DECLARATIONS
The Parties hereby declare as follows:
3.1 MANAGEMENT COMPANY'S DECLARATIONS
The Management Company declares and undertakes as follows:
3.1.1 The Management Company has the requisite know-how,
experience and ability for the provision of the
Management Services.
3.1.2 The Management Company undertakes to invest time,
accumulated experience and ability and to utilize Peri's
qualifications for the provision of the Management
Services per this Contract.
3.1.3 The Management Company shall act in full coordination and
cooperation with Xxxxxx for the optimal provision of the
Management Services to Xxxxxx.
3.1.4 The Management Company's entry into this Contract and
performance of its provisions is not in breach of any
contract or undertakings towards any person or entity and
is not contrary to the provisions of any law.
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3.1.5 The Management Company received all the consents and/or
approvals required for entry into this Contract and
performance thereof.
3.1.6 No employer-employee relations exist or shall exist
between the Management Company and Xxxxxx. The Management
Company is Perry's employer and Peri is the Management
Company's employee.
3.1.7 It shall notify Xxxxxx'x board of directors immediately
and without delay concerning any subject or matter in
which the Management Company and/or Perry have a personal
and/or other interest that could create a conflict of
interests with Xxxxxx.
3.2 XXXXXX'X DECLARATIONS
Xxxxxx hereby declares and undertakes as follows:
3.2.1 Xxxxxx shall act in full coordination and cooperation
with the Management Company and/or Perry, in a manner
enabling optimal provision of the Management Services.
3.2.2 Xxxxxx shall make available to the Management Company
and/or Perry all the required information, including
various documents, enabling the Management Company to
render Xxxxxx the Management Services in an optimal
manner.
3.2.3 Xxxxxx shall pay the Management Company for the
Management Services the Management Fee specified in
clause 5, and it shall grant the Management Company the
Options and other payments as detailed in this Contract.
3.2.4 Xxxxxx'x entry into this Contract and performance of its
provisions is not in breach of any contract or
undertaking towards any person or entity and is not
contrary to the provisions of any law.
3.2.5 Xxxxxx received all the consents and/or approvals
required for entry into this Contract and performance
thereof(1).
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(1) The Contract will be signed following approval by Xxxxxx'x general meeting.
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4. THE MANAGEMENT SERVICES
4.1 The Management Services shall be provided by the Management
Company to Xxxxxx through Perry, who shall serve as active
chairman on the board of directors of Xxxxxx and as chairman of
the executive committee of the board of directors of Xxxxxx, and
who by virtue of his position shall be responsible inter alia for
the following:
4.1.1 Outlining of strategy; planning of objectives and targets
for Xxxxxx'x activity in all its operating spheres,
including those implemented through companies of the
Xxxxxx Group.
4.1.2 All the activities which are within the purview of the
chairman of the company's board of directors in
accordance with any law or in accordance with the
company's articles or in accordance with the company's
resolutions from time to time.
4.1.3 Supervision of the implementation and fulfillment of
Xxxxxx'x objectives and targets.
4.1.4 Development of business ties in Israel and abroad on
Xxxxxx'x behalf.
4.2 The Management Services shall be provided personally by Perry.
4.3 The Management Company warrants that for the provision of the
Management Services, Perry shall devote of his time and energy to
the tasks, purposes and duties enumerated above and shall act
faithfully for the promotion of Xxxxxx'x business, on no less a
scope than two days per week (40% position).
4.4 To eliminate doubt, it is hereby clarified that the Management
Company and Perry shall be entitled to engage in additional
occupations, provided that any additional position and/or post
filled by Perry is conditioned on receipt of Xxxxxx'x prior
authorization in writing. Xxxxxx shall not object to the filling
of such additional position and/or post, unless it involves a
conflict of interests with the Company or could affect Peri's
contribution to Xxxxxx and/or its business and/or the fulfillment
of the undertakings (of the Management Company and Perry) per this
Contract. Xxxxxx hereby confirms that it is aware that Peri serves
in the posts listed in APPENDIX A hereto.
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5. MANAGEMENT FEE
5.1 In consideration of the provision of the Management Services and
the fulfillment of the Management Company's undertakings per this
Contract, the Management Company shall receive from Xxxxxx the sum
of NIS 42,000 (forty two thousand shekels) per month (hereinafter:
the "MONTHLY MANAGEMENT FEE").
5.2 Lawful VAT shall be added to the Monthly Management Fee, to be
paid by Xxxxxx to the Management Company together with the Monthly
Management Fee against receipt of a lawful tax invoice.
5.3 The Monthly Management Fee (plus VAT) shall be paid by the 5th of
every month, each month for the Management Services provided in
the preceding month.
5.4 The Monthly Management Fee shall be linked to the increase (but
not decrease) in the Index, from the Base Index to the last Known
Index at the time of actual payment. The Monthly Management Fee
shall be adjusted once a month according to the increase in the
Index.
6. COVERAGE OF EXPENSES
Xxxxxx shall indemnify the Management Company for the business expenses
borne by it in the provision of the Management Services, including but not
limited to travel (in Israel and abroad), per diem and entertainment
expenses.
7. OPTIONS
7.1 In addition to the Monthly Management Fee, directly after the
signature of this Contract, one hundred and twenty thousand
(120,000) options, each convertible into one ordinary share of NIS
1 nominal value of Xxxxxx shall be allotted to the Management
Company (hereinafter: the "OPTIONS").
7.2 The option warrants shall be deposited with a trustee whose
identity shall be determined by consent of Xxxxxx and the
Management Company (hereinafter: the "TRUSTEE").
7.3 The Options shall be exercisable subject to the conditions
detailed hereinafter, in three portions according to the following
specifications and times:
7.3.1 Starting from December 31, 2003 - sixty thousand (60,000)
Options (the "FIRST PORTION").
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7.3.2 Starting from December 31, 2004 - thirty thousand
(30,000) Options (the "SECOND PORTION").
7.3.3 Starting from December 31, 2005 - thirty thousand
(30,000) Options (the "THIRD PORTION").
The Options shall be cumulative, in the sense that the Management
Company shall be entitled to exercise each portion (or a part
thereof) starting from the date when the exercise right first
accrued in respect of that portion and up to the end of one year
from the date of accrual of the right to exercise the Third
Portion as provided in clause 7.3.3 above, i.e. up to December 31,
2006 (the "EXERCISE PERIOD").
At the end of the Exercise Period, the Options shall lapse and
they shall not vest any right in the Management Company.
7.4 The exercise price in respect of each option shall be US$ 16
(sixteen US dollars) per share (the "EXERCISE PRICE"). The
Exercise Price shall be paid according to the representative rate
of the dollar known at the time of the payment thereof, as
provided in clause 7.5 below.
7.5 The exercise of any part of the Options shall be done by way of a
written notice of the Management Company to Xxxxxx (the "NOTICE OF
EXERCISE"), to which shall be attached the full consideration for
the exercise (being - subject to any adjustment in accordance with
Appendix B to this Contract - the amount obtained from the
multiplication of the Exercise Price by the number of Options in
respect of which the Notice of Exercise was given). Within
fourteen (14) days from when Xxxxxx receives the Notice of
Exercise together with the consideration for the exercise, it
shall allot to the Management Company the shares subject of the
Options that were exercised and deliver to the Management Company
share certificates in respect thereof.
7.6 Notwithstanding that stated in clause 7.3 above, in each of the
following cases the Options shall all be exercisable immediately,
starting from the time of the events enumerated below in this
clause and up to the end of the Exercise Period as defined in
clause 7.3 of this Contract: a) If Xxxxxx holds a public offering
(exclusive of an allotment of securities to its employees); or b)
if control of Xxxxxx changes such that the Mivtach Shamir Group
(which holds Xxxxxx shares through Mivtach Shamir Holdings Ltd.)
ceases to be the controlling shareholder in Xxxxxx, including in
case the Mivtach Shamir Group ceases to be the shareholder holding
the largest number of shares in Xxxxxx. "Control" for purposes of
this clause - as defined in the Securities Law 1968. It is hereby
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clarified that in the case indicated in subclause (a) of this
clause (regarding a public offering), the provisions of this
clause 7.6 shall not apply if the offering is held after the date
of Termination of Services as defined in clause 7.9 of this
Contract, in which case the provisions of clause 7.9.4 hereof
shall apply.
7.7 Xxxxxx shall cause the shares allotted pursuant to the exercise of
the Options to be registered for trade on any stock exchange in
which Xxxxxx shares are traded at the time of the exercise (or,
where registration for trade is not permitted at such time by law
- at the earliest possible time permitted by law, as stated), and
it shall bear any expense or cost entailed therein.
7.8 The Options and the Exercise Price shall be subject to the
adjustment rules specified in APPENDIX B hereto.
7.9 In case this Contract lapses or is canceled (hereinafter jointly:
"TERMINATION OF SERVICES"), the following provisions shall apply:
7.9.1 If the Termination of Services occurs during the first
six (6) months after the start of the Management Contract
(hereinafter: the "FIRST PERIOD"), for any reason
whatsoever, the Management Company's right to exercise
the Options or any part thereof shall automatically
lapse.
7.9.2 If and to the extent that the Termination of Services is
initiated by Xxxxxx after the First Period, on a cause
not included among those permitting the denial of
severance pay to an employee (hereinafter: "EXEMPTING
CIRCUMSTANCES"), the following provisions shall apply:
7.9.2.1 The Options which were exercisable up to the
date of Termination of Services shall remain
in force and the provisions of this clause 7
shall continue to apply in regard thereto,
subject as provided in subclause 7.9.2.3
below.
7.9.2.2 The Management Company shall be entitled
immediately to exercise one-half (50%) of the
quantity of Options whose exercise date has
not arrived, upon the conditions specified in
this clause 7, and the remaining Options
whose exercise date has not arrived shall
automatically lapse.
7.9.2.3 The period for the exercise of all the
Options shall be abridged (in relation to the
Exercise Period) and shall be six (6) months
starting from the date of Termination of
Services (the "ABRIDGED EXERCISE PERIOD").
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7.9.3 To eliminate doubt, it is hereby clarified that save in
the cases enumerated in clauses 7.9.4, 7.9.5 and 7.9.6
below, in any case where the Management Company at its
initiative ceases to provide the Management Services,
after the First Period, it shall not be entitled to
exercise the Options whose exercise date had not arrived
on the date of Termination of Services, and the
provisions of subclause 7.9.2.2 above shall not apply,
while the Options whose exercise date had arrived on the
date of Termination of Services shall be exercisable
within the Abridged Exercise Period as defined in
subclause 7.9.2.3 of this Contract.
7.9.4 Notwithstanding that stated in clauses 7.9.1, 7.9.2 and
7.9.3, in the event that Xxxxxx holds in the course of
2003 a public offering of shares or convertible
securities (exclusive of an allotment of securities to
its employees), the Management Company shall be entitled
to exercise the First Portion of the Options as defined
in clause 7.3.1 above during the Abridged Exercise
Period, even if on the date of Termination of Services
the exercise date of the Options subject of the First
Portion had not arrived, and even where the Services were
terminated in the circumstances enumerated in clauses
7.9.1, 7.9.2 and 7.9.3, such that if not for the
provisions of this clause the Management Company would
not have been entitled to exercise the Options subject of
the First Portion, but excluding a case where the
Management Contract was canceled by Xxxxxx due to
Exempting Circumstances.
7.9.5 Notwithstanding that stated in clauses 7.9.3 and 7.9.4
above, insofar as the Termination of Services comes after
the First Period, due to Perry assuming a position which,
at Xxxxxx'x discretion, is a public position of national
importance, the Management Company shall be entitled to
exercise all the Options in accordance with this clause
7, at the times and upon the conditions as it would have
been entitled if not for the Termination of Services as
stated.
7.9.6 Notwithstanding that stated in clauses 7.9.1, 7.9.2,
7.9.3 and 7.9.4 above, in any case where the Management
Company ceases to provide Xxxxxx the Management Services
according to this Contract due to Perry's inability to
fill the position by reason of his incapacity or death
(God forbid), the Management Company shall continue to be
entitled to exercise the Options in accordance with this
clause 7, at the times and upon the conditions as it
would have been entitled if not for the Termination of
Services as stated.
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7.10 The Management Company confirms that it is aware of the
restrictions on the buyback of securities in section 15C. of the
Securities Law 1968.
8. TAXES
Without derogating from the provisions of this Contract that expressly
stipulate otherwise, each of the Parties hereto shall bear the taxes
imposed on it by law. To eliminate doubt, it is hereby clarified that the
Management Company shall bear the taxes applying to receipt of the
Management Fee and receipt and/or exercise of the Options by the
Management Company.
9. CONTRACT PERIOD
9.1 This Contract is for a period of 36 months, commencing February 9,
2003 and ending February 8, 2006 (hereinafter: the "FIRST CONTRACT
PERIOD"). Starting from the end of the First Contract Period, the
Contract shall be renewed automatically at the end of each year
for a further 12 months (each extension period is hereinafter
referred to as: the "ADDITIONAL PERIOD"), unless either of the
Parties notifies the other ninety (90) days before the end of the
First Contract Period or the end of the Additional Period, as the
case may be, of its wish not to renew the Contract (the First
Contract Period and the Additional Period are referred to jointly
as: the "CONTRACT PERIOD").
9.2 Notwithstanding all the foregoing, each party shall be entitled to
terminate this Management Contract without any explanation and/or
reason, by a written notice tendered to the other party ninety
(90) days in advance. Notwithstanding that stated, in the course
of the First Period as defined in clause 7.9.1 above, each party
shall be entitled to terminate this Management Contract without
any explanation and/or reason, by a written notice tendered to the
other party thirty (30) days in advance. Where notice as stated
was tendered by either of the Parties, this Contract shall
terminate at the end of the period of notice (as aforesaid), and
subject to fulfillment of the Parties' undertakings per this
Contract (including the Parties' undertakings per clauses 7.9 and
14 hereof), neither of the Parties shall have any contention
against the other.
10. TERMINATION OF CONTRACT
In the following cases, this Contract shall lapse immediately upon the
occurrence of the event described below:
10.1 If and when either of the Parties enters into liquidation and/or
receivership proceedings. "Entry into proceedings" for purposes of
this clause - the issuance of a provisional and/or permanent
liquidation and/or receivership order.
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10.2 If and when the Management Company ceases to provide the
Management Services through Peri.
11. ENDORSEMENT
The Parties may not endorse the rights and obligations deriving from this
Contract to any Third Party, in whole or in part, without receiving the
other party's written authorization.
12. STATUS - EMPLOYER-EMPLOYEE RELATIONS
12.1 Save as provided in this Contract, the Management Company and/or
Peri shall not be entitled to any additional consideration from
Xxxxxx and/or the Xxxxxx Group in respect of the Management
Services.
12.2 The Management Company declares and undertakes that no
employer-employee relations exist or shall exist between Peri and
Xxxxxx, and Xxxxx shall fill his position as active chairman of
the board of directors per this Contract in the framework of the
Management Company. The Management Company shall indemnify Xxxxxx
for any expense, payment or loss resulting from a claim filed by
the Management Company and/or Perry and/or anyone on their behalf
against Xxxxxx on the cause of the existence of employer-employee
relations between Xxxxxx and Perry.
13. NONDISCLOSURE
13.1 The Parties hereby agree to maintain absolute confidentiality on
information conveyed between the parties in connection with this
Contract and the provision of the Management Services hereunder.
13.2 The Parties hereby agree that disclosure and/or conveyance and/or
divulgence of information as aforesaid shall be permitted only
after receipt of the other party's prior written consent, save
where disclosure of the information is required by law or upon the
demand of a competent authority and provided that the other party
to the Contract was given notice concerning the obligation to
disclose such information, and if it so desires - an opportunity
to prevent said disclosure.
13.3 The Management Company shall refrain, directly and indirectly, and
shall ensure that Perry too refrains (directly or indirectly) from
using or disclosing for their benefit and/or for the benefit of
others know-how and/or information of the Xxxxxx Group and/or
about the Xxxxxx Group and/or about its business and/or about its
officers, and any other information reaching them during the
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course of providing the Management Services and/or in connection
therewith, other than through the Xxxxxx Group.
14. INSURANCE AND INDEMNITY
X. Xxxxx shall be entitled to compensation on Xxxxxx'x accepted terms
and scope for its other directors.
B. Throughout the Contract Period and during a period of seven (7)
years thereafter, Xxxxxx shall purchase and pay for insurance cover
under a policy covering the liability of officers at Xxxxxx, which
shall cover as well Perry's activity on Xxxxxx'x behalf throughout
the Contract Period, all on Xxxxxx'x accepted terms and scope for
its other directors.
15. DIFFERENCES OF OPINION AND ARBITRATION
Excluding those matters which the Umpire is authorized to decide, all
differences of opinion arising between the Parties in any matter
pertaining to or deriving from this Contract, including in connection with
the performance, breach or interpretation of the Contract (the "DISPUTE"),
which the Parties hereto are unable to settle in discussions between them
held during a period of thirty (30) days from when a party to this
Contract gave the other party written notice concerning the Dispute, shall
be referred to the decision of the Arbitrator as hereinafter defined. The
provisions of this clause shall be deemed as an arbitration agreement
between the Parties. The provisions of the Arbitration Law, including the
schedule thereto, shall apply to the Arbitrator and to the arbitration
proceedings. The Arbitrator shall be subject to substantive law, but not
to the rules of procedure or the laws of evidence. The Arbitrator shall be
authorized to issue interim orders, including injunctions, enforcement
orders and any other order which a court is competent to issue. /The
arbitral award shall be handed down as soon as possible.
"ARBITRATOR" - The retired district judge Xx. Xxxxx Xxxxx, or if he is
incapable of or prevented from serving as arbitrator for any reason, a
retired judge who served on the district court or on the Supreme Court,
whose identity shall be determined by consent of the Parties, and in the
absence of consent - by the President of the Israel Bar Association.
16. JURISDICTION
Subject as provided in this Contract in the matter of the Umpire and in
the matter of arbitration, jurisdiction in all matters pertaining to or
deriving from this Contract, including the performance, breach or
interpretation thereof, shall be vested exclusively in the competent
courts of Tel Aviv, and no others.
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17. MISCELLANEOUS
17.1 This Contract embodies the full and exhaustive contract between
the Parties on the subjects and matters referred to herein, and it
replaces and voids any representation, contract, negotiations,
practice, memorandum, proposal, summary, letter of intent and/or
undertaking prevailing, signed or exchanged (whether orally or in
writing) on the said subjects and matters between the Parties
prior to the signature hereof.
17.2 Drafts and other documents exchanged between the Parties prior to
the signature of this Contract shall be deemed as not having been
made, and they shall not serve in any manner or fashion as
evidence or substantiation with respect to the interpretation of
the Contract or a claim thereunder. In case of deletions in the
Contract, the deleted words shall be deemed as not having been
written, and they shall not serve in any manner or fashion as
evidence or substantiation with respect to the interpretation of
the Contract or a claim thereunder.
17.3 The Parties shall take all further measures as required for the
implementation and performance of this Contract in letter and
spirit.
17.4 The consent of either of the Parties to deviate from any condition
of this Contract in a certain case or in a series of cases, shall
not serve as a precedent or provide an analogy for another
subsequent case.
17.5 If either of the Parties fails to exercise any of the rights
available to it under this Contract in a certain case or in a
series of cases, this shall not be deemed as the waiver of such
rights in another case, and no waiver of any of the rights and
obligations under this Contract shall be inferred from such
conduct.
17.6 The provisions of this Contract shall not confer rights on any
Third Party, and the provisions hereof shall not serve as evidence
or as a basis for a contention concerning the existence of third
party rights.
18. NOTICES AND ADDRESSES
The Parties' addresses for purposes of this Contract are as stated above,
and any notice sent to either of the Parties shall be deemed to have been
received at the end of 72 hours from the dispatch thereof by registered
post, or at the end of 24 hours from the delivery thereof by a messenger
and/or from the transmission thereof by fax.
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IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS HERETO:
/s/ Xxxxx Xxxxx /s/ Xxxxx Xxxxx
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XXXXXX ELECTRONIC XXXXX XXXXX MANAGEMENT
ENGINEERING LTD. SERVICES LTD.
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APPENDIX A
1. Chairman of the board of directors at United Mizrachi Bank.
2. Director at Magal Security Systems Ltd.
Provided the scope of both posts together does not exceed (in the aggregate) 60%
of a full-time position.
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XXXXXXXX X
1. DIVIDENDS. Should Xxxxxx distribute a dividend, and where the date set for
the distribution thereof occurs AFTER the date of allotment of the option
warrants but before the actual date of exercise thereof, the amount of the
dividend per share, in dollar-linked values calculated according to the
representative rate of the dollar known on the date of payment of the
dividend, shall be subtracted from the exercise price. Where the dividend
is a non-cash dividend (but excluding bonus shares, in respect of which
clause 2 below shall apply), the amount of the dividend shall be based on
the economic value of the assets subject of that dividend, as determined by
an economic appraiser prior to the performance of the distribution; and in
the absence of an economic appraisal - based on the market value of that
asset (insofar as it is a marketable asset) or on the book value of that
asset in Xxxxxx'x financial statements - whichever is higher.
2. BONUS SHARES; SPLIT OR CONSOLIDATION.
2.1 Should Xxxxxx distribute bonus shares, and where the date of record
for the distribution thereof occurs AFTER the date of allotment of
the relevant option warrants but before the actual date of exercise
thereof, the number of shares to which the Management Company is
entitled upon the exercise of the options shall increase according
to the number of shares to which the Management Company would have
been entitled as bonus shares had it exercised all the options
before the date of record for distribution of the bonus shares.
2.2 The exercise price of each option shall not change as a result of
the increase in the number of shares to which the Management Company
is entitled following the distribution of bonus shares as stated,
but the payment for each share shall decrease accordingly. Similar
adjustments shall be made in the case of the split (or
consolidation) of Xxxxxx shares.
3. RIGHTS ISSUE.
In case of a rights issue by Xxxxxx to its shareholders for the purchase of
Xxxxxx shares, including securities convertible into Xxxxxx shares,
identical rights shall be offered to the Management Company in the same
quantities as it could have been offered had it been entitled to exercise
all the options before the date of record for distribution of the rights,
at the price payable for the exercise of the rights, where exercise thereof
is conditioned by the terms of issue on any payment. Said payment for the
exercise of the rights shall be made at the time of the exercise of the
relevant options, linked on basis of the "last known index" up to the known
index on the date of exercise of the options, the base index being the
known index on the final date for the exercise of the rights by the
shareholders. The exercise amount including linkage differences shall be
certified by Xxxxxx'x CPA.
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If in the framework of the rights issue Xxxxxx issues any convertible
securities whose final date of exercise precedes the final date of exercise
of the options or any of them, the Management Company shall be entitled to
exercise the rights in respect of such convertible securities before the
exercise of the options, provided it pays for the rights the price which by
the terms of issue of the convertible securities is payable thereon,
insofar as exercise thereof is conditioned upon any payment, at the time of
the exercise of the convertible securities.
4. PROVISIONS WITH RESPECT TO REGISTERED CAPITAL. Xxxxxx shall retain a
sufficient quantity of ordinary shares of NIS 1 NV in its registered
capital, and it shall take all other measures as necessary to enable it to
implement the provisions of the Management Contract with respect to the
options to which the Management Company is entitled and the provisions of
this appendix.
5. UMPIRE. Any disagreement in the matter of the required adjustments under
this appendix shall be decided by the CPA Umpire as hereinafter defined,
who shall act as an umpire (and not as an arbitrator) on behalf of the
parties and whose decision shall be final, unappealabe and uncontestable.
The "Umpire" - Prof. Xxxxxxx Sawary, or if he is incapable of or prevented
from serving as umpire for any reason, a CPA of good repute upon whose
identity the parties shall agree, and in the absence of agreement - whoever
is appointed in this regard by the President of the Institute of Certified
Public Accountants in Israel.
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TO:
Xxxxxx Electronic Engineering Ltd.
In the event that, pursuant to a claim filed by me or by Xxxxx Xxxxx Management
Services Ltd. 51-322092 (hereinafter: the "MANAGEMENT COMPANY") on the cause of
the existence of employer-employee relations between me and you during the
period in which management services were provided to you by the Management
Company, a competent court rules that employer-employee relations exist and/or
existed as stated, I give you my irrevocable undertaking to repay you, whether
by myself or through the Management Company, 30% (thirty percent) of any amount
which the Management Company received and/or shall receive from you in respect
of the period during which management services were provided to you by the
Management Company. The amount shall be repaid to you linked to the consumer
price index from the index for December 2002 (published on January 15, 2003 and
up to actual payment thereof.
I am aware that you are entering into an agreement with the Management Company
in reliance on this undertaking.
Sincerely yours,
/s/ Xxxxx Xxxxx
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