EMPLOYMENT AGREEMENT
Made and Signed in Jerusalem this 14th day of November, 1996
BETWEEN: I.T.I. Innovative Technologies Ltd.
Digital Building
HaMarpe St.
Har HaHotzvim
Jerusalem
(hereinafter: the "Company")
of the First Part
AND: Simon (Xxxxxx) Xxxx
of 00/00 Xxxxxxxx Xx.
Xxxxxxxxx 00000
(hereinafter: "the Employee")
of the Second Part
WHEREAS: the Company and the Employee desire to define the conditions of the
Employee's employment by the Company in accordance with the terms and
conditions following;
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
Preamble
1. The Preamble hereto constitutes an integral part hereof.
Employment
2. The Company hereby continues the employment of the Employee and the
Employee hereby agrees to continue his employment upon the terms and
conditions contained herein.
3. The Employee is engaged as an executive vice president of the Company.*
In that capacity the Employee may be required to provide services to
the Company's related companies though the Employee will be employed
only by the Company. The Employee's responsibilities will include
functioning as the Company's chief technical officer, managing the
Company's research and development program, aiding the Company's
President and Chief Executive Officer to manage the Company and plan
for its future development and oversee the work of the Chief Financial
Officer of the Company. The precise services of the Employee may be
extended or curtailed, from time to time, at the direction of the
Company. The Employee shall devote the Employee's entire working time,
attention and energies to the business of the Company, and shall
assume and perform such further reasonable responsibilities and duties
as may be assigned to him from time to time by the Company. The
Employee is aware that his position is a senior management position
* Xxxx may also serve as the executive V.P for the parent company
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which requires that the Company place special reliance on the
Employee's personal responsibility and therefore that the Overtime and
Weekly Rest Law, 5711-1951 shall not apply to the employment of the
Employee. The Employee is also aware that his position may require
travel, which at times may be extensive.
Salary
4. For the services rendered by the Employee to the Company, the Company
shall pay the Employee a gross salary at the rate of US$9,166.67 per
month, or as otherwise shall be agreed upon from time to time by the
parties hereto. Payments of salary shall be made monthly by the 2nd of
the calendar month (or if that day is not a business day, on the next
business day) for the month preceding and shall be made in New Israeli
Shekels according to the Representative Rate known as of the morning
of the 1st of the calendar month during which they are being paid.
Such linkage to the US Dollar shall be on account of and deductible
from any cost of living index increment (Tosefet Yoker) which the
Company may be obligated to pay to the Employee. The Parties will
review the Employee's salary and benefits package annually near the
beginning of every January beginning January 1, 1998. The Company's
undertaking to conduct such review shall not be interpreted as
imposing an obligation on the Company to increase the Employee's
salary as a result thereof.
Other Benefits
5. The Company shall open a Bituah Menahelim policy which it will own but
which will be in the name of the Employee, which will be funded -
except where indicated otherwise - by the Company and which will
contain the following elements:
a) 8 1/3 % of Employee's gross salary , as savings on account of
severance pay (Pitzuei Piturin) for the Employee;
b) 10% of the Employee's gross salary, in a savings plan (Kupat
Gemel). Half of the 10% (5%) will be deducted from the
Employee's gross salary;
c) 2 1/2% of the Employee's gross salary, as disability
insurance of which the Employee will be the beneficiary.
Should the Employee be entitled to receive payments as a
result of his disability at a time during which he is also
entitled to receive Dmei Mahala from the Company, the
payments to which he is entitled will be regarded as on
account of the Company's concurrent obligation to pay him
Dmei Mahala.
6. a) Upon the cessation of the Employee's employment with the
Company, as a result of firing or as a result of the
Employee's resignation, the Company will transfer to the
Employee the
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ownership of the portion of the policy mentioned in
Sub-Clause 5(b) which was contributed by the Employee.
b) Further, upon the cessation of the Employee's employment with
the Company, as a result of firing, the Company will transfer
to the Employee the ownership of the portion of the policy
mentioned in Sub-Clause 5(a) and of the half of the portion
of the policy mentioned in Sub-Clause 5(b) which was paid by
the Company, provided that the Employee was not fired in
circumstances in which the Company would not be obligated
under law to pay Pitzuei Piturin or under circumstances which
involved a serious violation of the Employee's obligations to
the Company, and further provided, that prior to such
transfer the Employee sign a declaration in the following
form:
"I hereby declare that after receiving the transfer of the
ownership of the Keren Pitzuim portion of the Bituah
Menahelim policy maintained by I.T.I. Innovative Technology
Ltd. with regard to me, I shall have no further claims of any
kind against I.T.I. Innovative Technology Ltd. for any sum to
which I might be entitled as a result of the cessation of my
employment, including Pitzuei Piturin."
c) Further, upon the cessation of the Employee's employment with
the Company, as a result of the Employee's resignation, the
Company will decide - in its exclusive discretion (the
reasonableness of which the Employee will not be entitled to
dispute) - whether to transfer to the Employee the ownership
of the portion of the policy mentioned in Sub-Clause 5(a) and
of the half of the portion of the policy mentioned in
Sub-Clause 5(b) which was paid by the Company. The Employee
will have no cause of action against the Company should it
decide not to transfer the aforementioned portions of the
policy to the Employee. Should the Company decide to transfer
the aforementioned portions, it will do so only if prior to
such transfer the Employee signs a declaration in the
following form:
"I hereby declare that after receiving the transfer of the
ownership of the Bituah Menahelim policy maintained by I.T.I.
Innovative Technology Ltd. with regard to me, I shall have no
further claims of any kind against I.T.I. Innovative
Technology Ltd. for any sum to which I might be entitled as a
result of the cessation of my employment, including Pitzuei
Piturin."
7. The Company shall open a Keren Hishtalmut for the Employee. The
Employee shall contribute 2 1/2% of his gross salary (which will be
deducted from his gross salary) and the Company shall contribute 7
1/2% of the Employee's gross salary. The Employee shall be entitled to
make such disposition of the Keren Hishtalmut as he may desire.
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8. In the event that any payment or part of a payment to be made by the
Company or deducted from the Employee's salary in accordance with
Clauses 5(b), 5(c) or 7 above requires additional withholding from the
Employee's salary in order for the Company to satisfy its obligations
under law to the tax authorities, then the Company shall be entitled
to reduce such payment such that the total cost to it will equal the
percentage of the Employee's gross salary which is specified in those
Clauses. In such case, the Company will accept instructions from the
Employee as to the ways in which such payments will be made (including
payment directly to the Employee instead of to the policy or the Keren
Hishtalmut), provided that such instructions will not increase the
total cost to it beyond the percentage of the Employee's gross salary
which is specified in those Clauses. It is specifically stated that
this Clause does not apply to payments in accordance with Clause 5(a)
above.
9. The Employee will be entitled to the use of a car the purchase price
of which to the Company will be roughly US$20,000 plus VAT and the
Company will bear the cost of gas, insurance, and maintenance of the
car. Should a claim be made on the car's insurance which is subject to
a "deductible" by the insurance company, the amount of such deductible
up to NIS 2,000 will be refunded to the Company by the Employee.
Should the Employee decide to add members of his family other than
himself as insured drivers under the car's insurance, and should such
addition increase the cost of such insurance, then the Employee will
bear the incremental increase. The Parties have agreed that the issue
as to whether the Employee's benefits under this Clause will be net of
any taxation to him (and that, therefore, the Company will have to
gross-up his salary) or not will be decided between them as soon as
possible after the signature of this Agreement.
10. The Employee shall be entitled to vacation, sick pay, holidays and
payment for periods of reserve duty in accordance with the Company's
published employment policy. The Company shall be entitled to change
that policy from time to time and the Employee shall not be entitled
to claim that such change does not apply to him and that he is
entitled to rely on the employment policy in force at the time of the
beginning of his employment or at any later time. The Employee will
take vacation only after receiving the Company's approval.
11. Other than as expressly provided herein or as mandated by law, the
Employee shall not be entitled to any other rights or benefits.
Taxation
12. The Company will deduct taxes at source from the Employee's gross
salary, including the employee's portion of payments to the National
Insurance Institute, as required by law.
Term
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13. This Agreement shall commence on the date hereof. The Employee
undertakes to continue his employment with the Company, and the
Company undertakes to continue the employment of the Employee, until
at least December 31, 1997. After the aforesaid date, either party
shall be entitled to terminate this Agreement by giving the other
party notice of termination at least sixty (60) days prior to the
effective date of termination. The date of mailing of the notice shall
constitute commencement of the notice period.
Non-Disclosure of Confidential Information
14. The Employee agrees, during the term of employment and forever
thereafter, to keep confidential and not to use himself all
information provided by or related to the Company including, without
limitation (i) information relating to the software, algorithms,
computer processing systems and techniques with which the Employee
becomes familiar as an employee of the Company, (ii) information and
material relating to any customer, vendor, licensor, licensee, or
other party transacting business with the Company, (iii) information
as to sources of, and arrangements for, hardware supplied to customers
or clients of the Company, (iv) customer or contact lists, (v) all
records, files, memoranda, reports, price lists, drawings, plans,
sketches, documents, equipment, and the like, relating to the business
of the Company, or (vi) any other confidential information or trade
secrets respecting the business or affairs of the business of the
Company, or affairs of the Company which the Employee may acquire or
develop in connection with or as a result of the performance of his
services hereunder ("Confidential Information"), excepting only such
information as is already known to the public, and not to release, use
or disclose the same except with the prior written permission of the
Company.
The Employee recognizes that the disclosure or use by himself of
Confidential Information by the Employee may give rise to irreparable
injury to the Company, which may not be adequately compensated by
damages. Accordingly, in the event of a breach or threatened breach by
the Employee of the provision of this paragraph, the Company shall be
entitled to an injunction restraining the Employee from using the
Confidential Information himself, from disclosing, in whole or in
part, the Confidential information, or from rendering any services to
any person, firm, corporation, association or other entity to whom
Confidential Information, in whole or in part, has been disclosed or
is threatened to be disclosed. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to
the Company for such breach or threatened breach, including the
recovery of damages from the Employee. The within undertakings shall
survive the termination or cancellation of this Agreement or of the
Employee's employment.
Non-Competition
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15. During the period during which this Agreement is in force and for a
period of two years from the date of its termination (whether the
Employee resigns or is fired), the Employee will not, engage in the
creation, production, sale or marketing of software or hardware one of
the main functions of which is the integration of telephone (including
Internet telephony) and computer functions or wireless printing - in
any business or for any enterprise, whether as a salaried employee, an
independent contractor, a shareholder, a director, a partner, or in
any other capacity.
Possession
16. The Employee agrees that upon request by the Company, and in any event
upon termination of employment, he shall turn over to the Company all
documents, papers or other material in his possession or under his
control which may contain or be derived from Confidential Information,
together with all documents, notes or other work product which is
connected with or derived from Employee's services to the Company
whether or not such material is at the date hereof in Employee's
possession.
Disclosure and Assignment of Inventions.
17. During the term of his employment with the Company and for a period of
six (6) months thereafter, the Employee shall promptly and fully
disclose to the Company (and to any persons designated by it) all
discoveries, developments, designs, improvements, inventions,
formulae, processes, techniques, computer programs, strategies,
specific computer-related know-how and data, computer hardware,
software and firmware techniques, ,and document coding techniques,
whether or not patentable or registrable under patent, copyright or
similar statues, generated or conceived or reduced to practice or
learned by the Employee, either alone or jointly with others, that in
any way relate to the business of the Company, or result from tasks
assigned to the Employee by the Company, or result from the use of
premises or property (including equipment, hardware, software,
firmware, supplies, facilities or the Company's Confidential
Information) owned, leased, licensed or contracted for or by the
Company (collectively "Inventions").
The Employee agrees that his services on behalf of the Company are
works made for hire and all Inventions shall be the sole property of
the Company, and the Company shall be the sole owner of all patents,
copyrights, trademarks, trade secrets, and other rights and protection
in connection therewith. The Employee hereby assigns to the Company
any and all rights he may now have or may hereafter acquire in such
Inventions.
The Employee further agrees as to all such Inventions to assist the
Company in every proper way (but at the Company's expense) to obtain
and from time to time enforce patents, copyrights, trademarks, trade
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secrets, and other rights and protection relating to said Inventions
in and all countries, and applying for and obtaining such patents,
copyrights, trademarks, trade secrets and other rights and protection
on and enforcing such Inventions, as the Company may desire, together
with any assignments thereof to the Company or persons designated by
it. Such obligation to assist the Company shall continue beyond the
termination of the Employee's employment by the Company, but the
Company shall compensate the Employee at a reasonable rate after
termination of employment for time actually spent by the Employee at
the Company's request on such assistance. In the event the Company is
unable, after reasonable effort, to secure the Employee's signature on
any document or documents needed to apply for or prosecute any patent,
copyright, trademark, trade secret, or other right or protection
relating to an Invention, whether because of the Employee' physical or
mental incapacity or for any other reason whatsoever, the Employee
hereby irrevocable designates and appoints the Company and its duly
authorized officers and agents as his agent coupled with an interest
and attorney-in-fact, to act for and in his behalf and stead to
execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance
of patents, copyrights, trademarks, trade secrets, or similar rights
or protection thereon with the same legal force and effect as if
executed by the Employee.
General Provisions
18. The Employee agrees that the Company shall be entitled to set off from
any sum including but not limited to salary, severance pay, advance
notice and vacation redemption - which it owes the employee, any sums
which the employee may from time to time owe the Company, including
but not limited to damages for violation of this Agreement and for
violation of the Employee's other obligations under other agreements
or under the law.
19. The failure of the Company to terminate this Agreement for the breach
of any condition or covenant herein by the Employee shall not affect
the Company's right to terminate for subsequent breaches of the same
or other conditions or covenants. The failure of either party to
enforce at any time or for any period of time any of the provisions of
this Agreement shall not be construed as a waiver of such provisions
or of the right of the party thereafter to enforce each and every such
provision.
20. Any notice hereby required or permitted to be given shall be
sufficiently given if in writing and mailed by registered mail,
postage prepaid, to either party at the address of such party set
forth above or at such other address as shall have been designated by
written notice by such party to the other party.
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21. This Agreement shall constitute the entire contract between the
parties and supersedes all existing agreements between them,
whether oral or written, with respect to the subject matter
hereof except for the agreement of 24th June 1996 according to
which the Employee received options to purchase the shares of
the Company's parent company, which shall remain in effect.. No
change, modification or amendment of this Agreement shall be of
any effect unless in writing signed by the Employee and by the
President or any Vice President of the Company.
22. This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State
of Israel.
23. Should any provision of this Agreement not be enforceable in any
jurisdiction, the remainder of the Agreement shall not be affected
thereby.
IN WITNESS WHEREOF THE PARTIES HEREUNTO PLACE THEIR HANDS
-------------------------- ---------------------------
The Company The Employee
By:
----------------------
Name:
Title:
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