Exhibit 10.22
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT dated as of January 1, 1999 between DATA
SYSTEMS & SOFTWARE INC., a Delaware corporation (the "Company"), and XXXXX
XXXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has been the Vice President and Chief
Financial Officer of the Company since 1996, Vice President of its
subsidiary Decision Systems Israel Ltd. ("DSI") since 1990 and under its
employ since May 1986, and has successfully fulfilled the responsibilities
of his positions in the Company and its subsidiaries; and
WHEREAS, the Company desires to assure itself of the Executive's
continued services, and the Executive is willing to continue to provide
such services to the Company, all upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises hereinafter set
forth, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. EMPLOYMENT.
The Company shall employ the Executive, and the Executive shall serve, as
Vice President and Chief Financial Officer of the Company and DSI during
the period commencing January 1, 1999 through December 31, 2000 (the
"Employment Period"). During the Employment Period the Executive shall
devote his best efforts and services to his employment on a substantially
full-time basis. The place of employment shall be the headquarters of DSI,
which shall at all times be in the Central Area of Israel. The Employment
Period may be extended by agreement of the parties.
2. COMPENSATION.
(a) During the Employment Period the Company shall pay the Executive a
salary at the rate of $10,679 per month commencing on January 1,
1999. This rate shall be adjusted annually, effective as of January
1 of each year, to reflect the increase in the Cost of Living Index
in the US. In addition to this adjustment, during the Employment
Period, the Executive's salary rate shall be reviewed annually by
the Company's Board of Directors (the "BoD"), which may increase the
Executive's salary, as it deems appropriate. The salary shall be
paid in arrears no later than the second day of the month following
the month in which it was earned.
(b) As an inducement to his entering into this Agreement, the Company
agrees to recommend to the Compensation and Stock Option Committee
of the BoD (the "Committee") that the Company grant the Executive
options to purchase 25,000 shares of Common Stock exercisable at
fair market value on the date of the grant. The Executive will be
eligible for future grants of stock options if and as recommended by
management of the Company and the Committee..
(c) During the Employment Period the Executive shall be reimbursed by
the Company for reasonable business expenses actually incurred or
paid by him in connection with the
-1-
performance of his duties hereunder in accordance with the policies
of the Company. All air travel shall be business class.
(d) During the Employment Period the Company shall contribute and the
Executive shall participate in all of the employee benefit plans
provided to the Company's management employees in Israel, including
without limitation, monthly contribution of (i) 15.83% of the
Executive's salary to the Executive's Management Insurance policy,
(5% pension, 8.33% severance and 2.5% disability insurance), and
(ii) an additional 7.5% of the Executive's salary to the Executive's
Continued Education Fund ("Keren Hishtalmut" in Israel). These funds
and policies will be owned and controlled entirely and solely by the
Executive.
(e) At all times during the Employment Period the Company shall maintain
in the severance portion of the Executive's Manager's Insurance Fund
an amount equal to his monthly salary multiplied by the number of
years (and fractions thereof) that the Executive has been employed
by the Company or any of its subsidiaries. This balance is to be
deducted from any sums owing to the Executive as severance pay
pursuant to Paragraph 4(b) hereof.
(f) The Executive shall be entitled to 22 workdays vacation which shall
be accrued from year to year and redeemable for a cash payment at
the option of the Executive. All accrued vacation exceeding 44 days
shall be automatically redeemed and paid to the Executive.
(g) The Company shall make available to the Executive during the
Employment Period an automobile for the Executive's exclusive use at
the Company's expense. The Company shall also at its own expense pay
for all operating costs, repairs, insurance, parking and all
withholding taxes for such automobile.
3. OTHER ACTIVITIES.
The Executive expressly agrees, as a condition to the performance by the
Company of its obligations hereunder, that at all times during the
Employment Period, the Executive shall not directly or indirectly engage
in, as a director, officer, employee, partner or stockholder in any
business, association, firm or corporation (other than the Company or
any parent, subsidiary or successor of it) that is engaged in whole or
in part in a business that is in substantial and direct competition with
the business of the Company or any of its subsidiaries, except that the
Executive may own not in excess of 10% (or such greater percentage as to
which the Board of Directors of the Company shall consent) of any class
of securities of any such competitive entity that is registered under
Section 12 of Exchange Act or otherwise publicly traded.
4. TERMINATION.
(a) Each of the Company and the Executive shall have the right to
terminate the Executive's employment with the Company and its
subsidiaries upon written notice to the other party. Such notice
shall specify the date (the "Termination Date") upon which the
Executive's services to the Company shall terminate (which date
shall be the last day of a calendar month not less than 30 days
after the date such notice is given, unless such termination is for
Cause as defined in Paragraph 4(g)).
(b) Upon the Termination Date or upon expiration of the Employment
Period, the Company shall pay the Executive severance pay equal to
150% his last months salary multiplied by the number of years (and
any fraction of any year) that the Executive has been employed
-2-
by the Company or any of its subsidiaries. Such payment shall be
reduced by the balance in the Executive's severance fund pursuant to
Paragraph 2(d) above.
(c) In addition to the severance payment pursuant to Paragraph 4(b),
i. upon expiration of the Employment Period or upon the Termination
Date, if the Company initiates the termination pursuant to Paragraph
4(a) hereof or the Executive exercises his right under Paragraph
4(c) hereof, the Company shall pay the Executive a termination
payment equal to five times his last month's salary; or
ii. in the event that the Executive terminates his employment pursuant
to Paragraph 4(a) hereof, upon the Termination Date the Company
shall pay the Executive a termination payment equal to two times his
last month's salary.
These payments are in addition to any other rights and payments
owing to the Executive under this Agreement. Notwithstanding any of
the foregoing provisions to the contrary of this Paragraph 4(c), the
Executive shall not be entitled to a termination payment hereunder
in the event of the termination of his employment for Cause as
defined in Paragraph 4(g).
(d) Notwithstanding anything to the contrary herein, if at any time
during the Employment Period, the Company breaches any of its
obligations hereunder or there shall occur a "Change in Control of
the Company" (as hereinafter defined), the Executive shall have the
option, upon written notice to the Company that such breach or a
Change in Control of the Company has occurred and that the Executive
intends to exercise such option, to terminate his employment with
the Company. For purposes of this Agreement, a "Change in Control of
the Company" shall be deemed to have occurred if (i) there shall be
consummated (A) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be
converted in whole or in part into cash, securities or other
property, other than a merger of the Company in which the holders of
the Company's Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (B) any
sale, lease, exchange or transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the
Company, or (ii) the stockholders of the company shall approve any
plan or proposal for the liquidation or dissolution of the Company,
or (iii) any "person" (as such term is used in Sections 13 (d) and
14 (d) (2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than the Company or a subsidiary thereof or
any employee benefit plan sponsored by the Company or a subsidiary
thereof, shall become the beneficial owner (within the .meaning of
Rule 13d-3 under the Exchange Act) of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities ordinarily (and apart from
rights accruing in special circumstances) having the right to vote
in the election of directors, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases or
otherwise, or (iv) at any time during a period of two consecutive
years, individuals who at the beginning of such period constituted
the Board of Directors of the Company shall cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for election by the Company's stockholders of each new
director during such two-year period was approved by a vote of at
least two-thirds of the
-3-
directors then still in office who were directors at the beginning
of such two-year period or (v) any other event shall occur that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act.
(e) The Executive shall not be required to seek other employment in
order to mitigate his damages hereunder, and no amounts received
from any such employment shall reduce any amount that the Company
would otherwise be required to pay to under this Agreement or
applicable law.
(f) In the event that the Executive institutes any legal action to
enforce his rights under, or to recover damages for breach of this
Agreement, the Executive, if he is the prevailing party, shall be
entitled to recover from the Company any actual expenses of such
action, including attorneys' fees, disbursements and travel
expenses, incurred by him.
(g) The Company may at any time terminate Executive's employment
hereunder for Cause by delivering notice of termination to Executive
(such termination to be effective upon delivery of such notice). For
purposes of this Agreement, "Cause" means the occurrence in fact of
any of the following:
i. Executive is convicted of a felony or other crime involving moral
turpitude;
ii. Executive performs his duties hereunder with gross negligence;
iii. Executive engages in gross misconduct that materially injures the
Company;
iv. Executive materially breaches his fiduciary duties as an employee of
the Company and fails to cure such breach promptly upon written
notice thereof; or
v. Executive materially breaches any of his other obligations under
this Agreement.
5. CONFIDENTIALITY.
The Executive shall not during the term of this Agreement or thereafter
disclose to any person, firm or corporation, except as otherwise required
by law, any information concerning the business, clients or affairs of the
Company that he may have acquired in the course of, or as an incident to,
his employment by the Company, for his own benefit or that of any such
person, firm or corporation, or to the detriment or intended or probable
detriment of the Company.
6. INDEMNIFICATION.
The Executive shall be entitled throughout the term of this Agreement and
thereafter to indemnification in respect of any claim, suit, action, loss
or damages arising out of or relating to his acts or omissions as an
employee, officer or director of the Company, and\or any of its
subsidiaries, (or any successor pursuant to Paragraph 12 hereof) to the
fullest extent permitted by the Delaware General Corporation Law or other
applicable law, provided, however, that in the event of a suit by the
Company against the Executive, the Company shall have no obligation to
advance any costs of counsel.
7. REMEDIES.
The Company hereby waives, and will not assert, any right to set off the
amount of any claims, liabilities, damages or losses the Company may have
against any amounts payable by the Company to the Executive hereunder, and
any amounts payable to or otherwise accrued for the account of the
Executive in respect of any period prior to the effective termination of
this Agreement shall be paid as provided in this Agreement without any
such set-off.
-4-
8. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, or
any breach thereof, shall be settled by arbitration in accordance with the
rules of the American Arbitration Association, and judgement upon such
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitration shall be held in New York, New York,
or such other place as may be agreed upon at the time by the parties to
the arbitration. The Company will pay for all travel and related expenses
as may be reasonably required by the Executive so as to afford his
presence at all such proceedings.
9. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect
to the conflicts of law principles thereof.
10. EMPLOYMENT AGREEMENT WITH SUBSIDIARY.
The Executive may have an employment agreement with a subsidiary or
subsidiaries of the Company. Any payments made in accordance with such
agreements are to be deducted from the Company's similar obligations in
this agreement.
11. ENTIRE AGREEMENT.
This Agreement constitutes the whole agreement of the parties hereto in
reference to any employment of the executive by the Company and in
reference to any of the matters or things herein provided for or discussed
or mentioned in reference to such employment, all prior agreements,
promises, representations and understandings relative thereto being herein
merged.
12. ASSIGNABILITY.
(a) In the event that the Company shall merge or consolidate with any
other corporation or all or substantially all the Company's business
or assets shall be transferred in any manner to any other person,
such successor shall thereupon succeed to, and be subject to, all
rights, interests, duties and obligations of, and, subject to the
provisions of Paragraph 4(d) relating to Change in Control, shall
thereafter be deemed for all purposes hereto to be the Company
hereunder. This Agreement shall be binding upon and inure to the
benefit of any such successor and the legal representatives of the
Executive.
(b) This Agreement is personal in nature and neither of the parties
hereto shall assign or transfer this Agreement or any rights or
obligations hereunder, except by operation of law or pursuant to the
terms of this Paragraph 12.
(c) Except as otherwise provided in this Paragraph 12, nothing expressed
or implied herein is intended or shall be construed to confer upon
or give to any person, other than the parties hereto any right,
remedy or claim under or by reason of this Agreement or of any term,
covenant or condition hereof.
13. AMENDMENTS; WAIVERS.
This Agreement may be amended, modified, superseded or cancelled and the
terms or covenants hereof may be waived only by a written instrument
executed by both of the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of either party at any time or times
to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such breach, or
a waiver of the breach of any other term or covenant contained in this
Agreement.
-5-
14. NOTICES.
All notices and other communications given pursuant to this Agreement
shall be in writing and shall be deemed given if (i) delivered by hand,
(ii) mailed by registered or certified mail (return receipt requested),
postage prepaid, or (iii) deposited with Federal Express or other
recognized over-night courier service, to any party addressed as follows
(or to such other address as shall be specified by a party by like
notice).
If to the Company: If to the Executive:
Data Systems & Software Inc. Xxxxx Xxxxxxx
000 Xxxxx 00 00 Xxxxx Xx.
Xxxxxx, Xxx Xxxxxx 00000 Xxxxxxxxx, 00000
XXX ISRAEL
15. SEVERABILITY.
If for any reason any provision of this Agreement shall be determined to
be illegal and unenforceable by any court of law, the validity and effect
of all other provisions hereof shall not be affected thereby.
16. HEADINGS.
Section headings are for convenience only and shall not be considered a
part of the terms and provisions of this Agreement.
17. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall
constitute an original and which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement, as of the day and year first above written.
DATA SYSTEMS & SOFTWARE INC.
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------- ----------------------
Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxxxx
CEO and President
By: /s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx
Secretary
-6-
