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EXHIBIT 24
RESTATED AND AMENDED EMPLOYMENT AGREEMENT
OF XXXXXXX X. XXXXXXX
WITH
DSP COMMUNICATIONS, INC. AND DSP TELECOM, INC.
THIS RESTATED AND AMENDED EMPLOYMENT AGREEMENT (this "Agreement"), made
and entered into effective as of the 12th day of August, 1999, by and between
DSP Communications, Inc., a Delaware corporation (hereinafter "DSPC"), DSP
TELECOM, INC., a California corporation (hereinafter the "Corporation"), and
XXXXXXX X. XXXXXXX (hereinafter "Pezzola").
RECITALS
A. DSPC is the parent corporation of the Corporation.
B. Effective September 16, 1996, Pezzola entered into an employment
agreement with the Corporation and DSPC to serve as DSPC's General Counsel and
to serve as an employee of the Corporation, and such agreement was amended and
restated on January 1, 1998, and again on January 16, 1999 (as so amended and
restated, the "Employment Agreement").
C. The terms of the Employment Agreement are hereby amended and
restated in full as of August 12, 1999.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT DUTIES.
a. GENERAL. The Corporation hereby agrees to employ Pezzola,
and Pezzola hereby agrees to accept employment with the Corporation, on the
terms and conditions hereinafter set forth.
b. CORPORATION'S DUTIES. The Corporation shall allow Pezzola
to, and Pezzola shall, perform responsibilities normally incident to his
position as General Counsel of DSPC, commensurate with his background,
education, experience and professional standing. The Corporation shall provide
Pezzola with a private office, stenographic help, office equipment, supplies,
assistant or secretary, customary services and cooperation suitable for the
performance of his duties.
x. XXXXXXX'X DUTIES. Unless otherwise agreed to by the
parties, Pezzola shall serve as General Counsel and Secretary of DSPC. Pezzola
shall devote such time in executing his duties as General Counsel as is deemed
needed
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by DSPC's Chairman of the Board of Directors. Pezzola shall not be required to
devote his full time efforts to the Corporation or DSPC. It is intended that
Pezzola will work the majority of his time, approximately thirty (30) hours per
week, and that he will serve as General Counsel of entities other than DSPC, the
Corporation, or their affiliates, and as an owner in an investment entity.
Pezzola shall report directly to the Chairman of the Board of Directors of DSPC.
Xx. Xxxxxxx shall also inform the Chairman of the DSPC Compensation Committee of
any other positions that he takes with any other entity, beyond the positions
that he currently holds. Pezzola's duties shall be performed primarily in the
San Francisco Bay Area, and more particularly, in either Cupertino or Oakland,
California, at the option of Pezzola.
2. EMPLOYMENT TERM. This Agreement shall terminate August 12, 2001
("Employment Term"), unless (a) extended as set forth herein, or (b) terminated
sooner under the terms of this Agreement. Thereafter, this Agreement may be
renewed by Pezzola and the DSPC Board of Directors of DSPC on such terms as the
parties may agree to in writing. Absent written notice to the contrary, thirty
(30) days prior to the end of the Employment Term, this Agreement will be
renewed for consecutive one (1) year extensions. As used herein, the term
"Employment Term" refers to the entire period of employment of Pezzola
hereunder, including any extensions.
3. COMPENSATION. Pezzola shall be compensated as follows:
a. FIXED SALARY. Effective January 16, 1999, Pezzola shall
receive a fixed annual salary of Two Hundred Thousand Dollars ($200,000). The
Corporation agrees to review the fixed salary following the end of each calendar
year during the Employment Term based upon Pezzola's services and the financial
results of DSPC during the calendar year, and to make such increases as may be
determined appropriate in the discretion of DSPC's Compensation Committee of the
Board of Directors ("Compensation Committee").
b. PAYMENT. Pezzola's fixed salary shall be payable on a
semi-monthly basis.
c. BONUS COMPENSATION. During the Employment Term, Pezzola
shall participate in each bonus plan adopted by the Corporation's Board of
Directors. Commencing in 1999, Pezzola shall be entitled to receive an annual
bonus equal to (i) twenty-five percent (25%) of his annual base salary should
the Corporation meet eighty percent (80%) of its plan as presented to the Board
in January of each year
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during the term of Pezzola's employment ("Yearly Plan"); (ii) fifty percent
(50%) of his annual base salary should the Corporation meet its Yearly Plan; and
(iii) one hundred percent (100%) of his annual base salary should the
Corporation meet one hundred twenty percent (120%) of its Yearly Plan, with the
bonus prorated if the Yearly Plan is met between eighty percent (80%) and one
hundred percent (100%); or between one hundred percent (100%) and one hundred
twenty percent (120%). For purposes of this Section, the meeting of the Yearly
Plan shall be based upon the actual revenues and earnings per share for each
applicable year (each weighted fifty percent (50%)) compared to the revenues and
earnings per share projected in the Yearly Plan (with each item weighted fifty
percent (50%)), and no item shall be counted if it is not at least eighty
percent (80%) met.
d. VACATION. Pezzola shall accrue paid vacation at the rate of
twenty-five (25) days for each twelve (12) months of employment. Pezzola shall
be compensated at his usual rate of compensation during any such vacation.
Pezzola shall be entitled to ten (10) paid holidays during each twelve (12)
months of employment. Pezzola shall receive sick leave or disability leave in
accordance with the terms of the Corporation's standard sick leave or disability
leave policy.
e. BENEFITS. During the employment term, Pezzola and his
dependents shall be entitled to participate in any group plans or programs
maintained by the Corporation for any employees relating to group health,
disability, life insurance and other related benefits as in effect from time to
time. The level of benefits shall be based on the salary payable to Pezzola. The
Corporation and DSPC shall provide Pezzola with Director and Officer Insurance,
if reasonably available to the Corporation and DSPC, and all of its officers and
directors. Pezzola shall in no event receive less insurance coverage than that
available to any other employee.
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4. EXPENSES. The Corporation shall reimburse Pezzola for his normal and
reasonable expenses incurred for travel, entertainment and similar items in
promoting and carrying out the business of the Corporation in accordance with
the Corporation's general policy as adopted by the Corporation's management from
time to time. The Corporation shall pay Pezzola's cellular telephone expenses to
the extent incurred in carrying out the business of the Corporation. The
Corporation shall also reimburse Pezzola for the portion of his professional
membership dues incurred, if any; legal education and seminar expenses; and
California Bar Association dues or fees necessary to maintain his certification
as an attorney in California, as are allocable to the Corporation from time to
time, based on the percentage of Pezzola's time each year that is spent on
Corporation matters. The Corporation shall also reimburse Pezzola for
legal/technical books purchased by Pezzola that are used in carrying out
Pezzola's duties to the Corporation. As a condition of payment or reimbursement,
Pezzola agrees to provide the Corporation with copies of all available invoices
and receipts, and otherwise account to the Corporation in sufficient detail to
allow the Corporation to claim an income tax deduction for such paid item, if
such item is deductible. Reimbursements shall be made on a monthly, or more
frequent, basis.
5. INDEMNIFICATION. The parties entered into an Indemnification
Agreement, effective September 16, 1996, under which DSPC indemnifies Pezzola
for actions he may take on behalf of the Corporation or DSPC.
6. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES. Pezzola agrees that
during the Employment Term he is in a position of special trust and confidence
and has access to confidential and proprietary information about the
Corporation's business and plans. Pezzola agrees that he will not directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director, or in any similar individual
or representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the Corporation. Notwithstanding
anything in the foregoing to the contrary, Pezzola shall be allowed to invest as
a
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shareholder in publicly-traded companies, or through a venture capital firm or
an investment pool.
7. TRADE SECRETS.
a. SPECIAL TECHNIQUES. It is hereby agreed that the
Corporation has developed or acquired certain products, technology, unique or
special methods, manufacturing and assembly processes and techniques, trade
secrets, special written marketing plans and special customer arrangements, and
other proprietary rights and confidential information and shall during the
employment term continue to develop, compile and acquire said items (all
hereinafter collectively referred to as the "Corporation's Property"). It is
expected that Pezzola will gain knowledge of and utilize the Corporation's
Property during the course and scope of his employment with the Corporation, and
will be in a position of trust with respect to the Corporation's Property.
b. CORPORATION'S PROPERTY. It is hereby stipulated and agreed
that the Corporation's Property shall remain the Corporation's sole property. In
the event that Pezzola's employment is terminated, for whatever reason, Pezzola
agrees not to copy, make known, disclose or use, any of the Corporation's
Property without the Corporation's prior written consent. In such event, Pezzola
further agrees not to endeavor or attempt in any way to interfere with or induce
a breach of any prior proprietary contractual relationship that the Corporation
may have with any employee, customer, contractor, supplier, representative, or
distributor for nine (9) months after any termination of this Agreement. Pezzola
agrees upon termination of employment to deliver to the Corporation all
confidential papers, documents, records, lists and notes (whether prepared by
Pezzola or others) comprising or containing the Corporation's Property. Pezzola
recognizes that violation of covenants and agreements contained in this Section
7 may result in irreparable injury to the Corporation which would not be fully
compensable by way of money damages.
8. TERMINATION.
a. GENERAL. The Corporation may terminate this Agreement
without cause, by written notice. Pezzola may voluntarily terminate his
employment hereunder upon sixty (60) days' advance written notice to the
Corporation.
b. TERMINATION FOR CAUSE. The Corporation may immediately
terminate Pezzola's employment at any time for cause. Termination for cause
shall be effective from the receipt of written notice thereof to Pezzola
specifying the grounds for termination and all relevant facts. Cause shall be
deemed to include:
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(i) material neglect of his duties or a significant violation of any of the
provisions of this Agreement, which continues after written notice and a
reasonable opportunity (not to exceed thirty (30) days) in which to cure; (ii)
fraud, embezzlement, defalcation or conviction of any felonious offense; or
(iii) intentionally imparting confidential information relating to the
Corporation or DSPC or their business to competitors or to other third parties
other than in the course of carrying out his duties hereunder. The Corporation's
exercise of its rights to terminate with cause shall be without prejudice to any
other remedy it may be entitled at law, in equity, or under this Agreement.
c. TERMINATION UPON DEATH OR DISABILITY. This Agreement shall
automatically terminate upon Pezzola's death. In addition, if any disability or
incapacity of Pezzola to perform his duties as the result of any injury,
sickness, or physical, mental or emotional condition continues for a period of
thirty (30) business days (excluding any accrued vacation) out of any one
hundred twenty (120) calendar day period, the Corporation may terminate
Pezzola's employment upon written notice. Payment of salary to Pezzola during
any sick leave shall only be to the extent that Pezzola has accrued sick leave
or vacation days. Pezzola shall accrue sick leave at the same rate generally
available to the Corporation's employees.
x. XXXXXXXXX PAY. If this Agreement is terminated by the
Corporation without cause pursuant to Section 8.a. (above), the Corporation
shall pay Pezzola a severance/consulting fee equal to his monthly salary at his
then-current rate of fixed salary compensation, multiplied by the greater of (i)
the number of full months left until the end of the then-current employment
term, or (ii) six (6), during which time Pezzola may elect to remain as an
employee of the Corporation in a non-policy-making role, devoting substantive
productive time, and his options in DSPC shall continue to vest for the period
of continuous employment, or shall be entitled to the severance without
remaining as an employee. The above severance fee shall be payable in accordance
with the Corporation's normal payroll practices. The Corporation shall pay
Pezzola a severance fee equal to his monthly salary at his then-current rate of
fixed salary compensation, multiplied by the number six (6) if this Agreement is
terminated pursuant to Section 8.b (i) (above) or if Pezzola or the Corporation
elects not to renew this Agreement. The Corporation shall pay Pezzola a
severance fee equal to his monthly salary at his then-current rate of fixed
salary compensation, multiplied by the number three (3), if Pezzola voluntarily
elects to terminate his employment, unless the Corporation successfully claims
that a
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termination in accordance with Sections 8.b (ii) or (iii) is in order. There
shall be no severance in the event that this Agreement is terminated in
accordance with Section 8.b (ii) or (iii).
9. CORPORATE OPPORTUNITIES.
a. DUTY TO NOTIFY. In the event that Pezzola, during the
Employment Term, shall become aware of any material and significant business
opportunity directly related to any of the Corporation's significant businesses,
Pezzola shall promptly notify the Corporation's Directors of such opportunity.
Pezzola shall not appropriate for himself or for any other person other than the
Corporation, or any affiliate of the Corporation, any such opportunity unless,
as to any particular opportunity, the Board of Directors of the Corporation
fails to take appropriate action within thirty (30) days. Pezzola's duty to
notify the Corporation and to refrain from appropriating all such opportunities
for thirty (30) days shall neither be limited by, nor shall such duty limit, the
application of the general law of California relating to the fiduciary duties of
an agent or employee.
b. FAILURE TO NOTIFY. In the event that Pezzola fails to
notify the Corporation of, or so appropriates, any such opportunity without the
express written consent of the Board of Directors, Pezzola shall be deemed to
have violated the provisions of this Section notwithstanding the following:
i. The capacity in which Pezzola shall have acquired
such opportunity; or
ii. The probable success in the Corporation's hands
of such opportunity.
c. CORPORATION DEFINED. For purposes of Sections 6, 7, 8 and
9, the term "Corporation" shall also include DSPC and all of DSPC's
subsidiaries.
10. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matters herein, and supersedes and replaces any prior agreements and
understandings, whether oral or written between them with respect to such
matters. The provisions of this Agreement may be waived, altered, amended or
repealed in whole or in part only upon the written consent of both parties to
this Agreement.
b. NO IMPLIED WAIVERS. The failure of either party at any time
to require performance by the other party of any provision hereof shall not
affect in any way the right to require such performance at any time thereafter,
nor shall the waiver
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by either party of a breach of any provision hereof be taken or held to be a
waiver of any subsequent breach of the same provision or any other provision.
c. PERSONAL SERVICES. It is understood that the services to be
performed by Pezzola hereunder are personal in nature and the obligations to
perform such services and the conditions and covenants of this Agreement cannot
be assigned by Pezzola. Subject to the foregoing, and except as otherwise
provided herein, this Agreement shall inure to the benefit of and bind the
successors and assigns of the Corporation.
d. SEVERABILITY. If for any reason any provision of this
Agreement shall be determined to be invalid or inoperative, the validity and
effect of the other provisions hereof shall not be affected thereby, provided
that no such severability shall be effective if it causes a material detriment
to any party.
e. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, applicable to
contracts between California residents entered into and to be performed entirely
within the State of California.
f. NOTICES. All notices, requests, demands, instructions or
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally, or if given by prepaid telegram, or mailed first-class,
postage prepaid, registered or certified mail, return receipt requested, shall
be deemed to have been given seventy-two (72) hours after such delivery, if
addressed to the other party at the addresses as set forth on the signature page
below. Either party hereto may change the address to which such communications
are to be directed by giving written notice to the other party hereto of such
change in the manner above provided.
g. MERGER, TRANSFER OF ASSETS, OR DISSOLUTION OF THE
CORPORATION. This Agreement shall not be terminated by any dissolution of the
Corporation resulting from either merger or consolidation in which the
Corporation is not the consolidated or surviving corporation or a transfer of
all or substantially all of the assets of the Corporation. In such event, the
rights, benefits and obligations herein shall automatically be assigned to the
surviving or resulting corporation or to the transferee of the assets.
h. CONFLICT POTENTIAL AND DUTY TO NOTIFY. Pezzola agrees to
notify the
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Chairman of the Compensation Committee of: (1) any investments into any company
or other entity of his own personal funds which is in excess of Two Hundred
Thousand Dollars ($200,000); (2) any investment which results in Pezzola owing
over five percent (5%) of an entity; or (3) any other employment or consulting
arrangement that Pezzola
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is a party to. If the Chairman of the Compensation Committee deems such
investment or arrangement to be a conflict, he and Pezzola shall attempt to
resolve the conflict. If such conflict cannot be so resolved, then the Chairman
of the Compensation Committee shall discuss the matter with the entire board.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DSP TELECOM, INC. DSP COMMUNICATIONS, INC.
a California corporation a California corporation
20300 Stevens Creek Blvd., 00000 Xxxxxxx Xxxxx Xxxx.,
Xxxxx 000 Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
By:/s/ Xxxxxx Xxxx By:/s/ Xxxxx Broad
-------------------------------- --------------------------------------
Xxxxxx Xxxx, Chairman Xxxxx Broad, Chairman
of the Board of Directors of the Compensation Committee
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
XXXXXXX X. XXXXXXX
00 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
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