EMPLOYMENT AGREEMENT
with
XXXXXX XXXXXXX
AGREEMENT entered into as of December 1, 1994 between XXXXXX XXXXXXX
residing at Bet Xxxxxxx 00, Xxxxxxx, Xxxxxx ("Employee") and T.T.R. TECHNOLOGIES
LTD., an Israeli company-in-formation with temporary offices at 00/0 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxx (the "Company").
W I T N E S S E T H
WHEREAS, the Company is in the business of developing and marketing
computer software products; and
WHEREAS, the Company desires to employ Employee initially as Director of
Product Research & Development at the Company.
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment
With effect from the effective date (as defined in section 3), the
Company employs Employee and Employee accepts employment with the Company upon
the terms and conditions set forth herein.
2. Duties
2.1 The Company hereby engages Employee to serve as its Director of
Product Research & Development. In such capacity, the Employee shall be
responsible for all product research & development activities of the Company,
and shall see that all orders of the President and resolutions of the Board of
Directors in this respect are carried into effect.
2.2 Employee shall devote his full business time and attention to the
Business of the Company and shall perform his duties diligently and promptly for
the benefit of the Company during usual business hours on five business days per
week (and outside those hours when reasonably necessary) and faithfully and
diligently perform such duties as may be assigned to or vested in him by the
president or the
Board of Directors. Employee shall pre-clear with the President of the Company
all product research & development plans and activities. The Employee shall not,
without the prior written consent of the Board of Directors, undertake or accept
any other paid or unpaid employment or occupation or engage in or be associated
with any other commercial or business duties or pursuits, except as otherwise
permitted hereunder.
2.3 Employee shall report regularly and as requested to the President of
the Company or as otherwise requested by the Board of Directors.
3. Term
3.1 Employee's employment under this Agreement shall commence on January
1, 1995 (the "Effective Date") and shall end on the earlier of : (i) the death
or disability (as defined herein ) of the Employee or termination of Employee's
employment with cause (as defined herein); (ii) termination by either party
without cause upon sixty (60) days advance written notice or (iii) one (1) year
from the date of this Agreement. After the expiration of such initial term
(other than for reasons set forth in clauses (i) and (ii), this Agreement shall
automatically be renewed for additional one (1) year periods on the same terms
and conditions set forth herein (unless mutually agreed otherwise), unless
either party elects not to renew the term of this Agreement by giving written
notice to the other at least sixty (60) days before the expiration date.
3.2 For the purpose of this paragraph 3, "disability" shall mean any
physical or mental illness or injury as a result of which Employee remains
absent from work for a period of two (2) successive months, or an aggregate of
two (2) months in any twelve (12) month period. Disability shall occur at the
end of any such period.
3.3 For the purpose of this paragraph 3, "cause" shall exist if Employee
(i) breaches any of the material terms or conditions of this Agreement; (ii)
substantially fails to perform the Employee's areas of responsibility set forth
herein, (iii) engages in willful misconduct or acts in bad faith with respect to
the Company, in connection with and related to the employment hereunder, (iv) is
convicted of a felony, (v) fails to comply with the instructions of the
Company's Board of Directors in a manner materially detrimental to the Company,
provided, that with respect to clauses (i), (ii) and (v), if Employee has cured
any such condition (that is reasonably susceptible to cure) within 30 days of
the advance notice (as defined herein) then "cause" shall be deemed to not
exist. For purposes of this Paragraph 3, "advance notice" shall constitute a
written notice delivered to Employee that sets forth with particularity the
facts and circumstances relied upon by the Company as the basis for cause.
3.4 Either the Company or Employee may terminate this Agreement without
cause upon not less than sixty (60) days prior written notice to the other.
3.5 During the period following notice of termination by either party
for whatever reason, the Employee shall cooperate with the Company and use his
best efforts to assist the integration into the Company the person or persons
who will assume the Employee's responsibilities.
4. Compensation
4.1 During the term hereof, and subject to the performance of the
services required to be performed hereunder by Employee, the Company shall pay
to the Employee for all services rendered hereunder, a gross salary, payable not
less often than once per month and in accordance with the Company's normal and
reasonable payroll practices, a monthly gross amount of U.S. $5000 (the "Gross
Salary"). Except as otherwise provided herein, the Gross Salary amount payable
hereunder is all inclusive and shall include all benefits and payments which
Employee may otherwise be entitled to, including, without limitation, sickness
benefits, travel expenses, pension payments and payment for additional hours
worked. The Company shall make all national insurance (Bituach Leumi) payments
required under law in respect of Employee's employment hereunder.
4.2 Translations to Israeli currency shall be calculated on the basis of
the representative rate of exchange published by a daily newspaper in Israel on
the date of payment. The linkage of the Employee's compensation to the US dollar
shall be credited toward any Tosefet Yoker and all other similar wage increases
required to be paid under Israeli Law.
4.3 The Employee shall receive the Gross Salary payable in respect of
periods of the Employee's military reserve duty. The Company shall be entitled
to receive and retain any amounts payable by the National Insurance Institute or
any other agency in respect of such periods.
4.4 The Board shall undertake an evaluation of the Employee's
performance from time to time and may increase the monthly Gross Salary or grant
a performance bonus if it should determine in its absolute discretion that such
increase or bonus is justifiable and appropriate. It is understood and agreed
that Employee's compensation hereunder will not be increased for at least the
first year that this Agreement is in effect.
4.5 The Company and the Employee will obtain and maintain Manager's
Insurance (Bituach Menahalim) for the exclusive benefit of the Employee in the
customary form. Each of the Company and the Employee shall contribute toward the
premiums payable in respect of such insurance those amounts which would be
recognized under applicable law, but in no event shall such contributed amounts
be more than thirteen and one third percent (13 1/3%) of each monthly Gross
Salary payment for the Company and five percent (5%) of such amount for the
Employee. It is hereby agreed that should the Employee be or become entitled to
severance pay under applicable law, his benefits under said insurance shall be
in lieu thereof and in full and final substitution therefor.
4.6 In addition to the Gross Salary, the Company shall pay to Employee
incentive compensation (hereinafter the "Incentive Compensation") for the term
and any renewal period as provided below:
(i) The Incentive Compensation shall be equal to one percent (1%) of the
Gross Receipts from the sale of Covered Products of the Company up to one
million U.S. Dollars ($1,000,000) and two percent (2%) of the Gross Receipts
from the sale of Covered Products in excess of such amount.
(ii) The Incentive Compensation shall be computed on a calendar
quarterly basis for the respective periods ending March 31, June 30, September
30 and December 31 of each year. Within thirty (30) days of the end of each
quarter, the Company shall provide the Employee with a written statement
("Quarterly Gross Receipts Report") setting forth essential information
concerning the sales of Covered Products by the Company.
(iii) Employee shall be entitled to receive the Incentive Compensation
on a quarterly basis. In the event the Employee is terminated without cause
under Section 3.4, he shall be entitled to the Incentive Compensation based on
the actual Gross Receipts from the sale of Covered Products for that quarter
through the date of termination. If the Employee is terminated for cause under
Section 3.1, he shall not be entitled to receive Incentive Compensation under
this Section.
(iv) The Company shall remit payment to the Employee in respect of the
Incentive Compensation earned for the preceding calendar quarter at the same
time as the Quarterly Gross Receipts Report is submitted to the Employee. If no
Incentive Compensation for the Quarter has been earned, or if the Employee shall
be ineligible therefor hereunder, it shall be so reported. The Company shall be
entitled to deduct or withhold from the Incentive Compensation payments all
taxes and charges which the Company may be required to deduct or withhold
therefrom under applicable law.
(v) For purposes of this Agreement, the term "Gross Receipts" shall mean
the gross revenues actually received by the Company or its affiliates from the
sale or distribution of Covered Products anywhere in the world.
(vi) For purposes of this Agreement, the term "Covered Products" shall
mean only those products sold by the Company and its affiliates which were (i)
actually designed or developed and completed by the department or division at
the Company headed by the Employee pursuant to the terms of this Agreement or
(ii) designed and developed by the Employee prior to the effectiveness of this
Agreement and to which the Company shall have acquired full proprietary rights.
4.7 In the event that this Agreement is terminated for whatever reason
or expires, then the Company shall pay to Employee royalties in an amount
corresponding to the Incentive Compensation set forth in Section 4.6(i) above
("Royalties") in respect of the Covered Products, provided, that, (i) a properly
registered patent in respect of such Covered Product is in effect in Israel or
in the United States, and then the Royalty payment shall be made for the
duration of such patent, provided, further, that, if a properly completed and
executed patent application has been filed and is pending with the Israel Patent
Office or the United Patent Office, then the Company shall remit the Royalty
Payments as provided below in escrow for the benefit of the client until such
time, if ever, that such patent is in fact obtained by or on behalf of the
Company or any of its affiliates. Should such patent application be denied, then
all amounts in escrow shall thereupon revert to the Company and the Company is
hereby authorized to then remit to its account the escrowed amounts.
4.7.1. The Royalty shall be computed on a calendar quarterly basis for
the respective periods ending March 31, June 30, September 30 and December 31 of
each year. Within thirty (30) days of the end of each quarter, the Company shall
provide the Employee with a written statement ("Royalty Report") setting forth
essential information concerning the sales of Covered Products by the Company
for purposes of making the Royalty payment. The Company shall remit payment to
the Employee in respect of the Royalty earned for the preceding calendar quarter
at the same time as the Royalty Report is submitted to the Employee. If no
Royalty for the Quarter has been earned, or if the Employee shall be ineligible
therefor hereunder, it shall be so reported. The Company shall be entitled to
deduct or withhold from the Royalty payments all taxes and charges which the
Company may be required to deduct or withhold therefrom under applicable law.
4.8 In the event that within the first year after the Effective Date
either (i) Employee's employment hereunder is terminated by the Company for
cause or (ii) Employee terminates this Agreement under Section 3.4, then, within
ten (10) days of such termination, Employee shall pay to the Company U.S.$5,000
in Israeli
Shekalim at the representative rate of exchange published by an Israeli
newspaper on the date of payment. Payment of this amount by Employee to the
Company shall not affect any right or remedy otherwise available to the Company
under this Agreement or under law.
4.9 Employee is entitled to participate in any form of stock option
benefit plan to be established by the Company's majority shareholder and parent
company, TTR Inc., a Delaware company. In the event that this Agreement is
terminated for whatever reason or expires during the first two (2) years of
Employee's employment hereunder, then all stock options or grants awarded to
Employee which have not vested on the date of termination shall revert to the
Company.
5. Vacation
Employee shall be entitled to 10 working days of paid vacation during
each year that this Agreement is in effect, to be taken at times as agreed upon
by the parties. In addition, Employee shall be entitled to paid vacation for
each of the middle days (Hol Ha'moed) of the Jewish Festivals of Passover
(Pesach) and Succot for the duration of, and during any renewal period, that
this Agreement is in effect.
6. Secrecy and Nondisclosure
Employee shall treat as secret and confidential all of the processes,
methods, formulas, procedures, techniques, software, designs, data, and other
information which are not of public knowledge or record pertaining to the
Company's and any affiliate's business (existing, potential, and future),
including without limitation, all business information relating to customers and
supplies and products of which Employee becomes aware during and as a result of
employment with the Company, and Employee shall not disclose, use, publish, or
in any other manner reveal, directly or indirectly, at any time during and after
the term of this Agreement, any such information detailed herein. The obligation
hereunder shall survive the termination or expiration of this Agreement.
7. Non-Competition
7.1 During the term of this Agreement (and any renewal thereof) and for
a term of one (1) year after Employee ceases to be employed by the Company,
Employee will not, directly or indirectly, for his own account or as an
employee, officer, director, partner, joint venturer, shareholder, investor,
consultant or otherwise (except as an investor in a corporation whose stock is
publicly traded and in which Employee holds less than 5% of the outstanding
shares) interest himself or engage, directly or indirectly, in the design,
development, production, sale or distribution of
any product or component that directly or indirectly competes with a product or
component (i) then being designed, produced, sold or distributed by the Company
or any of its affiliates (ii) or to which the Company or any of its affiliates
shall have proprietary rights. The limitations set forth in the preceding
sentence shall not apply to Employee's servicing of any consulting clients that
are serviced by Employee or Peletronics Ltd. on the date set forth above,
provided, that, all xxxxxxxx and payments that Employee receives on behalf of
services so provided shall be promptly remitted to the Company, and Employee
agrees to take all actions and sign any instrument reasonably requested by the
Company in order to effect the foregoing.
7.2 Employee agrees that during a period of one (1) year from the
termination of this Agreement or any extensions thereof, he shall not directly
or indirectly employ any individual employed by the Company at the time that
Employee's employment with the Company is terminated.
7.3 Employee acknowledges that the restricted period of time and
geographical location specified under this paragraph 7 are reasonable, in view
of the nature of the business in which the Company is engaged and Employee's
knowledge of the Company's business and products. If such period of time or
geographical location should be determined to be unreasonable in any judicial
proceeding, then the period of time and area of restriction shall be reduced so
that this Agreement may be enforced in such area and during such period of time
as shall be determined to be reasonable by such judicial proceeding.
8. Development Rights
The Employee agrees and declares that all proprietary information
including but not limited to trade secrets, know-how, patents and other rights
in connection therewith developed by or with the contribution of Employee's
efforts during his employment with the Company shall be the sole property of the
Company.
9. Employee Representations
The Employee represents and warrants to the Company that the execution
and delivery of this Agreement and the fulfillment of the terms hereof (i) will
not constitute a breach of any agreement or other instrument to which he is
party, (ii) does not require the consent of any person, and (iii) shall not
utilize during the term of his employment any proprietary information of any
third party, including prior employers of the Employee.
10. Cost-Sharing
In the event that legal suit ("Action") is commenced against the Company and
Employee on a cause of action relating to the commencement by Employee of his
employment with the Company under this Agreement, the Company, at it sole cost,
shall assume the legal defense and other associated costs and expenses of such
Action on behalf of itself and Employee, provided, that, the Company shall, in
its sole discretion, be entitled to establish the legal strategy to be adopted
in such Action on behalf of Employee, including, without limitation settling any
and all claims relating to the Action. Employee shall cooperate with the Company
and its legal counsel as requested by the Company and such counsel in defending
against the Action, and Employee hereby authorizes Company to take any
action that the Company shall, in its sole discretion, determine to be
appropriate in respect of the Action, including settling any and all claims
relating to the Action. Non-compliance by Employee with the terms of this
Section 10 shall release the Company from its obligation to defend the Action on
behalf of Employee.
11. Benefit
This Agreement shall inure to the benefit of and be binding upon the
Company, its successors and assigns, including any subsidiary or affiliated
entity.
12. Entire Agreement
This Agreement constitutes the entire understanding and agreement
between the parties, and supersedes any and all prior discussions and agreements
and correspondence, and may not be amended or modified in any respect except by
a subsequent writing executed by both parties.
13. Notices
All notices and other communications to any party shall be given or made
in writing and telecopied, faxed, mailed or delivered by hand at the address set
out in the caption of this Agreement or to such address as either party may
hereafter specify. Such notice or other communication shall be effective, (i) if
given by telecopier or fax, when such copy is transmitted to the number
specified herein and the appropriate answer back is received or (ii) if given by
any other means, when delivered at the address specified herein.
14. Applicable Law
This Agreement, its validity, construction and effect shall be governed
by and construed under the laws of the State of Israel, without giving effect to
principles of conflict of laws thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly signed by
the date stated above.
T.T.R. TECHNOLOGIES LTD.
(a company-in-formation)
By: XXXX X. XXXXXXX
------------------------
Xxxx X. Xxxxxxx, one of the
incorporators of the Company
XXXXXX XXXXXXX
---------------
XXXXXX XXXXXXX
AGREEMENT
AMENDMENT to Employment Agreement dated December 1, 1994 between TTR
Technologies Ltd. and Xxxxxx Xxxxxxx ( the "Agreement") made this ___ day of
December 1996.
Subject to the closing of an IPO of TTR Inc. the Agreement shall be amended as
follows:
1. Section 4.1 of the Agreement is hereby amended so that the Gross Salary shall
be $8,000.00.
2. Section 5 of the Agreement is hereby amended so that the number of paid
vacation days shall be 12 instead of 10.
3. Sections 4.6, 4.7 and 4.7.1 are hereby deleted.
4. The following provisions are hereby added to the Agreement:
"4.6 The Company shall pay the Employee a one time bonus of $50,000.
4.10 The Company shall provide Employee with use of an automobile and Company
shall pay for registration, gas, maintenance and insurance.
4.11 The Company and the Employee shall maintain an advancement fund (keren
Heshtamlut) for exclusive benefit of the Employee. The Company shall contribute
to such fund an amount equal to 7-1/2% of each monthly Gross Salary payment and
the employee shall contribute to such fund an amount equal to 2-1/2% of each
monthly Gross Salary payment. The Employee hereby instructs the Company to
transfer to such advancement fund the amount of the Employee's and the Company's
contribution from each monthly Gross Salary payment."
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly signed on
the date stated above.
T.T.R. Technologies Ltd.
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Xxxxxx Xxxxxxx
