EXHIBIT 10.29
AGREEMENT
MADE AND EXECUTED ON THE 30TH OF DECEMBER, 2002
BETWEEN: ITURAN LOCATION AND CONTROL LTD., PRIVATE COMPANY 00-000000-0
0X XXXXXXXX XX.
XXXXXXXXXX XXXX, XXXX
(HEREINAFTER: "ITURAN")
THE FIRST PARTY
AND BETWEEN: XXXX XXXXX
I.D. 50888627
00 XXXXXXXX XX., XXX HASHARON
(HEREINAFTER: "KAFRY")
THE SECOND PARTY
AND BETWEEN: XXXX XXXXXX
I.D. 56036374
00 XXXXXXXXXX XX., XXXXXX XXXXXX
(HEREINAFTER: "XXXXXX")
THE THIRD PARTY
AND BETWEEN: XXXXX XXXXXXXXX
I.D. 01450553
00 XXXXXX XX., XXXXXX XXXXXX
(HEREINAFTER: "XXXXXXXXX")
THE FOURTH PARTY
AND BETWEEN: TELEMATICS WIRELESS LTD.
PRIVATE COMPANY 00-000000-0
00 XXXXXXXXX XX., XXXXX
(HEREINAFTER: THE "COMPANY")
THE FIFTH PARTY
WHEREAS: On November 14th 1999, an agreement was signed by the Parties, in
which the rights of the Parties in the Company and between
themselves were set out, inter alia, (the "Initial Agreement") and
two written addendums were drawn up (on November 24th, 1999 and on
April 9th,
2000), (the addendums and the Initial Agreement shall hereinafter
be termed the "Agreement");
AND WHEREAS: Employment agreements have been signed between the Company and
Kafry, Franko and Xxxxxxxxx (hereinafter: the "Employment
Agreements");
AND WHEREAS: Ituran wishes to give Kafry, Franko and Xxxxxxxxx (the
"Directors") shares in Ituran as set out below in this agreement,
against receipt of the holdings of the Directors in the Company,
and the Directors agree to this,
AND WHEREAS: The Parties wish to change and amend the Agreement and the
Employment Agreements and regulate the relationship between them
resulting from said shares;
IT HAS THEREFORE BEEN PROVIDED, DECLARED, AND AGREED BETWEEN THE PARTIES AS
FOLLOWS:
1. THE PREAMBLE AND HEADINGS
1.1. The Preamble to this agreement constitutes an inseparable part
thereof.
1.2. The section headings are for convenience only, and shall not be
used for interpretation in any manner.
1.3. The provisions of this agreement shall override the provisions of
the Agreement, of the Employment Agreements and of any other
document or oral representation.
2. DECLARATIONS OF THE PARTIES
2.1. DECLARATIONS BY ITURAN
Ituran hereby declares vis-a-vis the Directors as follows:
2.1.1. The allocation of shares and of the option to purchase
Ituran shares to the Directors, as set out in this
agreement, is subject to the approval of the Board of
Directors of Ituran, the Stock Exchange, and the Securities
Authority.
2.1.2. Excluding the foregoing in sub-Section 2.1.1 above, no
impediment exists, either in law or by contract, to
allocation of the shares and of the option to purchase
Ituran shares, to the Directors, as specified below.
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2.1.3. The shares of Ituran to be allocated to the Directors and
the shares that shall result from the exercise of the
option as defined below, shall be free of any lien,
attachment, mortgage, or third party right of any sort and
shall grant the holders therein with all the rights to
which the holders of stock options/shares in Ituran are
entitled.
2.2. DECLARATIONS BY THE DIRECTORS
The Directors hereby declare vis-a-vis Ituran as follows:
2.2.1. The total of the shares of the Company owned by the
Directors is 465,574 shares of common stock bearing a
nominal value of 1 NIS each (hereinafter: the "Transferred
Shares of the Company"), and these comprise the entire
holdings of the Directors in the Company.
2.2.2. No impediment exists, either in law or by contract, to
transfer the Transferred Shares of the Company to Ituran.
2.2.3. The Transferred Shares of the Company are held and
registered, at the time this agreement is signed, with the
Mizrahi Hameuhad Bank Ltd. Trust Company (the "Trustee"),
and are free of any lien, attachment, mortgage, or third
party rights of any sort, and shall grant Ituran, after
being transferred, with all the rights to which the
shareholders in the Company are entitled.
2.2.4. The Directors shall instruct the Trustee to register the
Transferred Shares to the name of Ituran, at the request of
Ituran as set out in Section 3.1 below.
3. EXCHANGE OF SHARES
3.1. The Directors shall sign a share transfer xxxx of the Transferred
Shares of the Company, in respect of their entire holdings in the
Company, to Ituran, no later than thirty days after the signing of
this agreement. It is clarified that the holdings of the Directors
are held by the Trustee, and therefore the Directors undertake to
ensure that the Trustee will sign any document required for
transfer of the shares to Ituran. The Trustee shall sign the
documents only on the date the shares of Ituran are allocated to
the name of the Directors or to the name of a trustee on their
behalf.
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3.2. The documents of the transfer of the shares of the Directors in
the Company, including the documents which shall be signed by the
Mizrahi Bank Trust Company which will enable the transfer of the
shares of the Directors in the Company to Ituran, shall be held in
trusteeship by Attorney Ze'xx Xxxxx, who shall transfer them to
Ituran on the date the shares in Ituran shall be allocated to the
Directors. On the date the shares in Ituran are allocated to the
Directors, Attorney Xxxxx shall transfer all of the documents
which enable the transfer of the shares of the Company, as stated,
to Ituran, and Ituran shall be entitled to transfer the
Transferred Shares of the Company on its name.
3.3. Subject to receiving the approval of all the bodies mentioned in
sub-Section 2.2.1. above, Ituran shall allocate 152,365 shares(1)
of common stock in Ituran, bearing a nominal value of 1 NIS each,
having equal rights to all issued shares of Ituran and comprising,
as of the date this agreement is signed, 2.5% of the issued and
paid up capital of Ituran, to the Directors, at the meeting at
which the documents of transfer of the Transferred Shares of the
Company from the Directors to the name of Ituran, shall be
received. It shall be clearly understood that allocation of new
shares to any person after the signing of this agreement shall
reduce the proportion of the Directors in Ituran stock, as well as
the proportion of all the other holders of shares/options in
Ituran.
3.4. The Parties agree that if on the trading days beginning on 1
December, 2003 and concluding on 1 February, 2004, the value of
Ituran should be a total of less than USD 52 million, according to
the average daily dollar value of the share of Ituran at the Tel
Aviv Stock Exchange (according to the publications of the Tel Aviv
Stock Exchange), then Ituran shall allocate additional shares
numbering 76,182 shares(2) bearing a nominal value of NIS 1 each,
comprising 1.25% of the issued and paid up capital of Ituran, to
the Directors, while receiving no further consideration beyond the
Transferred Shares of the Company as above (the "Additional
Amount"). It shall be clarified that the Additional Amount shall
be subject to every legal limitation applicable at that time.
Ituran shall apply for the approval of the bodies stated in
sub-Section 2.2.1. above, regarding the Additional Amount as well.
The provisions of sub-Section 3.3. above shall apply, mutatis
mutandis, to the Additional Amount as well.
3.5. It shall be clarified that according to the Securities
Regulations, the shares and the Additional Amount allocated to the
Directors shall be completely restricted for three months, and
subsequently and for a period of one year each of the Directors
shall be entitled to sell no more than 1% of the issued and paid
up capital of Ituran per quarter. At the end of said year, no
further restriction shall apply to the sale of Ituran stock.
3.6. The Additional Amount shall be allocated to the Directors without
consideration.
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(1) According to the following division: Xxxx Xxxxx - 60,947 shares. Xxxx Xxxxxx
and Xxxxx Xxxxxxxxx - 45,709 shares each.
(2) According to the following division: Xxxx Xxxxx - 30,472 shares. Xxxx Xxxxxx
and Xxxxx Xxxxxxxxx - 22,855 shares each.
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3.7. At the date of the signing of this agreement, the allocation of
the shares and of the Additional Amount shall be subject to the
provisions of Section 102 of the Income Tax Ordinance, with all
the implications of that fact and the shares will be allocated to
the name of a trustee.
3.8. The Company shall bear all costs connected to the legal advice
that the Directors shall receive concerning this agreement, as
well as the costs the Trust Company shall incur in connection with
the restriction placed on the allocated shares - should there be
such costs.
3.9. Deleted intentionally.
3.10. Beginning on the date of the allocation of the shares to the
Directors, and so long as the Directors remain office holders in
the Company or in Ituran, the Directors shall be entitled to
appoint one observer on their behalf, to the Board of Directors of
Ituran.
4. TAXATION
4.1. The Directors alone shall pay any tax that should result from
receiving the shares and the Additional Amount (should it be
received), as well as from the transfer or sale therein.
5. WAIVER OF THE RIGHTS OF THE DIRECTORS AS SHAREHOLDERS IN THE COMPANY AND
OF RIGHTS DURING ISSUE OF STOCK
5.1. Concurrently with the transfer of the Transferred Shares of the
Company to Ituran, as stated in this agreement above, the
Directors shall waive any right whatsoever to receive
shares/options in the Company, insofar as they exist, and these
shall become void at that time. To avoid doubt, it is clarified
that the options to receive management shares in the Company which
have been given the Directors will also become void on the date
shares of Ituran are allocated, as set out in this agreement.
5.2. Upon allocation of the shares of Ituran to the Directors as set
out in this agreement, the Directors hereby waive any right
whatsoever granted to them by both the Agreement and their
Employment Agreements, concerning their holding of Company shares.
The Directors shall sign any document that shall be required in
order to amend the articles of the Company, so that they will
convey what is stated in this Section.
5.3. Notwithstanding the above, the Directors shall continue to serve
as directors on the Board of Directors of the Company, so long as
they continue to serve as office holders in the Company.
Subsequently, the board of directors may terminate their service
by a resolution passed by a regular majority.
5.4. So long as the Directors continue to serve in the Company as
office holders and for six months subsequently (if they should be
dismissed from the
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Company), the Directors shall be entitled to have shares/stock
options which shall be equivalent to 7.5% of the issued and paid
up capital of the Company, allocated to them without
consideration, as part of a prospectus to issue shares of the
Company to the public (if there should be such a prospectus). The
stock issue according to this Section shall be carried out subject
to such conditions and in such a manner as shall be agreed upon
with the underwriters of the stock issue. The exercise price shall
be one NIS and other arrangements (such as the period of vesting)
shall be as specified in said prospectus by the Board of Directors
of the Company.
5.5. So long as the Directors continue to serve in the Company as
office holders and for six months subsequently (if they should be
dismissed from the Company), the Directors shall be entitled to
have shares/stock options which shall be equivalent to 3.8% of the
issued and paid up capital of the Company allocated to them
without consideration, as part of a prospectus to issue shares of
a subsidiary of the Company which is making use of the
intellectual property of the Company, to the public (if there
should be such a prospectus). The stock issue according to this
Section shall be carried out subject to such conditions and in
such a manner as shall be agreed upon with the underwriters of the
stock issue. The exercise price shall be one NIS and other
arrangements (such as the period of vesting) shall be as specified
in said prospectus by the Board of Directors of the Company. It
shall be clearly understood, that such a stock issue shall be
subject to the control of the issued company remaining in the
hands of the Company, and for this purpose the Directors agree to
sign a voting agreement insofar as one shall be required in order
to keep control as stated.
5.6. Sections 6 and 7 of the Agreement are hereby voided.
6. CHANGES IN THE TERMS OF EMPLOYMENT OF THE DIRECTORS
6.1. The Employment Agreement of the Directors at the Company shall be
extended by five years, i.e. until 31 December, 2007 (the
"Determining Date") on the terms specified in the Employment
Agreements insofar as they were not expressly changed in this
agreement. After that date, the Board of Directors of the Company
shall be entitled to decide whether or not to extend the period of
employment or terminate it on a specific date
6.2. If the Company should cease to act as a going concern for any
reason whatsoever, the Directors will be employed by Ituran until
the Determining Date on the same terms at similar status, in a
separate division that shall be set up in Ituran and which shall
manage the activity of the Company. If no such position shall be
found for any one of the Directors, that Director shall be
entitled to resign from the Company as if dismissed, with all the
implications of such a resignation.
6.3. In lieu of the bonus to which the Directors are entitled pursuant
to the Employment Agreements, the Directors shall be entitled to a
single annual bonus at the end of each year beginning in 2003,
equivalent to 3% (three
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percent) of the operating profit without capitalizations, one time
expenses, and allocations (the "Bonus"), the Bonus shall not be
considered a salary for the purposes of social deductions or the
accrual of any rights whatsoever. Accordingly, any other bonus the
Directors had been entitled to according to their Employment
Agreement (insofar as they were entitled to such a bonus), shall
be revoked.
6.4. The Directors hereby waive the grossing up of the value of the use
of the vehicle provided them by the Company, and shall pay any tax
that shall result from receiving said vehicle.
7. MISCELLANEOUS
7.1. No change to this agreement shall be valid unless set out in
writing and signed by both parties.
7.2. Failure to implement any right whatsoever provided by this
agreement or by law, shall not be considered a waiver and the
other party shall gain no claim of delay.
7.3. This agreement revokes all prior or contradictory agreements
between the Parties on each subject dealt with herein.
7.4. No party is entitled to transfer his rights or obligations
pursuant to this agreement in any manner, in whole or in part
unless obtaining the consent of the other party.
7.5. The provisions of this agreement reflect and comprise all that was
agreed between the parties, and revoke previous agreements and/or
promises and/or representations, if made, with regard to this
transaction.
7.6. No changes to this agreement and/or its appendices shall be valid
in the least, unless made in writing and signed by all the
Parties.
8. NOTIFICATIONS
Notifications to any of the Parties concerning this agreement shall be
sent to the addresses of the Parties as specified in the preamble to this
agreement. All notifications shall be sent either by registered mail or
by messenger or by facsimile machine. Such notification shall be
considered to be received within three business days of the day it was
sent, if sent by registered mail, on the day of delivery if delivered by
messenger, and if sent by facsimile machine, on the same day, so long as
confirmation of its receipt in its entirety was received from the party
to which it was sent.
AND IN WITNESS THEREOF THE PARTIES HAVE AFFIXED THEIR SIGNATURES:
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/s/ Xxxx Xxxxx /s/ Xxxx Xxxxxx /s/ Xxxxx Xxxxxxxxx
------------------- ------------------- -------------------
Xxxx Xxxxx Xxxx Xxxxxx Xxxxx Xxxxxxxxx
[Signature and Stamp] [Signature and Stamp]
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Telematics Wireless Ltd. Ituran Location and Control Ltd
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