EXHIBIT 10.16
EMPLOYMENT AGREEMENT
DATED MARCH 1, 2000
BY AND BETWEEN
NOGATECH LTD., a company having an office and place of business in 0 Xxxxxxxx
Xx., Xxxx Xxxx, Xxxxxx (the "COMPANY")
AND
XX. XXXX XXXXXX, identity number 000000000 of 00 Xxxxxx Xxxxxx Xxxxxx,
Xx'xxxxx, Xxxxxx (the "EMPLOYEE")
WHEREAS, the Company desires to employ the Employee as its President and
Chief Executive Officer, and to avail itself of the Employee's talents and
abilities; and
WHEREAS, the Employee desires to be employed by the Company, subject to the
terms and conditions set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. EMPLOYMENT DUTIES
1.1. Employee shall perform the responsibilities of President and Chief
Executive Officer, and any responsibilities incidental thereto.
Employee shall not become engaged in any other occupation whether
for compensation or not while employed hereunder, without the
express written consent of the chairman of the Board of Directors
of the Company.
1.2. Employee's employment with the Company may require travel outside
Israel, and the Employee agrees to such travel as may be necessary
in order to fulfill his duties toward the Company.
1.3. Employee's position is a "senior managerial position", as defined
in the Work and Rest Hours Law, 1951, and requires a high level of
trust. Accordingly, the provisions of said law shall not apply to
Employee and Employee agrees that he may be required to work
beyond the regular working hours of the Company, for no additional
compensation other than as specified in this Agreement.
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1.4. Employee declares that the fulfillment of the undertakings
pursuant to this Agreement, his employment by the Company and the
use of information in his possession and of his abilities, does
not breach, and will not breach, any other agreement or
undertaking for the preservation of confidentiality and
non-competition to which he is a party. Employee agrees and
undertakes not to perform any act or to omit to perform any act
which may breach his fiduciary duty to the Company or which may
place him in a position of conflict of interest with the
objectives of the Company. In addition, Employee agrees and
undertakes to inform the Company promptly of any such matter which
may place him in such a situation of potential conflict of
interest.
2. TERM
This Employment Agreement commences as of March 1, 2000 and shall
continue for a period of twelve (12) months (the "Initial Term"),
unless sooner terminated in accordance with the terms of Section 9.1
below. Upon the expiration of the Initial Term, this Employment
Agreement shall automatically renew for successive twelve (12) month
periods (each twelve month period shall be referred to as an "Extended
Term"), unless sooner terminated in accordance with the terms of
Sections 9.1 or 9.2 below.
3. COMPENSATION
3.1. FIXED SALARY. Employee shall receive a fixed monthly Gross Salary
of NIS 51,000 (Fifty One Thousand New Israeli Shekels) (the "GROSS
SALARY"), payable on a monthly basis.
3.2. VACATION. Employee shall accrue paid vacation at the rate of
twenty-five (25) days for each twelve (12) months of employment.
Employee may not accumulate his vacation days for more than twenty
four (24) months of employment.
3.3. SICK LEAVE. Employee shall accrue sick leave at the same rate
generally available to the Company's employees according to the
provisions of the Sick Pay Law - 1976 and subject to Employee
producing the required medical certificates.
3.4. BENEFITS. During the term of Employee's employment, Employee shall
be entitled to Manager's Insurance (Bituach Menhalim) to be
registered on his name, in an amount equal to 15.83% of the Gross
Salary, which shall be paid monthly to said Manager's Insurance
Plan directly by the Company. The insurance shall be allocated as
follows: (i) 8.33% in respect of severance compensation, (ii) 5%
in respect of pension and (iii) up to 2.5% in respect of
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disability. An additional 5% of the Gross Salary shall be
deducted by the Company from the monthly payment of Employee's
salary as Employee's contribution to said Manager's Insurance.
Notwithstanding anything in this agreement to the contrary, in the
event that the employment relationship between Employee and the
Company is terminated in such circumstances that entitle the
Company to refrain from paying Employee severance pay pursuant the
relevant labor laws of the State of Israel, Employee shall
immediately transfer and return to the Company the title and any
and all amounts accumulated in the Manager's Insurance on account
of severance pay.
3.5. EDUCATION FUND. The Company shall contribute to a Continuing
Education Fund (Keren Hishtalmut), to be chosen by the Company for
the benefit of Employee, in an amount equal to 7.5% of his Gross
Salary per month, subject to Employee's contribution of an
additional 2.5% of his Gross Salary per month. All tax obligations
related to the Education Fund shall be borne by the Employee.
3.6. The Company shall provide and pay Employee Recreation Funds (Dmei
Havra'ah) at the rate required by law and regulations.
4. EXPENSES
The Company shall reimburse Employee for his normal and reasonable
expenses incurred for travel, entertainment and similar items in
promoting and carrying out the business of the Company in accordance with
the Company's general policy, in effect from time to time. The Employee
shall provide the Company with copies of all invoices and receipts, and
otherwise account to the Company in sufficient detail to allow the
Company to claim an income tax deduction for such paid item, if item is
deductible. Reimbursement shall be made on a monthly, or more frequent,
basis, in accordance with Company's policy.
5. RESERVE DUTY
Immediately upon receipt of a notice of reserve duty, Employee shall
report such notice to the Company's Board of Directors. Upon Employee's
return from reserve duty, Employee shall deliver to the Company
appropriate confirmation of reserve duty served from his military unit,
against which the Company shall pay Employee his regular compensation
package with respect to the period served.
6. COVENANT NOT TO COMPETE
Employee agrees that he is and shall be in a position of special trust
and confidence and will have access to confidential and proprietary
information about the Company's
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business and plans. Employee 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 competitive with the Company's business,
including projects under consideration by the Company at the time of
termination, during the term of his employment for a period of
eighteen (18) months after the termination of his employment,
regardless of the reason for such termination and regardless of
whether such termination was initiated by the Employee or by the
Company.
7. CONFIDENTIALITY AND TRADE SECRETS
7.1. KNOW-HOW AND INTELLECTUAL PROPERTY. It is understood that the
Company has developed or acquired and will continue to develop or
acquire certain products, technology, unique or special methods,
manufacturing and assembly processes and techniques, trade
secrets, written marketing plans and customer arrangements, and
other proprietary rights and confidential information which are
not in the public domain (collectively referred to as the "COMPANY
PROPERTY"). It is expected that the Employee will gain knowledge
of and utilize the Company Property during the course and scope of
his employment with the Company, and will be in a position of
trust with respect to the Company Property. All inventions and
developments made by the Employee for the Company in the context
of his employment with the Company, and all intellectual property
rights contained therein, are Company Property. Employee agrees
that all rights he has to any technology, patents, copyrights,
ideas in whatever form, and any other intellectual property
rights, which relate to the Company Property are unconditionally
assigned to and owned, free of any third party rights or
encumbrances, by the Company, and the Employee agrees to cooperate
with the Company and to provide to it all details necessary to
carry out any registration or act, to sign all documents and to
take all actions to enable the Company to make use of all the
Company Property, to duly register the same, whether in Israel or
abroad, should the Company desire to do so, and/or to protect the
same in any other manner as the Company shall see fit. The
Employee's obligation to assist the Company in the acquisition and
enforcement of intellectual property rights and protections in
connection with the Company Property shall survive the termination
of this Agreement and the termination of Employee's employment
with the Company.
7.2. COMPANY PROPERTY. It is hereby stipulated and agreed that the
Company Property shall remain the Company's sole property. It is
further stipulated and agreed by the parties, as a material
inducement for the Company having entered into this Agreement and
remaining a party hereto (subject to any early
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termination hereof by the Company), that Employee shall be
bound by the Employee Non-Disclosure Agreement appended hereto
as Appendix A.
Notwithstanding the foregoing, it is hereby agreed that the patents
specified in Appendix B hereto were developed by the Employee prior his
commencement of employment for the Company, and therefore such patents
shall not be deemed to be Company Property.
7.3. EFFECT OF TERMINATION. In the event that Employee's employment is
terminated, for whatever reason, Employee agrees not to copy, make
known, disclose or use, any of the Company Property, and the
Employee shall continue to observe the provisions of the Employee
Non-Disclosure Agreement, which shall survive such termination.
Without derogating from the Company's rights under the law of
torts, Employee further agrees not to endeavor or attempt in any
way to interfere with or induce a breach of any relationship that
the Company may have with any employee, customer, contractor,
supplier, representative, or distributor for a period of eighteen
(18) months from the date of any termination of Employee's
employment with the Company for any reason whatsoever. Employee
agrees, upon termination of employment, to deliver to the Company
all confidential papers, material documents, records, lists and
material notes (whether prepared by Employee or others), in any
media whatsoever, comprising or containing the Company Property,
without retaining any copies thereof, and any other property of
the Company.
7.4. MATERIAL BREACH. It is hereby agreed that a breach of Sections 6
or 7 or Appendix A hereto shall be considered as a material
breach of this Agreement.
8. CORPORATE OPPORTUNITIES
In the event that during the Employment Term, any business opportunity
related to the Company's business shall come to Employee's knowledge,
Employee shall promptly notify the chairman of the Board of Directors of
the Company of such opportunity. Employee shall not appropriate for
himself or for any other person other than the Company, any such
opportunity, except with the express written consent of the chairman of
the Board of Directors of the Company, in advance. Employee's duty to
notify the Company and to refrain from appropriating all such
opportunities shall neither be limited by, nor shall such duty limit, the
application of the general law of Israel relating to the fiduciary duties
of an agent or employee.
9. TERMINATION OF EMPLOYMENT
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9.1. GENERAL. This Agreement may be terminated by Employee at any
time, without cause, by giving the Company 30 (thirty) days
advance written termination notice.
This Agreement may be terminated by the Company at any time, without
cause, by giving the Employee a twelve (12) months advance written
termination notice ("Notice Period").
In the event that the Company terminates this Agreement without cause,
Employee shall be deemed to have continuously remained an Employee of the
Company throughout the Notice Period. Notwithstanding Section 1.1
hereinabove, during the Notice Period, Employee shall be entitled to be
employed by other employers, subject to Sections 6 and 7 above, and
the terms of Appendix A hereto. In the event that the Company terminates
this Agreement without cause, the non-competition period (as specified in
Section 6 above) shall commence upon the delivery to the Employee of
notice of discharge by the Company.
9.2. TERMINATION FOR CAUSE. The Company may immediately terminate
Employee's employment at any time for Cause. Termination for Cause
shall be effective from the receipt of written notice thereof to
Employee. "Cause" means: (i) material violation of any of Sections
1, 6, 7, 8 of this Agreement; (ii) conviction of any
felony which involves moral turpitude; or (iii) intentional
disclosure confidential information relating to the Company or its
business to a third party, other than in the course of carrying
out Employee's duties hereunder. The Company's exercise of its
rights to terminate with Cause shall be without prejudice to any
other right or remedy it may have.
9.3. LOAN. In the event that the Company terminates this Agreement
without cause, the Company shall extend the Employee a loan (the
"Loan") in an amount equal to the aggregate exercise price of the
vested and unexercised options to purchase shares of Nogatech,
Inc., then held by the Employee. The Loan shall bear interest and
shall be linked to the Consumers Price Index then in effect, all
as shall then be customary with respect to loans from employers to
employees. The maturity date of the Loan shall be at the end of
five (5) years following its grant. Employee shall bear all tax
consequences in connection with the Loan.
9.4. During the notice period, Employee shall cooperate with the
Company in connection with its efforts to substitute a successor
in place of Employee and smoothly transfer Employee's
responsibilities to such successor.
10. MISCELLANEOUS
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10.1. 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. For the avoidance of doubt, it is hereby
clarified that nothing herein shall affect any of the social
benefits accrued by the Employee prior to the date hereof pursuant
to the employment agreement dated July, 1993. 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.
10.2. 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 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.
10.3. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Israel. In the event
of any controversy or claim arising out of or relating to this
Agreement, or breach thereof, the parties may apply solely to the
court having jurisdiction in Tel Aviv - Jaffa, Israel.
10.4. NOTICES. All notices, requests, demands, instructions or other
communications required or permitted to be given under this
Agreement or related to it 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 two (2) days 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.
10.5. NO CONFLICTING AGREEMENTS. Employee declares that he is not bound
by any agreement, understanding or arrangement according to which
the execution of and compliance with this Agreement may constitute
a breach or default.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
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/s/ X. Xxxxxx
------------------------------------ ------------------------------------
NOGATECH LTD. XX. XXXX XXXXXX
BY: /s/ Xxxxxx Hod
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Appendix B
1. Channel error recovery.
2. video cassette directory.
