Exhibit 4.12
Employment and Services Agreement
---------------------------------
Duly made and executed in Haifa, Israel
as of the ___ of March 2004
by and between
Attunity Ltd.
Company no. 520038019
of Einstein Building, Tirat Carmel 39101, Israel
(Hereinafter "ATTUNITY")
OF THE FIRST PART
-----------------
And
Arie Gonen
I.D. NO. 00168950/4
2 Pinhas Lavon St.
Haifa, Israel
(Hereinafter "GONEN")
OF THE SECOND PART
------------------
WHEREAS GONEN has acted as CEO and Chairman of the Board of ATTUNITY from
October 1, 1987 until November 22, 2000 and has acted as Active
Chairman since November 22, 2000 until September 1, 2002 and
since September 1, 2002 has acted as Chairman and Interim CEO
until the date hereof; and
WHEREAS ATTUNITY wishes to appoint GONEN as Chairman and CEO and GONEN
agrees to serve as Chairman and CEO Attunity on the terms and
conditions set forth herein;
NOW, THEREFORE, in condition of the mutual promises and undertaking of the
parties, it is hereby agreed as follows:
1. DUTIES AND RESPONSIBILITIES
---------------------------
1.1. Subject to the terms and conditions of this Agreement (i) GONEN shall
serve as Chairman of the Board of ATTUNITY, and (ii) GONEN shall also
serve as CEO of ATTUNITY.
1.2. During the term of GONEN's employment, GONEN shall:
1.2.1. Devote his full working time and best efforts to the business
and affairs of ATTUNITY and the performance of his duties
hereunder (this Section 1.2.1 is not applicable to the Services
Period as described in section 7 herein); and
1.2.2. Not engage in or be associated with, directly or indirectly,
any competitive business, duties or pursuits; and
1.2.3. Not undertake or accept any other paid or unpaid employment or
occupation or engage in or be associated with, directly or
indirectly, any other businesses, duties or pursuits to the
extent such activities will materially interfere with his duties
hereunder (this Section 1.2.1 is not applicable to the Services
Period as described in section 7 herein).
1.3. GONEN agrees that during a one year period ("One Year Period")
starting January 25, 2004 and ending January 24, 2005, GONEN will
spend at least sixty six percent (66%) of his time in the United
States. However, GONEN will be entitled to spend less than sixty six
percent (66%) of his time in the United States upon the occurrence of
any of the following events:
1.3.1. GONEN's employment is terminated by Attunity (except for
Justifiable Cause).
1.3.2. GONEN stop serving as CEO at the Company's request.
1.3.3. GONEN's is requested by the Board of Directors of ATTUNITY not
to spend sixty six percent (66%) of his time in the United States
during the One Year Period.
1.3.4. Change of Control.
1.4. For the purposes of this agreement, "Change of Control" shall mean:
1.4.1. The approval by the stockholders of ATTUNITY of a merger or
consolidation of ATTUNITY with any other corporation, other than
a merger or consolidation which would result in the voting
securities of ATTUNITY outstanding immediately prior thereto
continuing to represent (either
by remaining outstanding or by being converted into securities of
the surviving entity) sixty percent (60%) or more of the total
voting power represented by the voting securities of ATTUNITY or
such surviving entity outstanding immediately after such merger
consolidation; or
1.4.2. Any "person" (as that term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of
securities of ATTUNITY representing 60% or more of the total
voting power represented by ATTUNITY's then outstanding voting
securities;
2. TERM AND TERMINATION
2.1. This Agreement shall commence as of January 1, 2004 and will remain in
effect until the end of the term of the Services Period (as defined in
Section 7.2 below), unless earlier terminated in accordance with the
terms and provisions of this Section 2.
2.2. ATTUNITY shall have the right to terminate this Agreement at any time
for Justifiable Cause (as hereunder defined) as determined by the
board of directors of ATTUNITY, by giving GONEN written notice of
termination for cause. In such event, this Agreement and the
employment relationship shall be deemed effectively terminated upon
the time of delivery of such notice.
The term "Justifiable Cause" shall mean (a) a serious breach of trust
including but not limited to theft, embezzlement, breach of fiduciary
duty, prohibited disclosure to unauthorized person or entities of
confidential or proprietary information of or relating to ATTUNITY and
the engaging by GONEN in any prohibited businesses competitive to the
business of ATTUNITY and its subsidiaries, affiliates or associated
companies, or (b) any willful failure to perform competently any of
GONEN's fundamental functions or duties hereunder or other cause
justifying termination or dismissal under applicable law.
2.3. During the period following the Termination of Employment Date (as
defined in Section 7.1 below), GONEN shall cooperate with ATTUNITY and
use his best
efforts to assist the integration into ATTUNITY's organization of the
person or persons who will assume GONEN's responsibilities.
3. COMPENSATION
3.1. Commencing January 1, 2004 and until the Termination of
Employment Date (as defined in Section 7 below), ATTUNITY shall
pay GONEN as compensation a monthly gross salary of ninety
thousand (90,000) New Israel Shekels ("NIS") payable until the
9th of the following month (the "Gross Salary"). The Gross Salary
payable each month shall be linked to the Israeli Consumer Price
Index published by the Israeli Central Statistic Bureau. The base
index will be the index of December 2003. The Gross Salary can be
only increased as a result of changes in the Israeli Consumer
Price Index. Such compensation shall be comprehensive and all -
inclusive in that it shall be deemed to include all overtime
payments according to the terms of the Working Hours and Rest Law
5711 - 1951 or any other similar law or provision which may
apply.
3.2. GONEN shall be entitled to the use of an automobile owned by
ATTUNITY ("Company Car"), the price of which will not exceed
seventy five thousand ($75,000) US Dollars. ATTUNITY shall
reimburse GONEN for all expenses relating to the use and upkeep
of such automobile. ATTUNITY will replace such Company Car at
least every forty-eight (48) months. Upon termination of this
Agreement for any reason, GONEN will have the option to purchase
such automobile at its book value at the time of such
termination. GONEN will keep his Company Car for six (6) months
commencing from the Termination of Employment Date as set for in
Section 7 herein.
3.3. GONEN shall be entitled to full reimbursement for his home
telephone expenses, including calls made abroad.
3.4. GONEN shall be entitled to a refund for all-reasonable
entertainment and living expenses both in Israel and abroad, upon
the furnishing of receipts, relating to his employment with
ATTUNITY.
3.5. ATTUNITY and GONEN shall obtain and maintain Managers Insurance
(Bituach Menahalim) in the customary form for the exclusive
benefit of GONEN. ATTUNITY shall pay an amount equal to 13.33% of
each monthly Gross Salary payment towards the premiums payable in
respect of such insurance. GONEN shall pay, by deduction from
salary, 5% of each monthly Gross Salary and ATTUNITY shall pay an
additional amount equal to 2.5% of each monthly Gross Salary for
insurance against disability. It is hereby agreed that GONEN's
benefits under the foregoing insurance shall come in lieu of, and
as full and final substitution for severance pay to which GONEN
may otherwise be entitled under applicable law.
When GONEN's employment is terminated for whatsoever reason
(except for Justifiable Cause) GONEN will be entitled to a
severance payment that is calculated at two times his last Gross
Salary (as described in Section 3.1) multiplied by the number of
years since October 1, 1987, less the amount accumulated in the
severance component of the Manager Insurance specified above and
GONEN's Managers Insurance will transferred to GONEN.
3.6. GONEN shall be entitled to "Keren Hishtalmut" as customary for
all ATTUNITY employees.
3.7. GONEN shall be entitled to paid annual vacation of twenty five
(25) working days, based on five (5) working days week, with
respect to and during each twelve (12) month period of his
employment hereunder. Such vacation, in respect to any year, may
be carried forward. GONEN will be entitled to be paid for
unutilized accrued vacation on a yearly basis. However, Gonen has
waived his accrued vacation until December 31, 2002.
3.8. In the event that GONEN shall be required by ATTUNITY to spend
time abroad, he shall be entitled to a special grant equal to the
amount of days he has spent outside Israel multiplied by a daily
rate of one hundred and thirty four US Dollars ($134), in
addition to the reimbursement of his expenses as specified in 3.4
above.
3.9. GONEN shall be entitled to a bonus according to the Bonus Plan
attached hereto as Schedule 1. In addition, commencing 2002, the
Board of Directors will be entitled to award GONEN with
additional bonuses, which shall not exceed One Hundred Thousand
US Dollars ($100,000) per calendar year.
3.10.Subject to GONEN's fulfillment of his obligations under Section
1.3 herein, GONEN has been granted six hundred thousand (600,000)
stock options to purchase Ordinary Shares of ATTUNITY pursuant to
ATTUNITY's 2003 Employee Stock Option Plan at a price of $1.92
per share to be vested only upon a Change of Control.
Those options are exercisable upon a Change of Control as defined
above.
3.11.GONEN agrees and accepts that in January 2002 ATTUNITY
implemented a 20% temporary salary reduction plan for all its
employees and as long as this reduction plan for all employees is
not changed Gonen's Gross Salary will be reduced by 20%. This
reduction will not apply to section 3.5 regarding which the
salary mentioned in section 3.1 shall prevail.
4. PROPRIETARY INFORMATION
4.1. GONEN acknowledges and agrees that ATTUNITY possesses and will
continue to possess and acquire information, trade secrets and
technology that has been created, discovered or developed, or has
otherwise become known to ATTUNITY in the field of computer software
and services, including without limitation, information and technology
that has been assigned or otherwise conveyed to ATTUNITY, which
information has commercial value in the business in which ATTUNITY is
engaged. Such information, whether documentary, written oral or
computer generated, shall be deemed to be and referred to as
"Proprietary Information", which includes but is not limited to trade
marks, trade secrets, copyrights, processes, formulas, data and
know-how, improvements, inventions, techniques, products, forecasts,
third party products and know-how and customer lists.
4.2. Proprietary Information shall be deemed to include any and all
proprietary information disclosed by or on behalf of ATTUNITY and
irrespective of form but excluding information that (a) was known to
GONEN prior to his association with ATTUNITY and can be so proven by
GONEN; (b) shall have become a part of the public knowledge except as
a result of breach of this Agreement by GONEN; (c) shall have been
received by GONEN from a third party having no obligation towards
ATTUNITY; (d) reflects general skills and experience gained during
GONEN's employment by ATTUNITY; or (e) reflects information and data
generally known within the industries or trades in which ATTUNITY
competes.
4.3. GONEN agrees and declares that all Proprietary Information, patents
and other rights in connection therewith shall be the sole property of
ATTUNITY and it's assigns. At all times, both during his employment by
ATTUNITY and after its termination, GONEN will not use or disclose any
Proprietary Information or anything relating thereto without the
written consent
of ATTUNITY except as may be necessary in the ordinary course of
performing his duties hereunder.
4.4. Should, for any reason, any one or more of the terms contained in
Sub-Paragraphs 4.1. 4.2. And 4.3 of this Section 4 be held to be
excessively broad with regard to time, geographic scope or activity,
that term shall be construed in a manner to enable it to be enforced
to the extant compatible with applicable law.
4.5. GONEN's undertakings in this Paragraph 4 shall remain in full force
and effect for two (2) years after termination of this Agreement.
5. NON-COMPETITION
GONEN agrees and undertakes that he will not, during the term of this
Agreement (including the Service Period) and for a period of one year
thereafter:
5.1. Directly or indirectly, as owner, partner, joint venturer, stock
holder, employee, broker, agent, principal, trustee, corporate
officer, director, licensor, licensee or any capacity whatsoever
engage in, become financially interested in, be employed by, or have
any connection with in Israel or any other country any business or
venture worldwide that is engaged in any activities involving either
(a) products or services similar to the actual products then produced
by ATTUNITY or its subsidiaries or affiliates, or (b) information
processes, technology or equipment in which ATTUNITY or its
subsidiaries or affiliates then has a proprietary interest; provided,
however that GONEN may own any securities of any corporation which is
engaged in such business and is and is publicly-owned and trade but in
any amount not to exceed at any one time ten percent (10%) of any
class of stock or securities of such company, so long as he has no
active role in the publicly-owned and traded company as traded company
as director, employee, consultant or otherwise.
5.2. Employ (other that through ATTUNITY or its subsidiaries) any person
employed by ATTUNITY during the previous twelve (12) months for any
purpose or in any place in any business in which he is deemed to be a
control person as defined under any Israeli or U.S. securities or
banking laws or regulations.
5.3. Should, for any reason, any one or more of the terms contained in
Sub-Paragraphs 5.1 and 5.2 of this
Section 5 be held to be excessively broad with regard to time,
geographic scope or activity, that term shall be construed in a manner
to enable it to be enforced to the extent compatible with applicable
law.
6. NO RESTRICTION ON EMPLOYMENT
GONENrepresents and warrants that on the date hereof he is free to be
employed by ATTUNITY upon the terms contained in this Agreement and that
there are no employment contracts, consulting contracts or restrictive
covenants preventing full performance of his duties hereunder.
7. TERMINATION OF GONEN's EMPLOYMENT AND THE SERVICES PERIOD
7.1. ATTUNITY has the right to change GONEN's position as CEO while
continuing GONEN's employment with ATTUNITY, and such change of
position shall not constitute termination of employment for purposes
of this Section 7 of this Agreement or for any other purpose. ATTUNITY
shall give GONEN at least thirty (30) days notice of the termination
of his employment with ATTUNITY. If GONEN wishes to terminate his
employment with Attunity, he shall give ATTUNITY at least thirty (30)
days written notice. (collectively the "Termination of Employment
Date")
7.2. After the Termination of Employment Date, GONEN shall not be entitled
to the Gross Salary and the other benefits specified in Section 3
above (except as expressly specified in Section 3.2 and according to
Sections 3.9 and 3.10) and the following provisions will instead
apply:
7.2.1. For a period of thirty six (36) months commencing on the
Termination of Employment Date (the "Services Period"), GONEN
undertakes to provide up to fifty four (54) hours of consulting
services per month to ATTUNITY and not more than One thousand
nine hundred forty four (1,944) hours on an accumulative basis.
The Board of ATTUNITY will exclusively determine GONEN's duties
and title during the Services Period. GONEN will be entitled to
all the payments under this Section 7.2 herein regardless of
whether ATTUNITY utilizes GONEN's services.
GONEN recognizes that from time to time the Board might require
from GONEN to provide more
than fifty four (54) hours per month. In such events GONEN will
make his best effort to comply with such requests, however,
GONEN's accumulative commitment will not exceed one thousand nine
hundred forty four (1,944) hours for the Services Period.
7.2.2. In the event that GONEN will be required by ATTUNITY to travel
abroad, a full day will be calculated at eight (8) hours and will
include GONEN's flying time. In such an event, GONEN shall be
entitled to a payment that is equal to the amount of days he has
spent outside Israel multiplied by a daily rate of one hundred
thirty four US Dollars ($134), in addition to the reimbursement
of his reasonable expenses, in accordance with ATTUNITY'S expense
reimbursement policy.
7.2.3. In consideration for GONEN's availability to provide the
Consulting Services during the Services Period, ATTUNITY shall
pay GONEN thirty six (36) monthly payments of thirteen thousand
five hundred US Dollars ($13,500) plus VAT (the "Payments"), to
be paid by the 25th of each month. GONEN will furnish ATTUNITY
with an invoice for each month by the 30th of the month. Payments
will be made in NIS in accordance with a last known
representative exchange rate published by the Bank of Israel.
These monthly payments will not be changed as long as the
cumulative commitment specified in section 7.2.1 will not exceed
one thousand nine hundred forty four (1,944) hours for the
Services Period.
7.3. In the event that ATTUNITY wishes to terminate GONEN's employment
agreement with ATTUNITY due to the failure of ATTUNITY to achieve its
financial milestones agreed to from time to time by GONEN and the
Board of Directors of ATTUNITY, in writing, ATTUNITY shall have the
right to pay GONEN a one-time, upfront lump-sum payment of two hundred
and fifty thousand US Dollars ($250,000) instead of the payments that
GONEN is entitled to receive during the Services Period described in
sections 7.2.1, 7.2.2, and 7.21.3 and GONEN will not be required to
provide the related services.
7.4. The parties acknowledge that during the Services Period, there will
not be any employer - employee
relationship between ATTUNITY and GONEN and GONEN will be acting as an
independent contractor.
8. GENERAL PROVISIONS
8.1. This Agreement shall not be amended, modified or varied by any oral
agreement or representation or otherwise than by a written instrument
executed by both parties or by their duly authorized representative.
8.2. No failure, delay or forbearance of either party in exercising any
power or right hereunder shall in any way restrict or diminish such
party's rights and powers under this Agreement, or operate as a waiver
of any of the terms or conditions hereof.
8.3. If any term or provision of this Agreement shall be declared invalid,
illegal, or unenforceable, to the extent that a court shall deem it
reasonable to enforce such term or provision and if such term or
provision shall be unreasonable to enforce to any extent, such term or
provision shall be severed and all remaining terms and provisions
shall be unaffected and shall continue in full force and effect.
8.4. The terms and conditions of this Agreement supersede those of all
previous agreements and arrangements, either written or oral, relating
to the subject hereof, including the Employment Agreement between
ATTUNITY and GONEN dated January 1, 1996 and including the Agreement
dated September 1, 2002.
8.5. This Agreement is personal to GONEN and GONEN shall not assign or
delegate his rights or duties to a third party, whether by contract,
will or operation of law, without ATTUNITY's prior written consent,
except moneys and compensation rights that may be passed to his heirs.
8.6. This Agreement shall inure to the benefit of ATTUNITY's successors and
assigns.
8.7. Each notice and/or demand given by one party pursuant to this
Agreement shall be given in writing and shall be sent by registered
mail to the other party at the address appearing in the caption of
this Agreement or by facsimile and such notice and/or demand shall be
deemed given at the expiration of twelve (12) hours after dispatch by
facsimile, three (3) days from the date of mailing by registered mail
or immediately if
delivered by hand. Such address shall be effective unless notice of
change in address is provided by registered mail to the other party.
8.8. Any dispute arising out of or in connection with this Agreement will,
in the failure of the parties to reach an amicable agreement, be
finally settled by a single arbitrator appointed in accordance with
the agreement of the parties. In the absence of agreement within
twenty one (21) days from the written request of one party for the
appointment of an arbitrator, the chairman of the Israeli Bar
Association shall appoint an arbitrator.
The arbitrator shall be a lawyer knowledgeable in the laws
appertaining to computers and software. The arbitrator shall be bound
in his deliberations by the substantive laws of the State of Israel
and shall provide the parties with written reasons for his decision.
8.9 This Agreement is subject to the required corporate approvals of
Attunity.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
Attunity Ltd. Arie Gonen
- ------------------------------------ -------------
SCHEDULE 1 - BONUS PLAN
GONEN will receive a bonus according to the following:
1. Commencing January 1, 2004 and until December 31, 2007, ATTUNITY will pay
GONEN nine percent (9%) of all licenses and maintenance revenues received
by ATTUNITY from International Distributors, which the Board assigned GONEN
to appoint (including the International Distributors were appointed during
2002). This bonus will be paid within sixty (60) days of the receipt of
payments from the Internal Distributors. However, this yearly bonus will
not exceed the lower of (i) five percent (5%) of the yearly net profit
excluding impairment of intangible Assets of ATTUNITY and (ii) one hundred
thousand US Dollars ($100,000) per year.
2. GONEN will also receive an additional bonus that is equal to six percent
(6%) of revenues received from Oracle (Transparent Gateway) in 2004. These
bonuses will be paid within fourteen (14) days of the receipt of payments
from Oracle.
3. In the event that GONEN will be assigned by the Board to raise funds for
ATTUNITY in any form including equity and convertible debentures and
exercise of Warrants. GONEN will be entitled to three-year warrants at the
closing price of fund raising deal of up to seven percent (7%) of the
amount of shares that were issued in the fund raising deal, the exact
percentage to be determined by the Board of ATTUNITY. To remove doubt, this
provision will only apply to investors introduced to ATTUNITY by GONEN.
4. In the event that ATTUNITY will be acquired in a merger or an acquisition
transaction, GONEN will be entitled to a fee that is up to seven percent
(7%) of the total value of the consideration paid for ATTUNITY in such a
transaction, the exact percentage to be determined by the Board of
ATTUNITY. However, the percentage will be no less than three percent (3%)
in the event that the closing of the acquisition occurs on or before
December 31, 2004; two percent (2%) if the closing of the acquisition
transaction occurs at any time between January 1, 2005 and December 31,
2005 and one percent (1%) if the closing of the acquisition transaction
occurs at any time between January 1, 2006 and December 31, 2007.
Thereafter, GONEN shall not be entitled to any fee in connection with or
relating to an acquisition transaction.