EXHIBIT 10.40
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
OF NATHAN HOD
WITH
DSP TELECOM, INC.
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") made and
entered into effective as of this 1st day of November, 1995, by and between DSP
TELECOM, INC., a California corporation (hereinafter the "Corporation"), and
NATHAN HOD (hereinafter "Hod").
RECITALS
A. On May 1, 1994, Hod and the Corporation entered into an Employment
Agreement (the "Employment Agreement"), for the provision by Hod of certain
services to the Corporation.
B. Certain provisions of the Employment Agreement were previously
amended.
C. The Corporation and Hod desire to amend and restate the Employment
Agreement according to the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT DUTIES.
a. GENERAL. The Corporation hereby agrees to employ Hod, and Hod
hereby agrees to accept employment with the Corporation, on the terms and
conditions hereinafter set forth.
b. CORPORATION'S DUTIES. The Corporation shall allow Hod to, and
Hod shall, perform responsibilities normally incident to his position as Chief
Executive Officer of both the Corporation and DSP Communications, Inc. ("DSPC"),
and Chairman of the Board of the Corporation, commensurate with his background,
education, experience and professional standing. The Corporation shall provide
Hod with a private office, stenographic help, office equipment, supplies,
customary services and cooperation suitable for the performance of his duties.
These duties shall be performed primarily in Santa Clara, California.
c. HOD'S DUTIES. Unless otherwise agreed to by the parties, Hod
shall serve as the Chief Executive Officer of both the Corporation and DSPC, and
Chairman of the Board of the Corporation. Hod shall devote his full productive
time, attention, energy, and skill to the business of the Corporation and DSPC
during the employment term set forth below, and
shall not become engaged to render similar services on behalf of any other
entity while employed hereunder, without the Corporation's consent, except
that he is allowed to serve as the Chairman of the Board of Nogatech, Inc.
Hod shall report directly to the Corporation's Board of Directors and the
Chairman of the Board. Hod shall inform the Board of Directors of any
positions that he takes in any corporation other than DSPC. Hod, however,
shall be allowed to perform services for the Corporation's affiliates,
including, without limitation, DSP Telecommunications, Ltd, CTP Systems, Ltd,
DSPC Israel, Ltd, DSPC Japan, Inc., and CTP Systems, Inc.
2. TERM. This Agreement shall terminate December 31, 2000, unless
(a) extended as set forth herein, or (b) terminated sooner under the terms of
this Agreement. Thereafter, this Agreement may be renewed by Hod and the Board
of Directors of this Corporation 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 Hod hereunder, including any agreed-to extension.
3. COMPENSATION. Hod shall be compensated as follows:
a. FIXED SALARY. Hod 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 twelve (12) month period during the employment
term based upon Hod's services and the Corporation's financial results during
the calendar year, and to make such increases as may be determined appropriate
in the discretion of the Corporation's Board of Directors.
b. PAYMENT. Hod's fixed salary shall be payable on a semi-monthly
basis.
c. BONUS COMPENSATION. During the employment term, Hod shall
participate in each bonus plan adopted by the Corporation's Board of Directors.
Commencing in 1996, Hod shall be entitled to receive an annual bonus equal to
(i) twenty-five percent (25%) of his base salary should this Corporation meet
eighty percent (80%) of its plan as presented to the Board in January of each
year, during the term of Hod's employment ("Yearly Plan"); (ii) fifty percent
(50%) of his base salary should this Corporation meet its Yearly Plan; and (iii)
one hundred percent (100%) of his base salary should this 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%).
The meeting of the Yearly Plan for purposes of this Section 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
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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. Hod shall accrue paid vacation at the rate of twenty
(20) days for each twelve (12) months of employment. Hod shall be compensated
at his usual rate of compensation during any such vacation. Hod shall be
entitled to ten (10) paid holidays during each twelve (12) months of employment.
e. BENEFITS. During the employment term, Hod 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 Hod. The Corporation and
DSPC shall provide Hod with Director and Officer Insurance, if reasonably
available to the Corporation and DSPC, and all of its officers and directors.
Hod shall in no event receive less insurance coverage than that available to any
other employee. The Corporation shall, at a minimum, keep in full force and
effect its indemnification agreement previously entered into with Hod. Hod
shall be allowed a monthly allowance for apartment rental expense of One
Thousand Seven Hundred and Fifty Dollars ($1,750), so long as his residence
outside of Israel is required by the Corporation and DSPC.
4. EXPENSES. The Corporation shall reimburse Hod 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. As a condition of reimbursement, Hod 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. The
Corporation shall also reimburse Hod for all professional membership dues
incurred, if any; all technical books purchased by Hod; and all moving and
relocation expenses, incurred by Hod at the Corporation's or DSPC's request.
5. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES. Hod 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. Hod 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, Hod
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shall be allowed to invest as a shareholder in publicly traded companies, or
through a venture capital firm or an investment pool.
For purposes of this Section 5, the term "Corporation" shall also mean DSPC
or any of its subsidiaries.
6. 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
Hod 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 Hod's employment is terminated, for whatever reason, Hod agrees not
to copy, make known, disclose or use, any of the Corporation's Property without
the Corporation's prior written consent which shall not be unreasonably
withheld. In such event, Hod 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. Hod
agrees upon termination of employment to deliver to the Corporation all
confidential papers, documents, records, lists and notes (whether prepared by
Hod or others) comprising or containing the Corporation's Property. Hod
recognizes that violation of covenants and agreements contained in this
Section 6 may result in irreparable injury to the Corporation which would not be
fully compensable by way of money damages.
c. COVENANT NOT TO COMPETE. For a period of one (1) year from the
date of any termination of Hod's employment with the Corporation, provided that
he has sold substantially all of his stock in the Corporation, Hod shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, Director, or in any other
individual or representative capacity, engage or participate in any activities
within the State of California, which are the same as, or competitive with, the
activities in which the Corporation is presently engaged.
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d. CORPORATION DEFINED. For purposes of this Section 6, the term
"Corporation" shall also mean DSPC and any of its subsidiaries.
7. TERMINATION.
a. GENERAL. The Corporation may terminate this Agreement without
cause, by written notice. Hod may voluntarily terminate his employment
hereunder upon ninety (90) days' advance written notice to the Corporation.
b. TERMINATION FOR CAUSE. The Corporation may immediately terminate
Hod's employment at any time for cause. Termination for cause shall be
effective from the receipt of written notice thereof to Hod specifying the
grounds for termination and all relevant facts. Cause shall be deemed to
include: (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 Hod's death. In addition, if any disability or
incapacity of Hod 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 Hod's employment upon
written notice. Payment of salary to Hod during any sick leave shall only be to
the extent that Hod has accrued sick leave or vacation days. Hod shall accrue
sick leave at the same rate generally available to the Corporation's employees.
d. SEVERANCE PAY. If this Agreement is terminated by the
Corporation without cause pursuant to Section 7.a (above), the Corporation
shall pay Hod a severance/consulting fee equal to his monthly salary at his then
current rate of fixed salary compensation, multiplied by the number of full
months left until December 31, 2000, during which time Hod shall remain as a
consultant to the Corporation. The Corporation shall pay Hod 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 7.b (i) (above) or if Hod or the Corporation elects not to
renew this Agreement. The Corporation shall pay Hod a severance fee equal to
his monthly salary at his then-current rate
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of fixed salary compensation, multiplied by the lesser of the number twelve
(12) or the number of months left in the original term of this Agreement as
set forth herein plus six (6), if Hod voluntarily elects to terminate his
employment, unless the Corporation successfully claims that a termination in
accordance with Sections 7.b(ii) and (iii) is in order. There shall be no
severance in the event that this Agreement is terminated in accordance with
Section 7.b (ii) and (iii).
8. CORPORATE OPPORTUNITIES.
a. DUTY TO NOTIFY. In the event that Hod, during the employment
term, shall become aware of any material and significant business opportunity
related to the Corporation's or DSPC's business, Hod shall promptly notify the
Corporation's Directors of such opportunity. Hod 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. Hod'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 Hod fails to notify the
Corporation of, or so appropriates, any such opportunity without the express
written consent of the Board of Directors, Hod shall be deemed to have violated
the provisions of this Section notwithstanding the following:
i. The capacity in which Hod shall have acquired such
opportunity; or
ii. The probable success in the Corporation's hands of such
opportunity.
9. 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
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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.
c. PERSONAL SERVICES. It is understood that the services to be
performed by Hod hereunder are personal in nature and the obligations to perform
such services and the conditions and covenants of this Agreement cannot be
assigned by Hod. 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.
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Employment Agreement as of the date first written above.
DSP TELECOM, INC.,
a California corporation
20300 Stevens Creek Blvd, 4th Floor
Cupertino, California 95014
By: /S/ GERALD DOGON /S/ NATHAN HOD
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GERALD DOGON, Chief NATHAN HOD
Financial Officer 501 Forrest Avenue
Palo Alto, California
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