Exhibit 4.2
Employment Agreement
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Between I.I.S. Inteligent Information Systems Ltd., (reg. No. 52-003504-9)
Haifa, Israel (the "Company")
And Mr. Danny Shavit (I.D. No. 53486619), 50 Nachal Sorek Street, Modi'in,
Israel (the "Employee")
1. Employment Agreement
1.1 The parties confirm that as of 23 November 2000 (the "Effective Date"),
the Employee is a full-time employee of the Company, under the terms
herein, in a senior position.
1.2 The Employee agrees to dedicate his full time, experience, talent,
expertise and knowledge to the Company, and to fulfill his job in the
Company in a loyal and dedicated manner, and in accordance with the policy
and instructions of his superiors in the Company.
1.3 During the period of this Agreement, the Employee may not engage in any
other commercial activity, except for the Company.
To avoid doubts, the Employee may hold shares in companies that are not in
competition with the Company, and may participate in meetings of such
companies in his free time, provided that his dedication to the Company
will not be effected.
1.4 The Employee is not allowed to obligate and/or bind the Company in any way
and/or create any commitments, except as expressly authorized.
1.5 All reasonable Procedures and Directives of the Company applicable to
subjects of work behavior, discipline etc., will be considered an integral
part of this Agreement.
1.6 This Agreement forms the complete and exclusive agreement between the
parties as to its subject matter; and it cancels any prior verbal or
written agreement related thereto. Any change to this Agreement requires a
duly signed document.
1.7 Failure or delay of either party to require the performance of any term
under this Agreement, or the waiver by either party of any breach under
this Agreement, shall not prevent subsequent enforcement of such terms,
nor be deemed a waiver of any subsequent or prolonged breach.
2. Remuneration
2.1 Salary: the Employee's gross salary will be NIS 27,000 per month.
2.2 Overtime Global Payment: the parties confirm that the Employee's job will
require overtime work and work at irregular hours, without the need to
approve and record each such hour. In consideration thereof, the Company
will pay the Employee a gross sum of NIS 7,000 per month.
2.3 Taxes, social security payments, social benefits and other obligatory
payments which are to be borne by the Employee according to applicable
laws and regulations - will be deducted from all the above payments.
2.4 Vacation: the Employee is entitled to 23 days per a full calendar year, at
times to be mutually acceptable.
2.5 Car: the Company will provide a Company/lease car of the same standard as
applicable to other employees of the Company at the same level as that of
the Employee. The Company will cover all expenses of the car, except costs
and expenses related to traffic violations and gross negligence of the
Employee. Tax on the value of this benefit (as prescribed by the income
tax regulations) will be paid by the Employee. The Employee will behave in
such way as to preserve the good condition of the car. At the Employee's
option the Company will pay to the Employee the sum of NIS 1,800 per month
instead of the above car arrangement. All taxes related to this benefit
will be borne by the Employee.
2.6 Pension Plan - Bituach Menahalim: the Company will take over and continue
the existing Bituach Menahalim policy of the Employee. The Company will
pay into this plan 13.33% of the salary and the overtime global payment
each month, and the Employee will pay into this plan 5% of his salary and
the overtime global payment. The foregoing will be in lieu of the
Company's obligations under the Severance Payment Law (Pizuyei Piturin).
To avoid any doubts, the parties hereby declare, confirm and agree that
the continuation of the above policy does not mean and will not be
interpreted as if the employment hereunder is a continuation of the
Employee's previous employment. The Company is not liable for any payment
or other obligation towards the Employee by virtue of his previous
employment. Without prejudice to the generality of the foregoing, the
Company shall not be liable for severance pay (Pizueyei Piturim) with
regard to the period prior to the Effective Date.
2.7 Keren Hishtalmut - the Company will pay into a mutually defined fund 7.5%
of the salary and the overtime global payment each month, and the Employee
will pay into this fund 2.5% of his salary and the overtime global payment
up to the "ceiling" as determined by the tax authorities.
2.8 Sick Leave: the Employee is entitled to payment for up to 30 sick days per
year, which may accumulate up to 90 days. There shall be no cash payment
for non-used sick days.
2.9 Expenses: the Employee will be reimbursed for out of pocket expenditures
related to his work, in accordance with reasonable procedures which shall
be similar to those applicable to other employees of the Company at the
same level as that of the Employee.
2.10 As an additional incentive for the Employee to accept employment with the
Company, the Company shall issue in favor of the Employee 100,000 shares
of its common stock. The Company will issue three share certificates for
the above shares - the first certificate for 30,000 shares, the second for
35,000 shares and the third for 35,000 shares, and will deposit these
certificates in the hands of Advocate Itzhak Lev (the "Trustee"). The
Trustee will release and deliver to the Employee the first certificate 12
months after the Closing, the second certificate 24
months after the Closing and the third certificate 36 months after the
Closing; always provided that until the release date of each certificate
the Employee has not resigned from his work and was not fired for Cause
(for the purpose of this section, a "Cause" means any of the following: a
material breach of this Employment Agreement or of the fiduciary
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obligations of the Employee, unauthorized disclosure or use of the
Company's intellectual property, a continuous refusal to carry out
legitimate work assignments, self dealing, embezzlement or
misappropriation of Company's property by the Employee, serious damage to
the Company's property which is intentionally caused by the Employee).
Furthermore, the Trustee will not release any certificate as long as there
is (if there is) an outstanding claim by any third party with regard to
the Assets that were sold and assigned to the Company under its agreement
with Eastek Embedded Systems (MEITAV) Ltd. If on the release date of any
certificate there exists any of the above reasons for non-release of the
certificate, such certificate will be returned to the Company, and the
number of shares covered by such certificate will be deducted from the
total number of the incentive shares specified in this section 2.10 above.
The Employee hereby agrees and confirms that the issue and release of the
incentive shares hereby, shall not create any liability on the part of the
Company for social or other payments, rights and benefits. Any taxes or
other compulsory payments which may become due as a result of the issue
and/or release of the incentive shares, shall be payable by the Employee;
and the Employee hereby confirms that the Company is entitled to deduct
the sums of such taxes and compulsory payments from any sum which the
Company may owe the Employee.
2.11 In addition to the shares as per section 2.10 above, the Company may
enroll the Employee in its incentive Stock Option Plan, and may grant to
the Employees options to purchase shares of the Company, under such terms
as will be specified by that plan and in quantity and price as will be
determined by the Company. The issue and exercise of the Options and the
issue of shares thereby, shall not entail or create any liability on the
part of the Company for social or other payments, rights and benefits.
2.12 The amount and details of the Employee's salary and other benefits are
confidential. This information may not be disclosed to other employees or
to people who are not authorized by the Company.
3. Secrecy and Non-Compete Provisions
3.1 Any invention, technology, system, product, component, software,
copyright, process and the like related to the business of the Company
(collectively referred to as "Knowhow"), whether patentable or patented or
not and whether subject to any other legal protection or not, arising out
of the Employee's or others' work for the Company, shall be the exclusive
property of the Company. The Employee will promptly submit to the Company
full details related to Knowhow; and will
execute patent applications and assignments as may be requested by the
Company (whether during or after the employment period) to confirm and
register the Company's ownership thereof.
3.2 Any and all information related to trade secrets, commercial relations,
actual and potential clients and suppliers, technology and products, and
any other information of a proprietary or confidential nature; which
relate to the Company and/or to third parties with whom the Company has
business relations; will hereinafter be together referred to as
"Information". Information may include commercial, technical, marketing,
financial, administrative and management subjects. The Information and any
part thereof are and shall be the exclusive property of the Company or
such aforementioned third parties. The Employee will not use any part of
the Information, nor disclose or make it available to others, unless in
the line of his job in the Company. The foregoing provisions will survive
the termination of this Agreement. However, these provisions shall not
apply to Information which is in the public domain, nor to general
professional knowhow of the Employee which was acquired by him prior to
his work for the Company. Upon termination of the employment hereunder,
the Employee shall immediately return to the Company all materials of any
kind (whether in written or electronic form, computer files or otherwise)
concerning the Information, including all copies thereof, and he shall not
retain any copies of such materials.
3.3 Without prejudice to the generality of the foregoing, the Employee agrees
that during the period of this Agreement plus a "freeze period" (as
defined below) after the termination - for any reason - of the Employee's
employment; he will not, directly or indirectly, for his own account or
for the account of others (including without limitation as a stockholder,
director, officer, investor, partner, employee, sole proprietor,
independent contractor or cusultant), do or participate or assist or allow
to do any of the following:
a) engage in any business in competition with the business of the
Company;
b) request or advise any past, present or future business associate of
the Company to decrease or cancel their business with the Company;
c) cause any employee of the Company to terminate his employment with
the Company or to work for the Employee or for any party associated
with him.
The "freeze period" shall be equal in length to the employment period
hereunder, but not shorter than 6 months nor longer than 24 months.
3.4 The Employee shall not use or dislocate any property or documents of the
Company, except in the line of his duties for the Company.
3.5 The Employee acknowledges and agrees that a breach of any material
provision of this chapter 3 will cause the Company substantial and
irreparable harm. The Employee consents and agrees therefore, in such
event, in addition to any other remedies available to the Company, to have
an
injunction, temporary restraining order, preliminary injunction and
permanent injunction issued by any arbitrator or competent court, as the
case may be, restraining and enjoining the Employee from breaching or
violating this Agreement. The Employee agrees that, in connection with any
remedy sought pursuant to this section, it shall not be necessary to
provide any guarantee or any other security by the Company.
3.6 The Employee confirms that he does not bring and was not required to bring
to the Company any proprietary materials of third parties, except
information regarding certain third parties (suppliers, clients etc.)
which may be used by the Company in its business. The Employee further
confirms that he is under no restrictions relevant to the fulfillment of
his job in the Company, whether by virtue of former employment, business
dealings or otherwise.
4. Period of Employment
4.1 This Agreement is made for an un-defined period, subject to the right of
each party, at any time, to terminate it by giving a 60 days written
notice. Notwithstanding the above, the Company may terminate the
employment immediately at any time after giving notice, provided it pays
the Employee a sum equal to the salary for the remaining notice period.
4.2 Each party may terminate the Agreement immediately in any of the following
cases: (a) a material breach of this Agreement or breach of confidence or
loyalty by the other party, (b) medical or mental incapacity of the
Employee, (c) gross negligence or misconduct which cause a significant
damage or cost to the Company, (d) criminal behavior.
4.3 Upon termination of the employment hereunder for reasons other than those
specified in paragraph 4.2 above, and provided that the Employee transfers
to the person replacing him all matters related to his job in an orderly
and satisfactory manner, the Company shall release to the Employee's name
the right to all sums which have been accumulated for his benefit in the
Pension Plan and Keren Hishtalmut mentioned in paragraphs 2.6 and 2.7
above (including employer's contributions). Such sums are on account of
severance compensation (Pizuyei Piturim) - if due.
4.4 Except as provided in paragraph 4.3 above and except as may be provided in
a later duly executed written agreement, and subject to the provisions of
all applicable cogent laws, termination of this Agreement is without
liability of the Company for any claims or payments beyond those earned or
accrued in the course of the employment hereunder; and the Employee hereby
waives any and all such claims towards the Company, its parent company and
any other third party.
And in Witness, the parties sign and execute this Agreement, on this 30th day of
November 2000.
___________________ ___________________
The Company The Employee