Exhibit 10a
CONTRACT OF EMPLOYMENT
Made and signed in Tel Aviv and New York this 28th day of May 1997
BETWEEN: 1) AMPAL (ISRAEL) LTD. - P.C.
of 111 Arlozorov street, Tel-Aviv 62098 ISRAEL
(hereinafter referred to as "Ampal Israel" or "the Company")
2) AMPAL - AMERICAN ISRAEL CORPORATION
a company registered in New York, USA
of 1177 Avenue of the Americas, New York, New York 10036, USA
(hereinafter referred to as "Ampal USA")
of the one part;
AND: MR. YEHOSHUA GLEITMAN - I.D. NO. 008459828 of Tabenkin 33,
Tel-Aviv, ISRAEL (hereinafter referred to as "the Employee")
of the other part.
WHEREAS: Ampal Israel is a subsidiary of and fully owned and controlled
by Ampal USA;
AND WHEREAS: the Company wishes to employ the Employee as the
chief executive officer (CEO) of Ampal Israel (and/or in
another senior position therein), and, within the scope of
such position, he may also be required to operate in an
executive capacity at Ampal USA and companies related thereto,
all as specified below in this contract;
AND WHEREAS: the Employee agrees to act in the said position on
the terms and conditions specified below in this contract;
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AND WHEREAS: the provisions of any collective agreement, collective
arrangement and/or any other agreement or arrangement, save
for this contract, shall not apply to the Employee.
ACCORDINGLY, IT IS WARRANTED, PROVIDED AND AGREED BETWEEN THE
PARTIES AS FOLLOWS:
1. GENERAL
1.1 The recitals and appendices to this contract constitute an
integral part hereof and shall be read together herewith.
1.2 This contract revokes any previous understandings and/or
agreements which prescribed the terms and conditions of the
Employee's employment by the Company and his remuneration,
whether made in writing, orally or by way of the parties'
conduct. All the terms and conditions of the Employee's
employment with the Company and the companies are only as
provided in this contract (including in the allotment
agreement as defined below), and the terms and conditions of
any other arrangement whatsoever, including any collective
agreement or collective arrangement or practice whatsoever,
applicable or that shall be applicable to any of the other
companies' employees, shall not apply to the Employee.
1.3 Definitions
In this contract, the following expressions shall have the
meanings set forth alongside them:
"The companies" means Ampal Israel, Ampal USA,
any subsidiary thereof and any company
controlled directly or indirectly by Ampal
Israel or Ampal U.S.A.
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"CPI" means the consumer price index, all
states, as published annually by the
United States Department of Labor.
2. TERM OF THE CONTRACT
The Company agrees and undertakes to employ the Employee as its
chief executive officer (CEO) as specified below (and/or in another
senior position) commencing from the date of signing this contract
and until the termination hereof as provided in clause 9 below
(hereinafter referred to as "the term of the contract"), and the
Employee agrees and undertakes to perform his position during the
term of the contract and to perform all his other obligations
pursuant hereto.
3. DUTIES AND POWERS
3.1. The Employee undertakes to manage Ampal Israel and its
subsidiaries, to operate and advance their business in all
spheres and to act to the best of his ability in order to make
the companies profitable and successful. The Employee shall
dedicate all his business time and energy to the business of
the Company and the other companies, and shall invest his best
efforts to advance their affairs and business, directly and
through the executive. Without derogating from the generality
of the aforegoing, within the scope of his duties in the
companies the Employee shall manage Ampal Israel, and shall
perform certain management and executive duties for Ampal USA
and companies related thereto, and in such context he shall
engage inter alia (but not only) in the supervision and
management of existing investments, in the location,
performance and management of new investments, in the
management of personnel, in financial management and in
reporting etc.
3.2 In addition, the Employee's duties in respect of the companies
shall include, inter alia, aspects relating to serving as a
senior executive and
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being involved in the management of Ampal USA, as a public
company registered in the USA whose securities are traded in
the USA, including deliberations and decisions regarding or
effected by securities laws and laws relating to taxation in
the USA and in Israel, as well as duties relating to public
relations, the raising of capital, strategic planning and the
like, as directed from time to time by the president of the
Board of Directors or Executive Committee of Ampal U.S.A.
3.3 The Employee's powers and duties in the companies shall be in
accordance with the resolutions, instructions and guidelines
of the Company's board of directors or those boards of
directors of companies in respect of which the Employee
performs management or executive functions pursuant to this
contract, as advised to him from time to time.
3.4 The Employee undertakes to give the companies' boards of
directors and/or any of their members appropriate reports and
other information in connection with the companies' affairs or
business, on the dates and in the manner that shall be
required by the companies' boards of directors.
4. PERSONAL TRUST
4.1. The Employee undertakes to perform his duties diligently and
loyally and to use all his qualifications, knowledge and
experience for the companies' benefit. The companies undertake
that during the term of the Employee's employment, they shall
grant him appropriate employment terms and conditions as
specified in the provisions of this contract and subject
thereto.
4.2 During the term of his employment with the Company, the
Employee may not engage in any additional employment
whatsoever, for payment or otherwise, without obtaining the
prior written approval of the chairman of the Company's board
of directors.
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The Employee may also not carry on any independent business
activities during such period, whether for consideration or
otherwise, including as employee, consultant, partner, agent,
broker, manager, provider of services and/or in another manner
whatsoever (save for passive investments of not more than 5%
in companies whose shares are listed for trading on a major
stock exchange or market in Israel or the United States),
without obtaining prior written approval as aforesaid.
4.3 The Employee undertakes that throughout the term of the
contract he shall not directly or indirectly compete with the
companies and or/or their business, that he shall maintain
confidentiality in all respects relating to the business and
affairs of the companies or any other entity related thereto
and that he shall not howsoever prejudice the companies'
reputation, its customer base and/or business relationships.
The Employee further undertakes not to place himself in a
position of conflict of interests which might influence the
performance of his duties and/or obligations pursuant to this
contract, and without derogating from the aforegoing, he
undertakes not to place himself in the position of an
interested party (within the meaning thereof in the Securities
law, 5728-1968) in a business competing with any of the
companies.
4.4 For the avoidance of doubt, it is expressed that the
provisions of this clause do not derogate from any liability
and/or responsibility imposed upon the Employee at law, by
agreement and/or by custom, including the provisions of clause
10 below.
5. SALARY
5.1 In consideration for his employment with the Company and the
other companies, in consideration for all his services to them
and in
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consideration for the performance of all his obligations
pursuant hereto, the Company shall pay the Employee a gross
monthly salary in an amount in NIS equal to US$ 20,000,
adjusted annually (as of 31 December of each calendar year
beginning December 31, 1997), according to the rate of
increase in the CPI such adjustment to be made using 1996 as
the base year (hereinafter referred to as "the salary").
5.2 The salary shall be paid to the Employee once a month on the
2nd of each month in respect of the preceding calendar month
of employment.
6. COMPANY CAR
The Company shall make available to the Employee a private passenger
car of a value of up to NIS 150,000 for the Employee's personal use.
The Company shall bear all the expenses involved in the car's use
and maintenance. The value of the use of the car for income tax
purposes shall be grossed up and added to the salary, but shall not
be recorded as part of his salary for any other purpose, including
for the purpose of calculating his social rights.
7. SOCIAL RIGHTS & REIMBURSEMENT OF EXPENSES
7.1 The Employee shall be entitled to social rights based on the
salary as defined above, as follows:
(a) Pension fund - Based on the Salary, the Company and the
Employee shall allocate the customary accepted amounts
to a pension fund on behalf of the Employee, as
established by law.
The Company shall gross-up and/or bear any undeductable
expenses derived of this allocation.
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(b) Compensation fund - Based on the salary, the Company
shall allocate the customary and acceptable amounts to a
compensation fund on behalf of the Employee.
(c) Professional fund - Based on the salary the Company
shall allocate the cotomary accepted amounts to a
professional education fund on behalf of the Employee.
The Company shall gross-up and/or bear any undeductable
expenses derived of this allocation.
(d) Yearly vacation - The Employee shall be
entitled to a yearly vacation of up to 21
days a year. Any vacation time not used
during any given year or the year
succeeding it may not be carried forward
into later years, and the Employee will
not be entitled to any additional
compensation on account of unused
vacation time, except as may be required
by Law. All vacations shall be scheduled
at mutually acceptable times.
(e) the employee shall be entitled to sick
leave according to to applicable Israeli
law.
7.2 The Company shall bear the expenses which the Employee shall
be required to expend in order to perform his duties in the
companies, upon submission of proper documentation and only in
accordance with Company policies in effect from time to time.
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In addition, the Employee shall be entitled to Customary
benefits as accepted among the senior employees of the
Company.
8. PLAN FOR THE ALLOTMENT OF SHARES AND OPTIONS
At or about the time of executing this contract, the parties shall
execute an agreement for the allotment of shares and for the
allotment of options to the Employee as part of the consideration
for the performance of his duties in the companies (in addition to
his salary and ancillary conditions), subject to and in accordance
with the provisions of section 102 of the Israeli Tax Ordinance -
all as specified in the said agreement (hereinafter referred to as
"the allotment agreement").
The allotment agreement shall be deemed an integral part of his
contract and the two shall be viewed together.
Notwithstanding any other provision, including the provisions of the
allotment agreement, it is hereby agreed that from the date on which
any of the parties notifies the other of its/his wish to terminate
this contract (whether in accordance with the provisions of clause 9
below or in any other manner) or commencing from the date on which
the Employee's employment with the Company ceases, whichever is the
earlier, the Employee shall not be entitled to any shares and/or
options in addition to those already transferred to the trustee (as
defined in the allotment agreement) until such date and, without
derogating from the generality of the aforegoing, it is expressed
that upon the giving of notice as aforesaid, the Employee shall not
be entitled to the allotment of additional shares and/or options, in
respect of his activities performed for the Company during the
transition period specified in sub-clause 10.1 below.
9. TERMINATION OF THE CONTRACT
9.1 Notwithstanding the foregoing, any of the parties may
terminate this contract by giving the other prior written
notice of at least three months for
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each year (or portion thereof) of employment, up to a maximum
of nine months (hereinafter referred to as "the prior notice
period"), and in such event the terms and conditions specified
in clause 10 shall inter alia apply. For example, at any time
during the first year of employment, the prior notice period
shall be three months; during the second year of employment,
the prior notice shall be six months; and thereafter the prior
notice period shall be nine months.
9.2 Notwithstanding the provisions of sub-clause 9.1 above and in
addition thereto, the Company may terminate this contract by
giving at least two weeks' prior written notice on the
occurrence of at least one of the following incidents, and in
such event such two week period shall be deemed the prior
notice period for all intents and purposes:
9.2.1 if the Employee commits a fundamental breach of this
contract, including if he performs acts or omissions
involving gross negligence, willful misconduct, fraud or
embezzlement on his part, and he does not rectify the
breach within 15 days of the date on which he receives
written warning to do so;
9.2.2 if the Employee is convicted in a final judgment of an
offence involving moral turpitude;
9.2.3 if the Employee sustains a permanent disability (as
determined by the Company's Board of Directors), or
protracted illness (at least three months) or if his
legal capacity is limited and in consequence thereof he
is unable to continue performing his duties, or if he is
prohibited or
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prevented for any other reason from continuing to act
in his position pursuant to this contract.
9.3 In the event that one party notifies the other of its/his wish
to terminate this contract, the Company may, but is not bound,
in its exclusive discretion, require that the Employee
continue performing his duties in the companies until the end
of the term specified in sub-clause 9.1 or 9.2 above, or part
thereof.
However, it is agreed that in the event that for any reason
whatsoever the Employee is not employed in his position in the
Company during the prior notice period, he shall only be
entitled (if at all) to his salary pursuant to sub-clause 5.1
and to a company car pursuant to sub-clause 6.1 above during
the remainder of the prior notice period.
9.4 It is hereby expressed that the provisions of sub-clause 9.1
to 9.3 above do not impair the companies' rights to terminate
this contract by virtue of any law and/or to insist upon their
rights pursuant to any law, in the event that acts and/or
omissions for which the Employee is at fault, which are not
within the scope of performing his duties in the companies,
are involved.
In addition, it is expressed that use made by one party of
its/his authority pursuant to this clause, or his/its failure
to do so, do not derogate from its/his right to any other
remedy or relief available to it/him at law and/or by virtue
hereof.
9.5 In the event of termination of the Employee's employment with
the company, either by the employee himself or by the company,
the directors and officers' insurance policy which was issued
on behalf of him, shall, as far as is permissible, be
transferred to the name of the employee. However, it is agreed
that this provision shall not apply in the event of
termination of employment as set forth in articles 9.2.1,
9.2.2.
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10. HANDING OVER THE POSITION
Upon the termination of the Employee's employment with the Company,
and without excluding any obligation imposed upon him by
virtue of any agreement and/or law, the Employee hereby
undertakes to act in accordance with the following provisions:
10.1 The Employee shall hand over his position in an orderly manner
and in such context he shall give the companies or anyone
acting on their behalf all the documents, information and
material which comes into his possession and/or which is
prepared by him in connection with his employment with the
Company or with the other companies.
10.2 The Employee undertakes to maintain confidentiality in all
respects relating to the companies' business and/or affairs,
including any information or know-how which comes into his
possession during the period of his employment with the
companies.
Furthermore, the Employee undertakes not to make any use
whatsoever of the aforementioned information and/or know-how
and not to disclose and/or make any use of any of the
companies' tangible and/or intangible property, whether for
consideration or otherwise.
This undertaking shall remain valid for an unlimited period.
10.3 The Employee undertakes not to directly or indirectly compete
in Israel with the companies' business in a manner that might
prejudice the companies and/or their business, including by
providing consultancy services to, managing and/or by being an
interested party (within the meaning thereof in the Securities
Law, 5728-1968) in a business directly competing with the
companies, as aforesaid, for the following periods:
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10.3.1 if the relationship is terminated in consequence
of the Employee's resignation - for a period of two
years from the date of the relationship's
termination;
10.3.2 if the relationship is terminated in consequence of
the Employee's dismissal by the Company - for a
period of one year from the date of the
relationship's termination.
10.4 After the termination of his employment, the Employee shall
not, directly or indirectly, solicit, entice, recruit,
persuade or seek to induce any person who is or was an
employee of, or consultant to, any of the companies at the
date of termination or at any time during the period of
employment to terminate his or her employment or consultancy
with the companies, or approach any such employee or
consultant for any or the foregoing purposes, or authorize or
assist in the taking of any such actions by any third party.
11. MISCELLANEOUS
11.1 This contract is dependent an conditional upon the approval of
the board of directors of Ampal Israel and the Executive
Committee of the board of directors of Ampal USA.
11.2 This agreement (including the allotment agreement) and all
rights and obligations of the parties related to it shall be
governed by and construed in accordance with the laws of
Israel, except that all matters relating to the form and
manner of the allotment under the allotment agreement and the
issuance of shares of Ampal USA shall be governed by New York
law.
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Any dispute concerning the above-mentioned agreements, rights
and/or obligations shall be settled pay conducted in front of
an Israeli tribunal exclusively.
11.3 Notice sent by registered mail to the parties' addresses
specified in the recitals hereto or to their appointed
representatives shall be deemed to have reached its addressee
with 15 days from the date of dispatch, and if transmitted by
facsimile or delivered by hand on an ordinary business day -
at the time of transmission or delivery, and if transmitted or
delivered on a day which is not an ordinary business day - on
the first ordinary business day thereafter.
AS WITNESS THE HANDS OF THE PARTIES ON THE DATE AND
AT THE PLACE SPECIFIED ABOVE:
/s/Yehoshua Gleitman /s/Lawrence Lefkowitz /s/Raz Steinmetz
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THE EMPLOYEE AMPAL USA AMPAL ISRAEL