EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of June, 1997 by and
between DSP Semiconductors, Ltd., of Givat Shmuel, a company existing under
the laws of the State of Israel (hereinafter the "Company"), and Igal Kohavi
of 7 Simtat Hagderot, Savyon, Israel (hereinafter "Kohavi"), effective as of
the 1st day of June, 1997, (the "Effective Date").
RECITAL
The Company agreed to employ Kohavi as Chairman of the Board, in the
framework of which Kohavi shall serve as Chairman of the Board of its US
parent company, DSP Group, Inc. and Kohavi agrees to such employment, on the
terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT DUTIES
1.1. KOHAVI DUTIES
1.1.1. Kohavi shall perform the responsibilities of the Chairman
of the Board of the Company, as well as those as Chairman
of the Board of its US parent company, DSP Group, Inc.,
and any responsibilities incidental thereto, all such, as
stated, to be commensurate with his background, education,
experience and professional standing. It is acknowledged
that Kohavi will continue to have some certain outside
activities, but those activities should not consume more
than 10% of his traditional working time.
1.1.2. Kohavi acknowledges that his employment with the Company
will require frequent travel spanning extended periods
outside Israel. Furthermore, Kohavi agrees to extensive
world-wide travel under his employment with the Company.
1.1.3. Kohavi understands and acknowledges that as his position
is a senior managerial position in substance, as defined
in the Work and Rest Hours Law, 1951, and requires a high
level of trust, the provisions of said law shall not apply
to Kohavi and Kohavi 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.
1.1.4. Kohai agrees and undertakes throughout the Employment Term
not to receive any payment, compensation or any other
benefit from any third party directly or indirectly
related to his employment hereunder or to the Company or
its parent company, DSP Group, Inc.
1.1.5. Kohavi 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 its parent
1
company, DSP Group, Inc. or which may place him in a
position of conflict of interest with the objectives of
the Company or its parent company, as the case may be. In
addition, Kohavi agrees and undertakes to promptly inform
the Company and its parent company, DSP Group, Inc., of
any such matter which may place him in such a situation of
potential conflict of interest.
2. TERM
This Employment Agreement commenced as of the Effective Date and shall
continue indefinitely, unless sooner terminated under the terms of this
Agreement. As used herein, the term "Employment Term" refers to the
entire period of employment of Kohavi under this Agreement, beginning
June 1, 1997.
3. COMPENSATION
Kohavi shall be compensated as follows:
3.1. FIXED SALARY
3.1.1. Kohavi shall receive a fixed monthly Gross Salary of NIS
69,295 (the "Gross Salary"), payable on a monthly basis.
The Gross Salary shall be adjusted monthly to the Consumer
Price Index (the "Index"). The Gross Salary shall be
adjusted to the monthly increase of the last published
Index, in comparison to the last published Index Known at
the time of execution of this Agreement.
3.1.2. It is hereby agreed by the parties that the Gross Salary
adjustments according to the Index, shall be deemed to
include any adjustments for Cost of Living Increase
("Tosefet Yoker") that apply to Kohavi as an employee,
unless such adjustment to the Cost of Living Increase
shall be higher than the adjustment to the last published
Index in any given month, in which case the Index
adjustments shall be in respect of the Tosefet Yoker alone.
3.2. BONUS
During the Employment Term, Kohavi shall be entitled to receive an
annual bonus, at the sole discretion of the Board of Directors.
3.3. VACATION
Kohavi shall accrued paid vacation at the rate of 26 business days
for each twelve (12) months of employment. Kohavi may not
accumulate his vacation days for more than thirty-six (36) months
of employment.
2
3.4. SICK LEAVE
Kohavi shall accrue sick leave at the rate of up to 30 days for
each twelve (12) months of employment and subject to Kohavi
producing medical certificates as shall be required by the
Company. Such sick days may be accumulated to up to 180 days, but
Kohavi shall not be entitled to receive any remuneration in
respect of any such days that are not actually used. Any payment
received by Kohavi from the Manager's Insurance under disability
payments shall be set off from the Gross Salary, and Kohavi hereby
irrevocably waive any claim or demand in relation to such
deduction including any claim or demand or suit that such
deduction has worsened in any way his terms of employment.
3.5. BENEFITS
3.5.1. During the term of Kohavi employment, Kohavi shall be
entitled to Manager's Insurance (Bituach Minhalim) 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) 2.5% of the Gross Salary in
respect of disability. An additional 5% of the Gross
Salary shall be deducted by the Company from the monthly
payment of Kohavi Salary as Kohavi contribution to said
Manager's Insurance.
3.5.2. The Manager's Insurance policy provided for Kohavi benefit
of shall be registered in Company's name. The
contributions to the Manager's Insurance Policy shall be
paid by the Company in lieu of any other legal obligation
to make payments or account of severance or pension in
respect of Kohavi employment during the Employment Term.
Should the provisions made for severance pay not cover the
amount owed by the Company to Kohavi by law, then the
Company shall pay Kohavi the difference, all in accordance
with Israeli law. Kohavi agreement to the last two
sentences shall exempt the Company from the requirement to
apply to the Minister of Labor and Welfare for an approval
under Section 14 of the Severance Pay Law; however, should
such application be deemed necessary, Kohavi signature
hereupon shall be deemed his consent to the Company's
application in Kohavi name in such matter.
3.5.3. The sums accumulated in the Manager's Insurance policy
shall be transferred to Kohavi upon termination of his
employment hereunder, unless Kohavi has committed an act
in breach of Kohavi's fiduciary duty towards the Company
or its parent company, DSP Group, Inc.
3.5.4. The Company shall provide and pay Kohavi Recreation Funds
(Dmai Havra'ah) at the rate required by law and
regulations.
3
3.5.5. The Company shall contribute to a Continuing Education
Fund Chosen by it for the benefit of Kohavi in an amount
equal to 7.5% of his Gross Salary per month subject to
Kohavi's contribution of an additional 2.5% of his Gross
Salary per month.
3.5.6. The Company shall provide Kohavi with a car similar to
which he is driving today for use in connection with his
employment and for personal reasonable use. The Company
shall bear all expenses due to use and maintenance of the
car, in the same fashion as is customary with the Company.
3.5.7. The Company shall provide Kohavi with a telephone in his
private residence solely for use in connection with his
employment with the Company, and shall bear the expense of
the telephone bills, subject to timely presentation of
such bill by Kohavi to the Company.
4. EXPENSES
The Company shall reimburse Kohavi 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. As a
condition of reimbursement, Kohavi agrees to provide the Company with
copies of all available invoices and receipts, and otherwise account to
the Company in sufficient detail to allow the Company to claim and
income tax deduction for such paid item, if item is deductible.
Reimbursement shall be made on a monthly, or more frequent, basis.
5. COVENANT NOT TO COMPETE
Kohavi agrees that during the Employment Term as Chairman of the Board
of the Company, 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 business plan. Kohavi 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 and any future Company's business
during the term of employment, including projects under consideration by
the Company at the time of termination during the term of his
employment, or in the event of a termination of employment for any
reason whatsoever for a period of two (2) years thereafter.
For the purposes of this section 5, the term "Company" shall also mean
any subsidiaries, any other affiliates or its parent company.
4
6. CONFIDENTIALITY AND TRADE SECRETS
6.1. 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, and
shall during the Employment Term continue to develop, compile and
acquire said items (all hereinafter collectively referred to as
the "Company's Property"). It is expected that Kohavi will gain
knowledge of and utilize the Company's 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's Property.
6.2. COMPANY'S PROPERTY
It is hereby stipulated and agreed that the Company's 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 termination hereof by the Company),
that Kohavi shall be bound by the Confidential Disclosure and
Non-Use Agreement appended hereto as APPENDIX A.
In the event that Kohavi's employment is terminated, for whatever
reason, Kohavi agrees not to copy, make known, disclosure or use,
any of the Company's Property. Without derogating from the
Company's rights under the law of torts, Kohavi further agrees not
to endeavor or attempt in any way to interfere with or induce a
breach of any prior contractual relationship that the Company may
have with any employee, customer, contractor, supplier,
representative, or distributor for a period of two (2) years from
the date of any termination of Kohavi's employment with the
Company for any reason whatsoever. Kohavi agrees, upon termination
of employment, to deliver to the Company all confidential papers,
documents, records, lists and notes (whether prepared by Kohavi or
others) comprising or containing the Company's Property, without
retaining any copies thereof, and any other property of the
Company.
It is hereby agreed that a breach of sections 5 and 6 including
Appendix A hereto shall be considered as a material breach of this
Agreement
For the purposes of this section 6, the term "Company" shall also
mean any subsidiaries, any other affiliates or its parent company.
5
7. TERMINATION
7.1. GENERAL
Either party may terminate this agreement, without cause, upon six
(6) months' advance written notice to the other party.
7.2. TERMINATION FOR CAUSE
The Company may immediately terminate Kohavi's employment at any
time for Cause. Termination for Cause shall be effective from the
receipt of written notice thereof to Kohavi. "Cause" shall be
deemed to include: (i) material neglect of his duties or a
material violation of any of the provisions of this Agreement,
which continues after written notice and a reasonable opportunity
(not to exceed seven (7) days) in which to cure; (ii) conviction
of any felonious offense; (iii) intentionally imparting
confidential information relating to the Company or its business
to third parties, other than in the course of carrying out his
duties hereunder. The Company'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.
8. CORPORATE OPPORTUNITIES
In the event that during the Employment Term, any business opportunity
related to the Company's business shall come to Kohavi's knowledge,
Kohavi shall promptly notify the Company's Board of Directors of such
opportunity. Kohavi shall not appropriate for himself or for any other
person other that the Company, any such opportunity, except the express
written consent of the Board of Directors, in advance. Kohavi'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. MISCELLANEOUS
9.1. 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. 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.
9.2. 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
6
breach of any provision hereof be taken to be a waiver of any
subsequent breach of the same provision or any other provision.
9.3. PERSONAL SERVICES
It is understood that the services to be preformed by Kohavi
hereunder are personal in nature and the obligations to perform
such services and the conditions and covenants of this Agreement
cannot be assigned by Kohavi. 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 Company.
9.4. 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.
9.5. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State of Israel.
9.6. 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 three (3) 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 o the other party hereto of such change in
the manner above provided.
9.7. MERGER, TRANSFER OF ASSETS, OR DISSOLUTION OF THE COMPANY
This Agreement shall not be terminated by any dissolution of the
Company resulting from either merger or consolidation in which the
Company is not the consolidated or surviving Company or a transfer
of all or substantially all of the assets of the Company. In such
even, the rights, benefits and obligations herein shall
automatically be assigned to the surviving or resulting company or
to the transferee of the assets.
7
9.8. NO CONFLICTING AGREEMENTS
Kohavi 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.
DSP Semiconductors Ltd.
By: /s/ ELI AYALON /s/ IGAL KOHAVI
----------------------------------- -----------------------------------
Eli Ayalon Igal Kohavi
Title: President and CEO Israeli I.D. No. 06195705
8