EXHIBIT 10.29
EMPLOYMENT AGREEMENT
OF JOSEPH PERL
WITH
DSP TELECOM, INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
effective as of this 22nd day of July, 1998, by and between DSP TELECOM, INC., a
California corporation (hereinafter the "Corporation"), and JOSEPH PERL
(hereinafter "Perl").
RECITAL
A. The Corporation hereby agrees to employ Perl, and Perl hereby agrees
to accept employment with the Corporation, on the terms and conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT DUTIES.
a. CORPORATION'S DUTIES. The Corporation shall allow Perl to, and
Perl shall, perform responsibilities normally incident to his position as Chief
Executive Officer of both the Corporation and DSP Communications, Inc. ("DSPC"),
commensurate with his background, education, experience and professional
standing. The Corporation shall provide Perl 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 Cupertino, California. Perl agrees that he may be
reassigned by the Board of Directors to another executive position within the
Corporation in Cupertino, California, with a direct reporting relationship to
the Chairman of the Board of the Corporation, provided that Perl's salary,
benefits, and bonuses are not reduced.
b. PERL'S DUTIES. Unless otherwise agreed to by the parties, Perl
shall serve as the Chief Executive Officer of both the Corporation and DSPC.
Perl 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. Perl shall
report directly to the Corporation's Board of Directors and the Chairman of the
Board. Perl, 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 August 31, 2001, unless
(a) extended as set forth herein, or (b) terminated sooner under the terms of
this Agreement. Thereafter, this Agreement may be renewed by Perl and the Board
of Directors of the 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 Perl hereunder, including any agreed-to
extension(s).
3. COMPENSATION. Perl shall be compensated as follows:
a. FIXED SALARY. Perl shall receive a fixed annual salary of Two
Hundred Twenty-five Thousand Dollars ($225,000). The Corporation agrees to
review the fixed salary following the end of each twelve (12) month period
during the employment term based upon Perl'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. Perl's fixed salary shall be payable on a semi-monthly
basis.
c. BONUS COMPENSATION. During the employment term, Perl shall
participate in each bonus plan adopted by the Corporation's Board of Directors.
Commencing in 1998, Perl shall be entitled to receive an annual bonus equal to
(i) twenty-five percent (25%) of his annual base salary should the Corporation
meet eighty percent (80%) of its plan as presented to the Board in January of
each year, during the term of Perl's employment ("Yearly Plan"); (ii) fifty
percent (50%) of his annual base salary should the Corporation meet its Yearly
Plan; and (iii) one hundred percent (100%) of his annual base salary should the
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%). For purposes of this Section, the meeting of the Yearly
Plan 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
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. Perl shall accrue paid vacation at the rate of
twenty-two (22) working days for each twelve (12) months of employment. Perl
shall be compensated at his usual rate of compensation during any such vacation.
Perl shall be entitled to ten (10) paid holidays during each twelve (12) months
of employment.
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e. BENEFITS. During the employment term, Perl 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 Perl. The Corporation and
DSPC shall provide Perl with Director and Officer Insurance, if reasonably
available to the Corporation and DSPC, and all of its officers and directors.
Perl shall in no event receive less insurance coverage than that available to
any other employee. Additionally, the Corporation shall loan to Perl One
Million Dollars ($1,000,000) on an interest-free basis to be used to purchase a
home in the Cupertino area since Perl is relocating from Israel. The loan shall
be repaid at the first to occur of Perl's employment termination (unless he
remains on as a consultant, in which event the occurrence of the termination of
the consultant arrangement shall be the triggering event) with the Corporation,
or the sale of the home. If, however, Perl's employment is terminated by reason
of his death, the loan will be extended for six (6) months after his death. The
loan will be evidenced by a note secured by a second deed of trust on the home,
junior in interest only to a loan on the home that enables Perl to complete the
purchase of the home. To the extent that the sales price of the home (less
applicable real estate brokerage commissions) is less than the purchase price,
the Corporation agrees to allow a reduction of the principal amount of the
interest-free loan equal to the difference between the purchase price of the
home and the sales price (less applicable real estate brokerage commissions);
provided that the Corporation is given the option of purchasing the home at the
proposed sale price and/or has agreed to the sales price. For purposes of this
Section, "purchase price" refers to the amount paid by Perl for his home, and
"sales price" refers to the price paid by a subsequent buyer of the Perl home.
4. EXPENSES. The Corporation shall reimburse Perl for expenses as
follows:
a. BUSINESS. For Perl's 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, and for all
expenses incurred at the Corporation's or DSPC's request. As a condition of
reimbursement, Perl 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.
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b. PROFESSIONAL DUES. The Corporation shall also reimburse Perl for
all professional membership dues incurred, if any; all technical books purchased
by Perl.
c. RELOCATION EXPENSES. The Corporation agrees to reimburse Perl
for all reasonable expenses incurred for moving Perl and his family from Israel
to California, as approved by the Chairman of the Board. The Corporation also
agrees to reimburse Perl for the cost of a forty (40) foot container to ship
household belongings from California to Israel, and other reasonable expenses
incurred to relocate Perl and his family back to Israel at the conclusion of
Perl's employment with the Corporation.
d. INTERIM HOUSING. The Corporation agrees to reimburse Perl and
his family up to Five Thousand Dollars ($5,000) per month, for costs associated
with interim housing, in the event that Perl is unable to purchase a home in
Cupertino area, California.
e. TRAVEL TO ISRAEL. For each six (6) months of Perl's employment
with the Corporation, Perl and his spouse will be entitled to travel once to
Israel by business class, and Perl's children once by economy class, at the
Corporation's expense.
5. CONFIDENTIALITY AND COMPETITIVE ACTIVITIES. Perl 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. Perl 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, Perl 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 method,
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
Perl will gain knowledge of and utilize the Corporation's Property during the
course and scope of
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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 Perl's employment is terminated, for whatever reason, Perl 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, Perl 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. Perl
agrees upon termination of employment to deliver to the Corporation all
confidential papers, documents, records, lists and notes (whether prepared by
Perl or others) comprising or containing the Corporation's Property. Perl
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 Perl's employment with the Corporation, provided that
he has sold substantially all of his stock in the Corporation, Perl 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 directly competitive
with, the activities in which the Corporation is presently engaged.
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 Perl's employment under
this Agreement without cause, upon ninety (90) days' advance written notice to
Perl. Perl 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
Perl's employment at any time for cause. Termination for cause shall be
effective from the receipt of written notice thereof to Perl specifying the
grounds for termination and all relevant facts. Cause shall be deemed to
include clearly proven: (i) material neglect of his duties or a
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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 Perl's death. In addition, if any disability or
incapacity of Perl 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 Perl's employment upon
written notice. Payment of salary to Perl during any sick leave shall only be
to the extent that Perl has accrued sick leave or vacation days. Perl 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 Perl a severance fee equal to his monthly salary at his then current
rate of fixed salary compensation, multiplied by the number of full months left
until the end of the term stated herein, during which time Perl shall remain as
an employee of the Corporation in a non-policy making role, devoting substantive
productive time, and his options in DSPC shall continue to vest for the period
of continuous employment. The above severance fee shall be payable in
accordance with the Corporation's normal payroll practices. The Corporation
shall pay Perl 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 Perl or the
Corporation elects not to renew this Agreement. The Corporation shall pay Perl
a severance fee equal to his monthly salary at his then-current rate 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 Perl voluntarily elects to terminate his employment, unless the
Corporation successfully claims that a termination in accordance with Sections
7.b(ii) or (iii) is in order. There shall be no severance in the event that
this Agreement is terminated in accordance with Section 7.b (ii) or (iii).
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8. CORPORATE OPPORTUNITIES.
a. DUTY TO NOTIFY. In the event that Perl, during the employment
term, shall become aware of any material and significant business opportunity
related to the Corporation's or DSPC's business, Perl shall promptly notify the
Corporation's Directors of such opportunity. Perl 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. Perl'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 Perl fails to notify the
Corporation of, or so appropriates, any such opportunity without the express
written consent of the Board of Directors, Perl shall be deemed to have violated
the provisions of this Section, notwithstanding the following:
i. The capacity in which Perl 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, specifically excluding stock option agreements, the terms of which
shall not change by the mere fact that Perl is employed by the Corporation and
not the Israeli affiliate of the Corporation. 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 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.
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c. PERSONAL SERVICES. It is understood that the services to be
performed by Perl hereunder are personal in nature and the obligations to
perform such services and the conditions and covenants of this Agreement cannot
be assigned by Perl. 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 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/ Stephen P. Pezzola /s/ Joseph Perl
----------------------- ----------------
STEPHEN P. PEZZOLA, JOSEPH PERL
Secretary ----------------
----------------
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