Exhibit 10.8
Employment Agreement dated as of June 4, 1999,
by and between Xxx Xxxxxxx and the Registrant.
O T I
PERSONAL EMPLOYMENT AGREEMENT
Signed and executed in Rosh Xxxx, as of the 4 day of June 2000
Between: On Track Innovations Ltd. (Reg. No. 52-004286-2)
a public company registered in Israel
of Z.H.R. I.Z., Rosh Xxxx 12000
(the "Company")
of the one part
And: Xxx Xxxxxxx (ID No. 000000000)
of 8 Xxxx, Holon 58834,
(the "Employee")
on the other part
2
O T I
Whereas the Employee wish to be employed by the Company as a C.F.O
(hereinafter referred to as the "Position") and the Company wishes to
employ him in the said Position, subject to the terms and conditions
set forth below in this Agreement; and
Whereas the Employee warrants that he has the qualifications and skills
required for the purposes of performing the Position and that there is
no hindrance - legal contractual or otherwise - for the execution by
him of this Agreement.
NOW. THEREFORE. THE PARTIES HAVE AGREED AS FOLLOWS:
1. Nature of the Agreement - General and Applicability
This agreement exhaustively prescribes the terms, conditions and
provisions applicable to the Employee's employment with the Company and
accordingly no collective or special agreements shall apply to the
employment relations between the Employee and the Company.
2. The Employee's Duties
2.1. The Employee shall be employed by the Company in the position of C.F.O.
By virtue of the Position, the Employee shall be responsible for the
day to day and routine management of the Finance of the Company. The
Employee shall be responsible for developing the Company's business
ability, and subject to the approval of the Company's chief executive
officer, to locate and develop new spheres of activity for the Company
within the scope of his position and to make the systems with which he
is charged efficient.
In the performance of the Position, the Employee shall be subject
to the Company's President and Chief Executive Officer (the
"Officer In Charge") and subject to the policies prescribed from
time to time by the Company's board of directors.
2.2. For avoidance of doubt, it is warranted and agreed that, without
derogating from the provisions of this Agreement, in the event that any
position whatsoever is imposed upon the Employee which involves
engagement with a subsidiary of the Company and/or other companies
forming or which shall form part of the Company's group (collectively
the "Related Companies"), such position shall not create
employer-employee relations between him and any of the Related
Companies and that notwithstanding any such position, the Employee
shall be considered solely as the Company's employee.
3. The Employee's Undertakings
The Employee hereby undertakes:
3
O T I
3.1 To perform the duties and assignments imposed upon him in the scope of
his employment with the Company with devotion, honesty and fidelity,
subject to the Company's policy in existence time to time, and subject
to the provisions and instructions given to him from time to time by
the Officer In Charge, and to dedicate to the performance of the said
duties all his know-how, qualifications and experience and all the
time, diligence and attention required for the performance thereof
efficiently, with fidelity and in accordance with the requirements of
this Agreement, and to use his best endeavors in order to advance the
affairs and business of the Company and the realization of its
objectives.
3.2. Not to engage, during the Term of the Agreement (as defined in Section
4.1), in any engagement not within the scope of his employment with the
Company pursuant to this Agreement, other than with the Officer in
Charge's prior written consent, provided however, that such consent
shall not be required for voluntary, cultural, sportive or lecturing
activities or for holding of securities of any company other than
companies which are in competition with the Company and in which the
Employee holds more than 1%.
3.3 To maintain confidential and not to disclose, reveal or convey to any
person or entity, during the term of this agreement or thereafter,
commercial or other secrets of the Company and/or its related
companies, including but without derogating from the generality of the
above, details of their business, the products manufactured by them,
their customers or their commercial and business secrets, and all save
for information which the Employee has been expressly required by the
Company to reveal within the scope of performing the Position,
information which has come into the public domain or information which
must, according to law, be disclosed (but upon condition precedent that
in such event the Company is given written notice thereof a reasonable
time in advance), and the Employee further undertakes not to make any
use of any of the said information of the Company or its related
companies that is not for the purpose of advancing their business.
4 The Term of the Agreement
4.1. This agreement is for a term of 5 (five) years and commencing on June
4, 2000. This term shall be automatically extended (without
limitation), all subject to the following provisions:
4.1.1 Subject to the provisions of Section 4.1.2 below, the Company shall be
entitled to terminate this agreement for reasonable or justifiable
cause upon three (3) months' prior written notice being delivered to
the Employee (hereinafter "the Prior Notice Period"). If the Company
delivers the said unwritten notice to the Employee, the Employee shall,
subject to the provisions of Section 4.1.2 below, continue in his
position and to perform his undertakings pursuant to this agreement
4
O T I
during the prior notice period, and, at the Company's request, he
shall act to the best of his ability to transfer his position in
an efficient and orderly manner to his successor.
4.1.2 Notwithstanding the provisions of Section 4.1.1 above, it is hereby
warranted and agreed that the Company shall be entitled at any time in
its discretion, to demand that the Employee terminate his Position
forthwith (or within a period shorter than the Prior Notice Period) and
in such event the employer-employee relations between the Company and
the Employee shall terminate on the date of delivery of the said
demand, all without derogating from the Employee's rights pursuant to
this agreement and at law to payment in lieu of prior notice in respect
of the Prior Notice Period to severance pay and to all other amounts
due to him (if any) in connection with his employment and the
termination of his employment with the Company (and the period in
respect of which employer-employee relations actually existed between
the Company and the Employee pursuant to the above provisions is
hereinafter referred to as "the Term of the Agreement").
4.1.3. The Employee shall be entitled to terminate this Agreement by giving
the Company a ninety (90) days prior notice to that effect. If the
Employee shall continue in his position and to perform his undertakings
pursuant to this Agreement during the Prior Notice Period, and at the
Company's request, he shall act to the best of his ability to transfer
his position in an efficient and orderly manner to his successor.
4.2 Should this agreement come to an end pursuant to the above provisions
of this Section 4, the provisions of Section 10 below shall apply with
regard to the amount due to the Employee in respect of his employment
with the Company and the termination thereof.
3 Notwithstanding the above provisions of this Section 4, the first six
(6) months period of the Employee's employment under this Agreement
shall be considered a trial period (the "Trial Period"). During the
Trial Period, the Company shall be entitled to terminate the Employee's
employment, at any time, and for any reason, by giving only a 30
(thirty) days prior notice (or payment for such period) to that effect.
5 Monthly Salary
5.1 In consideration for the Employee's employment and the performance of
his other undertakings to the Company pursuant to this Agreement, the
Company shall pay the Employee, by no later than the 9th of each month
in respect of the preceding month, a monthly salary (gross) of NIS in
an amount equal to US$ 4,100 for the first six month of employment, and
after the first six month of employment a monthly salary (gross) of NIS
in an amount equal to US$ 5,100 a. the determining representative rate,
as defined below (hereinafter referred to as "the Salary"). In addition
to the Salary, the Employee shall be paid a monthly amount of NIS in an
amount equal to US$ 900, at the determining representative rate, as
defined below in consideration of the Employees undertaking as set in
Section 12 below not to compete with the Company (the "Non Competition
Payment") (and the Salary and the Non Competition Payment shall be
collectively referred to hereinafter as the "Monthly Salary").
5
O T I
For the purposes of this clause, the expression "Representative
Rate" shall mean the representative rate of the US dollar as
published by the Bank of Israel; and the expression "the
Determining Representative Rate" shall mean - in respect of each
year, the average representative rate during such year as
estimated by the Company at the commencement of the year, provided
that if the average representative rate during the whole of such
year (as is ascertained immediately after the end of the year) is
higher or lower than the said estimated average rate by a
percentage in excess of 5%, then the Determining Representative
Rate for payment of the Monthly Salary in respect of such year
shall be deemed the annual average rate as aforesaid and all
differentials between the Monthly Salary amounts actually paid to
the Employee and the amounts that should have been paid to him
according to the said average rate shall be added or deducted, as
the case may be, from the Monthly Salary payable to the Employee
in respect of the month of December of such year.
5.2. By no later than December 1st of each year, the Company's board of
directors shall determine the Employee's salary for the following year,
which shall not be less than in the preceding year.
6. Bonus
6.1. The Company, pursuant to a resolution of its compensation committee, in
its absolute discretion, is entitled to give the Employee, in
accordance with targets to be determined by no later than December 31
of each calendar year ("Year") in respect of the next Year by the
compensation committee of the Board, a monetary annual bonus (the
"Bonus"). In determining such Bonus, the compensation committee shall
relate to the Company's revenues, and/or the Company's profits, as
applicable to the Employee.
6.2. The Bonus for each Year shall be paid to the Employee within 30 days
from the publication of the audited annual financial statements of the
Company of such Year.
6.3. When feasible in light of the Company's cash flow and provided it is
justifiable in light of the Company's results as manifested in the
quarterly financial statements of the Company, the Company may make
allowances to the Employee, pursuant to a resolution of the Board, on
account of earned Bonuses, which allowances shall be deducted from the
Yearly computed amount of Bonus payable to the Employee in respect of
the Year in which such allowances were made (the "Allowances").
6
O T I
7. Car and Additional expenses
During the term of the Agreement the Company shall place at the
Employee's exclusive disposal a car for his use and shall provide
him with lunch meals at the Company's premises. All the expenses
in connection with the maintenance and use of the said car shall
be borne and paid by the Company, excluding fines. The Employee
hereby undertakes to use the car that shall be placed at his
disposal as aforesaid reasonably and properly qua an owner who
cares for his property, and in the absence of another arrangement
in writing between him and the Company he undertakes to return the
said car to the Company immediately upon the termination of the
Prior Notice Period (as defined in Section 4.1.1).
For avoidance of doubt, the company shall gross up the value of
the benefit to the Employee in placing the car at his disposal and
providing him with meals as aforesaid in the amount of the tax
applicable to him in respect of the said benefits.
8. Annual Leave, Sick Leave. Convalescence Pay. Military Reserve Service
8.1. The Employee shall be entitled to payment of 22 (twenty two) annual
leave days in respect of each year of employment pursuant to this Agreement.
8.2 The annual leave days to which the Employee is entitled are accruable
and redeemable - but provided always that the Employee shall not be entitled to
accrue in any working year seven of the annual leave days to which he is
entitled and in total the Employee shall not be able to accrue more than 30 days
for the purposes of redemption and 30 days for the purposes of taking actual
leave.
The exact periods of such annual leave shall be coordinated with
the Company's Officer In Charge and the Company's administrative
of officers.
8.3. The Employee is entitled to sick leave and sick pay at the rates and
times prescribed by law. Sick leave shall not be redeemable. The
Employee shall be entitled to accrue up to 90 (ninety) days for the
purpose of taking actual sick leave. The Employee shall be entitled to
convalescence pay at the rates and times prescribed by law.
8.4. During the period of military reserve the Employee shall be entitled to
receive his full Monthly Salary and the other benefits payable to him
pursuant to this Agreement. The Employee shall remit to the Company
every amount that shall be paid to him for his service as aforesaid
from the National Insurance ("Hebrew text").
9. Executives' Insurance and Vocational Studies Fund
9.1. The Company shall continue the Employee's existing executive Insurance
policy in the Employee's name. Each month during the Term of the
Agreement the Company shall transfer and pay to the executive insurance
policy the following amounts:
7
O T I
9 1.I An amount. equal to 8 1/3 (eight and one third percent) of the
Monthly Salary: on account of the severance pay fund.
9.1.2. An amount equal to 5% (five percent) of the Monthly Salary on account
of provident fund
9.1.3. An amount of up to 2.5% (two and a half percent) of the Monthly Salary
on account of loss of working capacity insurance.
Furthermore, the Company shall deduct from the Monthly Salary an
amount equal to 5% (five percent) which shall be remitted to the
said executive insurance fund, such being on account of the
provident fund and in respect of the Employee's part of the
provision to the said fund
9.2 It is hereby agreed that the above arrangement regarding the executive
insurance policy, is made in accordance with the general permit
relating to employer's payments to pension funds and insurance funds,
instead of severance payment under Section 10 of the Severance Pay Law
5723-1963 (the "Severance Pay Law") and thus, save in the event of
termination pursuant to Section 10.1.2 below, and save if the Employee
has drown funds from the executive insurance policy not due to a
Qualifying Event (as defined in GN 4575 - 5758), and subject to the
provisions of Section 10.1.1.2 below, the Company waives any and all
rights for return of the amounts paid by it to the executive insurance
policy and such payments shall be deemed as being in lieu of severance
pay as specified in the Severance Pay Law (GN 2787-5742, 993; GN 2847-
5742, 2939; GN 4575-5758)
9.3. The Company shall attend to making a vocational studies fund in the
Employee's name and shall make a provision each month to the said
vocational studies fund of an amount equal to 7.5% (seven and a half
percent) of the Monthly Salary. Furthermore, an amount equal to 2.5%
(two and a half percent) of the Monthly Salary shall be deducted from
the Monthly Salary, such being in respect of the Employee's part of the
provision to the vocational studies fund.
10. Termination
10 In the event of termination of this Agreement, the following provisions
shall apply:
10.1.1. Should the termination of the employment be as a result of dismissal
(other than dismissal in circumstances depriving the Employee of the
right to severance pay as provided in Section 10.1.2 below), the
Employee's resignation or, heaven forbid, as a result of circumstances
preventing the continuation of his employment with the Company
(including his death) the Employee shall be entitled (or, as the case
may be his heirs shall be entitled):
8
O T I
00.0.0.0.xx receive the Monthly Salary from the Company for the Prior Notice
Period, such being whether the Employee was requested to continue
working during the Prior Notice Period or otherwise; and
00.0.0.0.xx receive from the executives' insurance fund and the vocational
studies fund all the amounts which have accrued to his benefit in such
funds, whether from his own provisions or from provisions of the
Company and/or the Related Companies, including all linkage
differentials, interest and profits that have accrued in the said fund
in respect of the said provisions. However, transfers of amounts which
have been accrued to the employee's benefit in such funds from
provisions of the Company and/or the Related Companies shall be subject
to the condition that the Employee has acted to the best of his ability
to transfer his position in an efficient and orderly manner to his
successor.
10.1.2 It is hereby agreed and warranted that in the event that the Employee's
dismissal is as a result of a breach of fidelity or material breach of
his confidentiality or non competition undertakings to the Company
pursuant to Section 11 below and Annex A hereto, or other dismissal in
circumstances depriving, according to any law, the Employee of the
right to severance pay, then, notwithstanding anything to the contrary
provided in this Agreement, the Employee shall not be entitled to
receive prior notice of his dismissal or payment in lieu of prior
notice and he shall not be entitled to severance pay or any other
payment which the Company is not legally bound to pay, including any
payment due to the Employee as a Bonus payment or any payment in
respect of the Adjustment Period. In such event, the Employee shall be
obliged to reimburse Allowances, which were granted to the Employee
pursuant to Section 6.3 above in the last Year of the Employee's
employment with the Company, and subject to applicable law, the Company
shall be entitled to set off the amounts of such Allowances from any
payments due to the Employee from the Company.
11. Confidentiality and Non-Competition
The Employee has signed a confidentiality and non-competition undertaking
towards the Company which is attached as Annex A hereto, and forms an integral
part of this Agreement.
12 Further Provisions
The Employee hereby warrants that he is aware and agrees that:
9
O T I
12.1. In the scope of his Position with the Company pursuant to this
Agreement, he is not an employee to whom the Hours of Work and Rest
Law, 5711-1951 applies, and he shall not be entitled to claim or
receive any payments or increments whatsoever for working overtime or
on Sabbaths and festivals, and the monthly salary payable to him as
aforesaid also includes full compensation for working overtime and on
Sabbaths and festivals.
12.2. The amount of the Monthly Salary payable to him as specified in Section
5 above, and it alone, shall be the basis for the provisions and
deductions in respect of the social benefits specified in this
agreement; and all the bonuses, contributions to expenses and other
benefits granted to him or which shall be given to him (if at all)
pursuant to this Agreement or in connection with his employment by the
Company do not constitute a component of his Monthly Salary and shall
not be taken into account in respect of the provisions or other
benefits whatsoever granted to the Employee pursuant to this Agreement
which are computed on the basis of his Monthly Salary; and the
expression the "Monthly Salary" wherever it appears in this agreement
refers to the Monthly Salary as defined in Section 5 above, without any
increments whatsoever.
12.3. The payments and benefits of whatsoever description granted to the
Employee pursuant to this Agreement are subject to the deduction of
income tax and other compulsory deductions which the Company has to
deduct according to any law, and nothing stated in this Agreement shall
be interpreted as imposing upon the Company the burden of paying tax or
any other compulsory payment for which the Employee is liable, other
than the value of the benefit of placing the car at the Employee's
disposal and providing the Employee with meals, which shall be grossed
up by the Company as provided in Section 7 above.
12.4. Except in relation to the grant of options to the Employee by the
Company, the terms and conditions of the Employee's employment by the
Company are regulated solely pursuant to this personal employment
agreement between him and the Company and save as expressly provided in
this Agreement the Employee shall not be entitled to any payments or
other benefits in respect of his employment and the termination of his
employment with the Company.
13. Amendments to the Agreement
An amendment to this agreement shall not be valid unless made in a written
document duly signed by the parties hereto.
14. Addresses
The parties' addresses for the purposes of this agreement shall be as specified
in the heading hereto and any notice, document or court process sent by one
party to the other according to the above addresses shall be deemed to have
reached its destination: if delivered by hand - at the time of delivery, and if
dispatched by registered post - after 72 hours have elapsed from the time of
dispatch as aforesaid. For purposes of this Section,
10
O T I
delivered by hand to the Company shall mean delivery to the hands of the CEO
Chairman of the Board or his substitute in person.
IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS:
/s/ On Track Innovations Ltd. /s/ Xxx Xxxxxxx
----------------------------- --------------------
On Track Innovations Ltd. Employee