EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") made and entered into on this day of
March _2__, 2010 (the "Effective Date")
Between InkSure Technologies Inc, a Delaware corporation (the "Company"),
__________________________________________________ (hereinafter the "Company");
On the first part
And: Mr. Tal Gilat, ID No. 28956986 a citizen of Israel, with an address 8
▇▇▇▇▇▇ Street, Givataim (hereinafter the "Employee", and together with the
Company: the "Parties")
On the second part
WHEREAS The Company is engaged in the development, production and
marketing of (i) machine readable anti-counterfeiting and Track
and Trace & Authentication products and (i) Chipless RFID
technologies; and
WHEREAS The Company has offered that the Employee shall serve, as the
Company's President & Chief Executive Officer ("CEO"), and the
Employee agrees to be employed as such, all in accordance with
the terms and conditions of this Agreement;
WHEREAS The Employee and the Company wish to establish the terms of their
engagement with effect as of the Effective Date and onwards; and
Now, therefore, in consideration of the mutual covenants and conditions
hereinafter set forth, it is agreed by the parties as follows:
1. PREAMBLE
The Preamble to this agreement forms an integral part thereof.
2. POSITION
2.1. The Company shall employ the Employee, and the Employee hereby agrees
to and will serve as the Company's President & CEO from the Effective
Date until otherwise decided by the Company's board of directors.
2.2. During the term of Employment hereunder, the Employee agrees to devote
his total attention and time to the business and affairs of the
Company as required to discharge the responsibilities assigned to the
Employee hereunder. The Employee shall not be engaged in any other
employment nor actively engaged in any other business activities, or
in any other activities which may hinder the Employee's performance
hereunder, with or without compensation, for any other person, firm or
company without the prior written consent of the Company and shall
have all responsibilities and powers that usually apply to the
positions held by the Employee as CEO (in which period he shall also
be considered a principal executive officer for purposes of SEC
filings).
2.3. While serving as CEO, the Employee shall report to the board of
directors.
2.4. The scope of the Employee's position in the Company shall include from
time to time, at the Company's sole discretion, rendering the same
services stipulated herein, in whole or in part, also to any of the
Company's subsidiaries. For the avoidance of any doubt, the parties
hereby stipulate that rendering such services as aforesaid shall
constitute an integral part of the Employee's position in the Company
and shall not entitle the Employee with any right to additional
compensation, remuneration or fee whatsoever. It is further agreed,
that should the Employee claim for or demand from the Company or any
of its subsidiaries any compensation, remuneration or fee for services
rendered by him to any of such subsidiaries, the Company shall set-off
and reduce the Employee's remuneration under this Agreement with the
same amount claimed by the Employee from the subsidiaries.
2.5. The Employee's duties shall be in the nature of management duties that
demand a special level of loyalty and accordingly the Work Hours and
Rest Law 1951 of Israel, including any law amending or replacing such
law, shall not apply to this Agreement. The parties hereto confirm
that this is a personal services contract and that the relationship
between the parties hereto shall not be subject to any general or
special collective employment agreement or any industry custom or
practice, or practice of the Company in respect of any of its other
employees or contractors. The Employee agrees that the execution and
delivery by the Employee of this Agreement and the fulfillment of the
terms hereof (i) does not conflict with any agreement or undertaking
by which the Employee is bound; and (ii) does not require the consent
of any person or entity
3. SALARY
3.1. The Company shall pay the Employee a monthly salary of 50,000 NIS
gross (hereinafter the "Base Salary"), payable each month not later
than the seventh day of the month. The Base Salary will be paid in NIS
(New Israeli Shekel).
The Base Salary includes remuneration for working overtime and on days
of rest, and the Employee shall not be entitled to any further
remuneration or payment whatsoever other than the Base Salary and/or
benefits, unless expressly specified in this Agreement. The Employee
acknowledges that the Base Salary constitutes due consideration to the
Employee for working overtime and on days of rest
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3.2. The Employee will be entitled to targeted 2010 Management By
Objectives (MBO) gross bonus of 480,000 NIS at 100% achievement. The
MBO targets will be set by the Board of Directors no later than May
31, 2010.
For the avoidance of doubt, the bonus for the achievement of the
target will not be part of the base salary and will not be subject to
pension or any other fringe benefits.
3.3. The Employee shall be entitled to reimbursement for all expenses
incurred by him in the performance of his duties hereunder, pursuant
to the Company's prevailing policy for such reimbursements, and in the
absence of such established policy - as approved by the Company's
board of directors (or its designees), provided that in any case the
Employee shall provide the Company with all appropriate receipts and
conform with the tax regulations, if any.
3.4. The Employee and the Company both acknowledge and agree, that upon the
mutual written agreement of the Company and the Employee, the
Employee's salary may be paid by either of the subsidiaries on behalf
of the Company, but always subject to Section 2.4. The Company further
acknowledges that this section 3.4 does not affect the Company's
obligation to pay the Employee's Base Salary or benefits pursuant to
this Agreement.
4. BENEFITS
4.1. The Company shall effect a Manager's Insurance Policy in the name of
the Employee, and shall pay a sum of up to 15.83% of the Base Salary
towards such Policy, of which 8.33% will be on account of severance
pay, 5% on account of pension fund payments and up to a further 2.5%
on account of disability pension payments. The Company shall deduct 5%
from the Base Salary to be paid on behalf of the Employee towards such
Policy. The Employee may extend an existing policy or plan and
incorporate it into the Policy at his discretion provided that such
extension may not impose any incremental cost for the company.
4.2. The Company and the Employee shall maintain an advanced study fund
(Keren Hishtalmut Fund). The Company shall contribute to such fund an
amount equal to 7.5% of the Base Salary, and the Employee shall
contribute to such fund an amount equal to 2.5% of the Base Salary
provided however, that such company's contributed amounts will be
limited to the maximum amount which is tax-exempted by the employee.
The Employee hereby instructs the Company to transfer to such fund the
amount of the Employee's and the Company's contribution from each
monthly Base Salary payment.
4.3. All taxes due, if any pursuant to section 4.1 and 4.2 above shall be
borne and paid by the employee.
4.4. The Parties hereby adopt the Israeli Labor Ministry warrant from
30.6.98 and declare that the company's payment to the Bituach
Menahalim (8.33% for the severance payment) shall constitute the
company's whole obligation for severance payments according to section
14 of the severance payment law - 1963 (Israel).
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4.5. The Employee shall be entitled to a vacation leave of twenty (20)
working days per year. Up to one years' equivalent of vacation days
(20 days) may be accumulated and/or carried forward. Any vacation
accumulated in excess thereof shall expire.
4.6. COMPANY CAR. The Employee shall be entitled to a company car in
accordance with the Company's policy. It is agreed that the car will
be 2000cc or a car of a similar class. The Company will bear all of
the fixed and variable maintenance costs, including license,
insurance, gas, repairs, etc., but excluding personal traffic fines
and the like. The Employee will bear all tax consequences arising out
of the possession and use of the car ("HACHNASA ZKUFA") and shall not
be entitled to any reimbursement therefore. The Employee shall bear
all expenses, loses, damages etc. caused as a result of the breach of
his duties under the Company's and the leasing company's instructions
for use of the car, and the Company is entitled to deduct any such
amount from any amount owing to the Employee. The Car will be returned
to the Company by the Employee upon the termination of employment. The
Employee's spouse and children may be granted use of the car; no other
person, except as otherwise authorized by the Company, shall be
granted use the car. Terms of use of the Company car will be in
accordance with the Company's policies and guidelines.
4.7. The Employee shall be entitled to a complete medical checkup once a
year. Corresponding tax, if any, will be deducted at source by the
company.
4.8. The Company shall cause the Employee to be included in its directors
and officer's liability insurance, covering customary officer's
liabilities.
4.9. The Employee shall be entitled to Dmey Havra'a as provided in a
collective bargaining agreement to which the General Labor Union of
the Workers in Israel is a party regarding the payment of Dmey Havra'a
that is force and effect.
4.10. CELLULAR PHONE. The Employee shall be granted the use of a cellular
phone in accordance with the Company's internal policies and
procedures. The Company shall bear certain costs relating to the use
and maintenance of the cellular phone, excluding income tax imposed in
connection therewith. The Employee undertakes to use the cellular
phone in accordance with Company's procedures.
5. NON DISCLOSURE, COMPETITIVE ACTIVITY AND OWNERSHIP OF INVENTIONS
Simultaneously with the signing of this Agreement the Employee shall sign
the Non-Disclosure, Unfair Competition and Ownership of Inventions
undertaking in favor of the Company and any subsidiary and parent company
of the Company, attached hereto as APPENDIX A, WHICH SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
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6. TERM AND TERMINATION
6.1. The Employee may terminate this Agreement for any reason upon ninety
(90) days' prior written notice, and the Company may terminate this
Agreement for any reason upon ninety (90) days' prior written notice
(each such period being a "Prior Notice Period"), provided, however,
that the Company may terminate this Agreement for a "justifiable
cause" (as hereinafter defined) without prior notice. During the Prior
Notice Period the Employee shall be entitled to payment of the Base
Salary and all benefits pursuant to this Agreement.
In addition, any unvested options for Company's shares held by the
Employee shall continue to vest during the Prior Notice Period.
6.2. "Justifiable Cause" shall mean: (i) embezzlement of funds of the
Company, or its affiliate by the Employee; (ii) the Employee's
indictment of any crime involving moral turpitude or dishonesty; (iii)
a material breach of the Employee's fiduciary duties or duties of care
to the Company; (iv) a material breach by the Employee of the material
terms of this Agreement or of a material undertaking entered into by
the Employee to the Company with respect to this Agreement, which was
not cured within 15 days from written notice thereof; or (v) any other
act or omission that would legally entitle the Company to dismiss the
Employee without payment of severance pay in connection with such
dismissal.
6.3. During the period following notice of termination by any party for any
reason, the Employee shall cooperate with the Company and use his best
efforts to assist the integration into the Company's organization of
the person or persons who will assume the Employee's responsibilities.
At the option of the Company, the Employee shall during such period
either continue with his or her duties or remain absent from the
premises of the Company.
7. MISCELLANEOUS
7.1. This Agreement constitutes the entire understanding between the
Parties with respect to the subject matter hereof and with respect to
the period as of the Effective Date. Any prior understandings,
undertakings or representations with respect to the subject matter
hereof, written or oral, shall be of no force or effect. It is hereby
clarified that the Previous Agreements shall have no further force or
effect for the period as of the Effective Date and onwards.
7.2. This Agreement may be amended only by a document signed by both
Parties.
7.3. No rights of any Party shall be prejudiced or restricted by an
indulgence or forbearance to any party, and no waiver by any party in
respect of any breach shall operate as a waiver in respect to a
subsequent breach.
7.4. Any notice, demand, call or request under this Agreement (hereinafter
a "Communication") which a Party may desire to serve, or be required
to serve upon the other Party, shall be in writing and shall be deemed
sufficiently served if: (a) delivered by hand; or (b) if sent by
courier that guarantees delivery of such Communication within seventy
two (72) hours, addressed to the other Party's address as set forth in
the preamble to this Agreement; or (c) sent by facsimile or email with
confirmation of receipt.
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7.5. The addresses of the Parties for the purpose of this Agreement are as
set forth in the preamble to this Agreement.
IN WITNESS WHEREOF, the Parties hereunto cause this Agreement to be duly
executed.
INKSURE TECHNOLOGIES INC.
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------
By: ▇▇▇▇ ▇▇▇▇▇
Title: Chairman of the Board
/s/ Tal Gilat
-------------------------
By: Tal Gilat
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APPENDIX A
THIS UNDERTAKING ("Undertaking") is entered into as of the 2 day of March, 2010,
by Mr. Tal Gilat, ID No. 28956985 a citizen of Israel, with an address at 8
▇▇▇▇▇▇ Street, Givataim (the "Employee").
WHEREAS the Company and Employee are entering into an employment
agreement as of the date hereof;
NOW, THEREFORE, the Employee undertakes and warrants towards the Company and
any subsidiary and parent company of the Company as follows:
1. Confidential Information.
1.1. The Employee acknowledges that he has, and will have, access to
confidential and proprietary information, including information
concerning activities of the Company and any of its parent, subsidiary
and affiliated companies, and that he has, and will have, access to
technology regarding the product research and development, patents,
copyrights, customers (including customer lists), suppliers (including
suppliers lists), marketing plans, strategies, forecasts, trade
secrets, test results, formulae, processes, data, know-how,
improvements, inventions, techniques and products (actual or planned)
of the Company and any of its parent, subsidiary and affiliated
companies. Such information in any form or media, whether documentary,
written, oral or computer generated, shall be deemed to be and
referred to herein as "PROPRIETARY INFORMATION".
1.2. During the term of his employment or at any time after termination
thereof for any reason, the Employee shall not disclose to any person
or entity without the prior consent of the Company any Proprietary
Information, whether oral or in writing or in any other form, obtained
by the Employee while in the employment of the Company (including, but
not limited to, the processes and technologies utilized and to be
utilized in the Company's business, the methods and results of the
Company's research, technical or financial information, employment
terms and conditions of the Employee and other Company employees or
any other information or data relating to the business of the Company
or any information with respect to any of the Company's customers).
1.3. Proprietary Information shall be deemed to include any and all
proprietary information disclosed by or on behalf of the Company
irrespective of form, but excluding information that has become a part
of the public domain not as a result of a breach of this Undertaking
by the Employee.
1.4. The Employee agrees that all memoranda, books, notes, records
(contained on any media whatsoever), charts, formulae, specifications,
lists and other documents made, compiled, received, held or used by
the Employee while in the employment of the Company, concerning the
Company or its business (including its trade secrets) (the
"MATERIALS"), shall be the Company's sole property and all originals
or copies thereof shall be delivered by the Employee to the Company
upon termination of the Employee's employment or at any earlier or
other time at the request of the Company, without the Employee
retaining any copies thereof.
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2. UNFAIR COMPETITION AND SOLICITATION.
The Employee acknowledges that the provisions of this Undertaking are
reasonable and necessary to legitimately protect the Company's Proprietary
Information, its property (including intellectual property) and its
goodwill (the "COMPANY'S MAJOR ASSETS"). The Employee further acknowledges
that he has carefully reviewed the provisions of this Undertaking, he fully
understands the consequences thereof and he has assessed the respective
advantages and disadvantages to him of entering into this Undertaking.
In light of the above provisions, the Employee represents and undertakes:
2.1. That during the term of his employment in the Company and for a period
of twelve (12) months thereafter, he shall not engage, establish, open
or in any manner whatsoever become involved, directly or indirectly,
either as an employee, owner, partner, agent, shareholder, director,
consultant or otherwise, in any business, occupation, work or any
other activity which is reasonably likely to involve or require the
use of any of the Company's Major Assets.
2.2. That during the term of his employment in the Company and for a period
of twelve (12) months thereafter, he shall not become financially
interested or render services to any entity or business which competes
or likely to compete with the Company or its parent, subsidiary or
affiliated companies directly or indirectly.
2.3. That during the term of his employment in the Company and for twelve
(12) months thereafter, not to induce any employee, consultant,
director, officer, subcontractor of the Company or of any of its
parent, subsidiary or affiliated companies to terminate its service
therewith, and that he has not engaged in such solicitation activities
since the beginning of his employment in the Company (and any of its
parent, subsidiary and affiliated companies).
3. OWNERSHIP OF INVENTIONS.
The Employee will notify and disclose to the Company, or any persons
designated by it, all information, improvements, inventions, formulae,
processes, techniques, know-how and data, whether or not patentable, made
or conceived or reduced to practice or learned by the Employee, either
alone or jointly with others, since the beginning of his employment in the
Company (and any of its parent, subsidiary and affiliated companies) and
anytime thereafter (including after hours, on weekends or during vacation
time) (all such information, improvements, inventions, formulae, processes,
techniques, know-how, and data are hereinafter referred to as the:
"INVENTIONS" or "INVENTION") immediately upon discovery, receipt or
invention as applicable. In the event that the Employee, for any reason,
refrains from delivering the Invention upon grant of notice regarding the
Invention, as described above, the Employee shall notify the Company of the
Invention and specify in such notice the date in which the Invention shall
be delivered to the Company and the reason for delay in such delivery. The
Invention shall be delivered as soon as possible thereinafter.
Delivery of the notice and the Invention shall be in writing, supplemented
with a detailed description of the Invention and the relevant
documentation. The Employee agrees that all the Inventions shall be the
sole property of the Company, and the Company shall be the sole owner of
all patents and other rights in connection with such Inventions. The
Employee hereby assigns to the Company any rights the Employee may have or
acquire in such Inventions. In order to avoid any doubt, it is hereby
clarified that a lack of response from the Company with respect to the
notice of the Invention or of its delivery, shall not be considered a
waiver of ownership of the Invention, and in any event the Invention shall
remain the sole property of the Company.
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The Employee further agrees as to all such Inventions to assist the
Company, or any persons designated by it, in every proper way to obtain and
from time to time enforce such Inventions in any way including by way of
patents over such Inventions in any and all countries, and to that effect
the Employee will execute all documents for use in applying for and
obtaining patents over and enforcing such Inventions, as the Company may
desire, together with any assignments of such Inventions to the Company or
persons or entities designated by it.
The Employee shall not be entitled, with respect to all of the above, to
any monetary consideration or any other consideration except as explicitly
set forth in its employment agreement, or in any other written agreement or
arrangement signed by the Company. With respect to all of the above any,
oral understanding, communication or agreement not duly signed by the
Company shall be void.
4. GENERAL.
4.1. The Employee acknowledges that the provisions of this Undertaking
serve as an integral part of the terms of his employment and reflect
the reasonable requirements of the Company in order to protect its
legitimate interests with respect to the subject matter hereof. If any
provision of this Undertaking (including any sentence, clause or part
thereof) shall be adjudicated to be invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made. In addition, if any
particular provision contained in this undertaking shall for any
reason be held to be excessively broad as to duration, geographical
scope, activity or subject, it shall be construed by limiting and
reducing the scope of such provision so that the provision is
enforceable to the fullest extent compatible with applicable law.
4.2. The provisions of this Undertaking shall continue and remain in full
force and effect from the beginning of the employment of the Employee
in the Company and following the termination such employment
relationship for whatever reason. This Undertaking shall not serve in
any manner as to derogate from any of the Employee's obligations and
liabilities under any applicable law or agreement.
Tal Gilat
--------------------------
Name of Employee
/s/ Tal Gilat
--------------------------
Signature