EXHIBIT 10.1
EMPLOYMENT AGREEMENT
--------------------
This Agreement is signed this 1 day of January, 2003
By and Between
SAFE MAIL DEVELOPMENT LTD.
a company duly incorporated under
the laws of the State of Israel
(the "COMPANY")
and
▇▇▇▇▇▇ ▇▇▇▇, I.D. No. __________
(the "EMPLOYEE")
WHEREAS, the Company wishes to retain the Employee as
its CEO; and
WHEREAS, the Company and the Employee agreed to set
forth in writing the terms and conditions of
their understandings regarding the
employment;
NOW, THEREFORE, with the foregoing recitals being an
essential part hereof, and in consideration
of the respective agreements of the parties,
it is agreed as follows:
1. INTERPRETATIONS
1.1. The preamble and all exhibits hereto form an integral part of this
Agreement.
1.2. Headings are included for convenience only, and shall not affect the
interpretation of this Agreement.
2. ENGAGEMENT The Company hereby agrees to engage the Employee, and the Employee
hereby agrees to be engaged by the Company as Chief Executive Officer. In such
position, Employee shall have the customary powers, responsibilities and
authorities of officers in such positions of corporations of the size, type and
nature of the Company including being generally responsible for the day-to-day
operations of Employer's business. Employee shall perform such duties and
exercise such powers commensurate with his positions and responsibilities as
shall be determined from time to time by the Board of Directors of the Company
(the "Board") and shall report directly to the Board. Neither Employee's title
nor any of his functions nor the manner in which he shall report shall be
adversely changed, diminished or otherwise adversely affected in any material
manner during the term of Employees employment with the Company without his
prior written consent. In addition, during Employee's employment hereunder,
Employee shall serve as Chairman of the Board of the Company and of Vsus
Technologies Inc. and CEO of Vsus Technologies Inc.
2.1. The Employee shall use his best endeavors to further the prosperity,
reputation and business interests of the Company and shall well and faithfully
serve the Company to the best of his ability.
2.2. The Employee hereby undertakes not to engage during the term of his
employment with the Company in any work not within the scope of his employment
with the Company pursuant to this Agreement, without obtaining the written
consent of the Company.
3. TERM This Agreement shall commence on January 1, 2003 and shall continue
until terminated according to Section 5 hereof, provided, however, that the term
of employment will not end before December 31, 2007.
4. REMUNERATION
4.1. Employee during the period of his employment hereunder shall be such salary
and other benefits as may be agreed upon in writing between the Company and the
Employee from time to time. Provided however, that the initial remuneration
package attached hereto as Annexure 4.2 shall not be decreased during the term
of Employee's employment hereunder. Employee shall be entitled to such further
increases, if any, in his remuneration as may be determined from time to time in
the sole discretion of the Board.
4.2. The initial remuneration package shall be as specified in Annexure 4.2,
incorporated into this Agreement as an essential part hereof.
4.3. Employee shall be eligible to receive bonuses at such times and in such
amounts as the Board shall determine in its sole and absolute discretion on the
basis of the performance of the Employee; provided that Employee shall
participate in all bonus plans available to executive officers generally at a
level commensurate with his position.
4.4. The Employee shall be entitled each year to a vacation (annual leave) of 30
working days. The Employee shall be entitled to accumulate annual vacation from
year to year, in whole or in part, up to an accumulated vacation of sixty (60)
working days, or as otherwise expressly approved in writing by the Company.
4.5. The Employee shall be entitled to up to 30 days full paid sick leave per
calendar year.
4.6. The Company shall provide Employee with a managers insurance policy. The
Company will pay as a premium for a manager's insurance policy for the Employee
an amount equal to
(a) 8.33% of each monthly base salary as severance pay;
(b) 5% of each monthly base salary for pension benefits; and
(c) 2.3% of each monthly base salary for disability insurance
(Shalva).
2
(d) The Company will deduct 5% of the Employee's base salary each month
and shall apply such deduction towards the Employee's contributions to the above
Managers insurance policy.
Upon termination of the Employee's employment with the Company for any reason,
the Company shall assign to the Employee all rights, title and interest to the
Manager's Insurance Policy.
4.7. The Company shall contribute to an education fund an amount equal to 7.5%
of each monthly base salary of the Employee. The Company will deduct 2.5% of the
Employee's base salary each month and shall apply such deduction as the
Employee's contribution to such education fund.
4.8. The Company shall furnish for the use of the Employee a motorcar. The
Company will bear all expenses incidental and necessary for registration,
insurance, running (including gas), maintenance and repair of the motorcar. The
motorcar may be purchased or leased by the Company at its sole discretion.
4.9. The Company shall furnish for the use of Employee a cellular telephone, and
the Company shall bear all the expenses for using such telephone. The Company
shall also pay Employee's home Internet bills as they come due.
4.10. The Employee shall be entitled to reimbursement for all reasonable
expenses incurred or paid by the Employee for promoting the business of the
Company, including expenses for travel, meals, telephone calls and lodging, and
similar items. Employee shall provide all vouchers, receipts and documents as
may be required from time to time. The Company shall bear all expenses relating
to tax payments or any other fees due for payment by the Employee, with respect
to the above described reimbursement of expenses that were paid by the Employee.
4.11. The Employee shall be entitled to a "thirteenth salary" and "Demai
Ha'avrah".
5. TERMINATION BY COMPANY
5.1. Employee's employment hereunder may be terminated by the Company for cause.
For purposes of this Agreement, "cause" shall mean (i) Employee's failure to
substantially perform duties hereunder consistent with the terms hereof within
15 business days following Employee's receipt of written notice of such failure
(which notice shall have been authorized by the Board of Directors and shall set
forth in reasonable detail the purported failure to perform and the specific
steps to cure such failure, which shall be consistent with the terms hereof),
(ii) misappropriation of Company funds or willful misconduct which results in
material damage to the Company, (iii) Employee's conviction of, or plea of nolo
contendere to, any crime constituting a felony under the laws of the State of
Israel, or any crime constituting a misdemeanor under any such law involving
moral turpitude or (iv) Employee's material breach of any of the material
provisions of this Agreement, which breach Employee has failed to cure within 30
business days after receipt of written notice by Employee of such breach. Any
termination of Employee's employment pursuant to this Section 5.1 shall be made
by delivery to Employee of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Board at an actual meeting
of the Board called and held for that purpose (after 30 days prior written
notice to Employee and a reasonable opportunity for Employee to be heard before
the Board prior to such
3
vote) finding that in the good faith judgment of the Board, Employee was guilty
of conduct set forth in any of clauses (i) through (iv) above and specifying the
particulars thereof.
5.2. Employee's employment hereunder shall terminate upon his death or if
Employee becomes physically or mentally incapacitated and is therefore unable
(or will, as a result thereof, be unable) to perform his duties for a period of
six (6) consecutive months or for an aggregate of twelve (12) months in any
twenty-four (24) consecutive month period (such incapacity is hereinafter
referred to as "Disability"). If the Company terminates Employee's employment
under the terms of this Agreement and Employee does not receive disability
insurance payments under the terms hereof in an amount at least equal to the
then effective Employee's base salary pursuant to a policy maintained and paid
for by the Company, the Company shall be responsible to continue to pay
Employee's base salary during the then remaining term of this Agreement to the
extent required to bring Employee's annual compensation (together with
disability payments) up to the amount equal to Employee's base salary
immediately prior to the termination for disability. Any question as to the
existence of the Disability of Employee as to which Employee and the Company
cannot agree shall be determined in writing by a qualified independent physician
mutually acceptable to Employee and the Company.
5.3. Upon termination of Employee's employment hereunder as a result of death,
Employee's estate or named beneficiary(ies) shall receive from the Company (x)
employee's base salary at the rate in effect at the time of Employee's death
through the end of the month in which his death occurs and a pro rata bonus
payment with respect to that portion of the year lapsed prior to his death based
on the bonus paid to Employee for the current year, and (y) the proceeds of any
life insurance policy maintained for his benefit by the Company pursuant to this
Agreement (or the plans and policies of the Company generally).
5.4. All other benefits, if any, due Employee following Employee's termination
of employment pursuant to this Section 5 shall be determined in accordance with
the plans, policies and practices of the Company and shall be at least equal to
those received by most senior executives and no senior executive shall receive
any fringe benefit that Employee does not receive.
5.5. If Employee's employment is terminated by the Company without cause (other
than by reason of Disability or death) or Employee resigns for Good Reason then
Employee shall be entitled to a lump sum cash payment from the Company, payable
within 10 days after such termination of employment, in an amount equal to two
(2) times the Employee's annual base salary (as in effect as of the date of such
termination) and immediately prior year's bonus. All other benefits, if any, due
Employee following Employee's termination of employment pursuant to this Section
5.6 shall be determined in accordance with the plans, policies and practices of
the Company and shall be at least equal to those received by the most senior
executives.
For purposes of this Agreement "Good Reason" shall mean:
(a) Any material breach by the Company of this Agreement; or
(b) The failure of the Board of Directors to elect the Employee as
an officer of the Company with the positions set forth in Section 2 hereof
during the Term, unless
4
Employee provides prior written consent; provided that the foregoing events
shall not be deemed to constitute Good Reason unless Employee shall have
notified the Board in writing of the occurrence of such event(s) and the Board
shall have failed to have cured or remedied such event(s) within 30 business
days of its receipt of such written notice.
5.6. Upon termination of the employment, the Employee shall return to the
Company all books, records, documents, tools, equipment, automobiles, keys,
business cards and any other articles belonging to the Company and such other
work-related writings as the Company deems reasonable to receive back from the
Employee.
6. CONFIDENTIAL INFORMATION; INVENTIONS; NONCOMPETITION.
6.2.1. In consideration of the Company's agreements hereunder, and in further
consideration of the benefits accruing to the Employee hereunder, the Employee
hereby agrees that he shall not, directly or indirectly, disclose or use at any
time, either during or subsequent to his employment with the Company, any trade
secrets or other confidential information, whether patentable or not, of the
Company, its parent or its affiliates now or hereafter existing, including but
not limited to, any
6.2.1.1. processes, formulas, trade secrets, innovations, inventions,
discoveries, improvements, research or development and test results,
specifications, data and know-how;
6.2.1.2. marketing plans, business plans, strategies, forecasts, unpublished
financial information, budgets, projections, product plans and pricing;
6.2.1.3. personnel information, including organizational structure, salary, and
qualifications of employees;
6.2.1.4. customer and supplier information, including identities, product sales
and purchase history or forecasts and agreements; and
6.2.1.5. any other information which is not known to the public,
(collectively, "Confidential Information"), of which the Employee is or becomes
informed or aware during the Employment Period, whether or not developed by the
Employee, except
6.2.1.6. as may be reasonably required for the Employee to perform the
Employee's employment duties with the Company;
6.2.1.7. to the extent such information becomes generally available to the
public through no wrongful act of the Employee;
6.2.1.8. information which has been disclosed without restriction as a result of
a subpoena or other legal process, after the Company has had the opportunity to
request a suitable protective order for such information; or
6.2.1.9. with the Company's prior written authorization.
6.2.2. This covenant shall survive the termination of the Employee's employment
hereunder, and shall remain in effect and be enforceable against the Employee
for so
5
long as any such Confidential Information retains economic value, whether actual
or potential, from not being generally known to other persons who can obtain
economic value from its disclosure or use.
6.2.3. The Employee agrees to execute such further agreements and/or
confirmations of the Employee's obligations to the Company concerning
non-disclosure of Confidential Information as the Company may reasonably require
from time to time.
6.2.4. Upon termination of the Employee's engagement at any time, the Employee
shall promptly deliver to the Company all physical and electronic copies and
other embodiments of Confidential Information and all memoranda, notes,
notebooks, records, reports, manuals, drawings, blueprints and any other
documents or things belonging to the Company, and all copies thereof, in all
cases, which are in the possession or under the control of the Employee.
6.3. INVENTIONS AND DISCOVERIES
6.3.1. The Employee hereby assigns to the Company or its designated affiliates
all of the Employee's rights, title and interest in and to all inventions,
copyrightable works, Confidential Information, discoveries, processes, designs,
works of authorship and other intellectual property and all improvements on
existing inventions, discoveries, processes, designs, works and other
intellectual property made or discovered by the Employee during his employment
with the Company (collectively, "Inventions").
6.3.2. Promptly upon the development, making, creation, or discovery of any
invention, discovery, process, design, work, intellectual property or
improvement, the Employee shall disclose the name to the Company and shall
execute and deliver to the Company such reasonable documents as the Company may
request to confirm the assignment of the Employee's rights therein, and if
requested by the Company, shall assist the Company, and shall execute any
necessary documents, at the Company's expense, in applying for and prosecuting
any patents and any trademark or copyright registration which may be available
in respect thereof.
6.3.3. Notwithstanding the foregoing, the Company hereby notifies the Employee
that the provisions of this 0 shall not apply to any Inventions developed by the
Employee and which are not related to the business of the Company or to actual
research or development of the Company.
6.3.4. The Employee further agrees that the wages provided for the Employee's
services shall be his sole compensation for the assignment to the Company of all
rights to Inventions and other rights granted to the Company under this
Agreement.
6.3.5. In case any Invention is described in a patent application or is
disclosed to third parties by the Employee within one (1) year after termination
of the Employee's employment hereunder and his retirement of his position in the
Company, it shall be presumed that the Invention was conceived or made during
the period of the Employee's employment for the Company, and the Invention shall
be assigned to the Company as provided by this Agreement, provided it relates to
the Employee's work with the Company.
6
6.4 NONCOMPETITION REPRESENTATIONS.
6.4.1. The Employee acknowledges that by virtue of his employment by, and
relationship with, the Company, he has and will continue to acquire Confidential
Information as well as a special knowledge of the business methods, customer
relationships and goodwill of the Company, which are all valuable, unique and
proprietary assets of the Company.
6.4.2. The Employee further acknowledges that:
6.4.2.1. in the course of his duties hereunder he will participate in a
significant manner in developing said Confidential Information or relationships
and goodwill,
6.4.2.2. activities by the Employee detrimental to said Confidential Information
or relationships and goodwill or attempts by the Employee to use or otherwise
capitalize on said Confidential Information, relationships and goodwill might
cause substantial harm and economic disadvantage to the Company and severely
reduce the value of the Company, and
6.4.2.3. the Company has legitimate protectable interests in avoiding such
detrimental actions in order to preserve its competitive position in the
industry.
6.4.3. In return for the consideration described in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and as a condition precedent and inducement to the Company
to enter into this Agreement, the Employee hereby represents, warrants, and
covenants as follows:
6.4.3.1. The Employee has executed and delivered this Agreement as his free and
voluntary act, after having determined that the provisions contained herein are
of a material benefit to him, and that the duties and obligations imposed on him
hereunder are fair and reasonable and will not prevent him from earning a
livelihood following the termination of his employment with the Company;
6.4.3.2. The Employee has read and fully understands the terms and conditions
set forth herein, has had time to reflect on and consider the benefits and
consequences of entering into this Agreement, and has had the opportunity to
review the terms hereof with an attorney or other representative, if he so
chooses;
6.4.3.3. The execution and delivery of this Agreement by the Employee do not and
the full and proper performance of his duties and obligations hereunder will not
conflict with, or result in a breach of or constitute a default under, any
agreement or contract, whether oral or written, to which the Employee may be
bound.
6.5 NONCOMPETITION COVENANT.
6.5.1. The Employee agrees that at all times during his employment with the
Company and thereafter until the first anniversary of the termination or
expiration of the Employment Period and his directorship (the "Non-competition
Period"), the Employee shall not, except on behalf of the Company, directly or
indirectly, Participate in any Competitive Business (as each of such terms is
defined below).
7
6.5.2. For purposes of this Agreement, the term:
6.5.2.1. "Participate" means to have any direct or indirect interest,
participation or involvement, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, independent contractor,
consultant, creditor, owner, stockholder or otherwise; and
6.5.2.2. "Competitive Business" means any enterprise, venture or proprietorship
engaged in the development, manufacture, sale, licensing and/or distribution of
any information, products and/or services that are the same as or substantially
similar to the information, products and/or services provided (or in development
and proposed to be provided) by any business unit or division within the Company
in which the Employee was employed in.
6.6. NON SOLICITATION OF EMPLOYEES.
6.6.1. The Employee recognizes that he will possess confidential information
about other Employees of the Company, its subsidiaries and affiliates relating
to their education, experience, skills, abilities, compensation and benefits,
and inter-personal relationships with customers of the Company, its subsidiaries
and affiliates.
6.6.2. The Employee recognizes that the information he will possess about these
other employees is not generally known, is of substantial value to the Company,
its subsidiaries and affiliates in developing their business and in securing and
retaining customers, and has been and will be acquired by him because of his
business position with the Company, its subsidiaries and affiliates.
6.6.3. The Employee agrees that, for a period of one year following termination
of his employment with the Company, he will not, directly or indirectly, solicit
or recruit any employee of the Company, its subsidiaries or affiliates for the
purpose of being employed by him or by any competitor of the Company, its
subsidiaries or affiliates on whose behalf he is acting as an agent,
representative or employee and that he will not convey any such confidential
information or trade secrets about other employees of the Company, its
subsidiaries and affiliates to any other person.
7. INDEMNIFICATION AND INSURANCE The Company undertakes to take all legally
permissible actions to indemnify and insure the Employee against liability for
breach of duty of care towards the Company or a third party, except in cases
that a court of competent jurisdiction renders a final non appealable decision
that the Employee acted in bad faith and breached his fiduciary duties to the
Company.
8. NOTICES Any notice required or permitted under this Agreement shall be given
in writing to the address set forth below each parties signature hereto. Notice
may be given (i) by registered or certified mail, postage prepaid, return
receipt requested, effective 7 days after posting, (ii) by confirmed fax,
effective on the next business day in recipient's location, or (iii) by
messenger or courier, effective upon receipt.
9. WAIVER OF BREACH The failure or waiver of any party to execute, in any
respect, any right provided for by this Agreement shall not be deemed a waiver
of any further or future right hereunder.
8
10. ASSIGNMENT The Employee acknowledges that the services rendered by him are
unique and personal. Accordingly, the Employee may not assign any of his rights
or delegate any of his duties or obligations under this Agreement. The rights
and obligations of the Company under this Agreement shall be passed on to, and
shall be binding upon, the successors or assigns of the Company. The term
"successors and assigns" as used herein shall mean a corporation or other entity
acquiring all or substantially all of the assets and business of the Company
whether by operation of law or otherwise.
11. GOVERNING LAW This Agreement shall be governed by and construed in
accordance with the laws of the State of Israel.
12. SEVERABILITY The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
13. ILLEGALITY If any term of this Agreement is held to be illegal or contrary
to public policy or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision and shall not in any way
affect or render invalid or unenforceable any other provision of this Agreement.
14. ENTIRE AGREEMENT This Agreement contains the entire understanding of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the day and year first above written.
THE COMPANY THE EMPLOYEE
SAFE MAIL DEVELOPMENT LTD. ▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------- -----------------------------------
Title: Address:
------------------------------- ---------------------------
-----------------------------------
Address:
----------------------------- -----------------------------------
Tel:
------------------------------------- -------------------------------
Fax:
------------------------------------- -------------------------------
Tel:
---------------------------------
Fax:
---------------------------------
9
THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES TO ALL OF ITS OBLIGATIONS UNDER
THIS AGREEMENT AND HEREBY GUARANTEES ALL OF THE OBLIGATIONS OF THE COMPANY UNDER
SUCH AGREEMENT.
VSUS TECHNOLOGIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title:
------------------------------
Address:
----------------------------
------------------------------------
------------------------------------
Tel:
--------------------------------
Fax:
--------------------------------
10
ANNEXURE 4.2 - REMUNERATION
---------------------------
1. SALARY
1.1. The Company shall pay to the Employee a base salary (the "base salary") of
the NIS equivalent (as determined by the Representative Rate of the US Dollar as
published by the Bank of Israel on the first day of each month) of US$7,500 per
month, payable on the second day of each month during the term of this
Agreement. This base salary will be increased by 10% annually.
1.2. The Employee's salary will be subject to withholding taxes and other
deductions at source, including the Employee's share of any social benefit
requirements as may be required by law.
1.3. The Company shall pay all of the Employee's salary and benefits during the
Employee's mandatory reserve military service. The Employee shall provide the
Company with authorization from the army regarding reserve service in order to
allow the Company to claim amounts due it from the National Insurance Institute.