EMPLOYMENT AGREEMENT, GIDEON WERTHEIZER

 

 

                                                                  Exhibit 10.16

 

                             EMPLOYMENT AGREEMENT

 

   THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 1st day of November,

2002, is entered into by ParthusCeva, Ltd. with its principal place of business

at 5 Shenkar Street, Herzelia, Israel 46120 (the "Company"), and Gideon

Wertheizer, residing in Israel (the "Employee").

 

   The Company desires to employ the Employee, and the Employee desires to be

employed by the Company and perform certain services for its parent,

ParthusCeva, Inc. ("Parent"). In consideration of the mutual covenants and

promises contained in this Agreement, and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged by

the parties to this Agreement, the parties agree as follows:

 

   1. Term of Employment.  The Company hereby agrees to employ the Employee,

and the Employee hereby accepts employment with the Company, upon the terms set

forth in this Agreement, for the period commencing on the date hereof and until

terminated in accordance with the provisions of Section 4 (such period, the

"Employment Period").

 

   For purposes of determining Employee's eligibility for benefits, Employee

shall be treated as if he or she had been continuously employed with employer

commencing with employee's date of hire with DSP Group.

 

   The Company reserves the right to pay the Employee's salary in lieu of any

period of notice required to be given hereunder and both parties may waive

their right to such notice period.

 

   2. Title; Capacity.  The Employee shall serve as Executive Vice

President--Business Development and Chief Technology Officer of the Parent or

in such other reasonably comparable position as the Company, Parent or Parent's

Board of Directors (the "Board") may determine from time to time. The Employee

shall be based at the Company's offices in Herzliya, Israel. The Employee shall

be subject to the supervision of, and shall have such authority as is delegated

to the Employee by, the Board or such officer of the Parent as may be

designated by the Board.

 

   The Employee hereby accepts such employment and agrees to undertake the

duties and responsibilities inherent in such position and such other duties and

responsibilities as the Board or its designee shall from time to time

reasonably assign to the Employee. The Employee agrees to devote his entire

business time, attention and energies to the business and interests of the

Company and Parent during the Employment Period. The Employee agrees to abide

by the rules, regulations, instructions, personnel practices and policies of

the Company and/or Parent and any changes therein which may be adopted from

time to time.

 

   3. Compensation and Benefits.

 

      3.1 Salary.  The Company shall pay the Employee, in periodic installments

   in accordance with the Company's customary payroll practices, an annual base

   salary of One Hundred Sixty Thousand U.S. Dollars (US$ 160,000) commencing

   on the Commencement Date.

 

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   Such salary shall be subject to increase but not decrease thereafter as

   determined by the Compensation Committee of the Parent, at any time.

   Compensation shall be reviewed no less frequently than annually, but the

   Compensation Committee shall have no obligation to make any adjustment in

   any such review.

 

      3.2 Provisions Applicable Only if Employee's Primary Place of Employment

   is Israel.  The customary working hours at the Company are 43 hours a week

   and the customary working days are Sunday through Thursday. Since Employee's

   job is one requiring personal trust, as defined in the Hours of Work and

   Rest Law, 5711 - 1951, the provisions of this law shall not apply to

   Employee. From time to time, according to the requirements of Employee's

   job, Employee will be requested to work in excess of the customary working

   hours and on Fridays. In such cases Employee will not be paid an increment

   for overtime. Employee must inform the Company immediately upon Employee's

   receipt of notice for active reserve duty. Employee's salary for the reserve

   duty period will be paid to Employee in full as provided herein for the

   duration of the Agreement, subject to confirmation of Employee's active

   reserve duty.

 

      3.3 Fringe Benefits.  The Employee shall be entitled to participate in

   all bonus and benefit programs that the Company establishes and makes

   available to its employees, if any, to the extent that Employee's position,

   tenure, salary, age, health and other qualifications make him eligible to

   participate, including, but not limited to, benefits as required by the laws

   of Israel or currently offered to the Employee by the Company as indicated

   on Schedule A to this Agreement.

 

      3.4 Reimbursement of Expenses.  The Company shall reimburse the Employee

   for all reasonable travel, entertainment and other expenses incurred or paid

   by the Employee in connection with, or related to, the performance of his

   duties, responsibilities or services under this Agreement, in accordance

   with policies and procedures, and subject to limitations, adopted by the

   Company from time to time.

 

      3.5 Withholding.  All salary, bonus and other compensation payable to the

   Employee shall be subject to applicable withholding taxes.

 

   4. Termination of Employment Period.  The employment of the Employee by the

Company pursuant to this Agreement shall terminate upon the occurrence of any

of the following:

 

      4.1 At the election of the Company, for Cause as defined in clause (a)

   below, upon 9 months written notice by the Company to the Employee, which

   notice shall identify the Cause upon which the termination is based, and

   opportunity for the Employee to be heard. No notice shall be required for

   termination for Cause as defined in clauses (b), (c), (d), or (e) below,

   except to the extent that notice is required by law in the jurisdiction in

   which the Employee is employed. For the purposes of this Section 4.1,

   "Cause" shall mean (a) a good faith finding by the Board that the Employee

   has failed to perform his reasonably assigned duties for the Company or

   Parent and has failed to remedy such failure within 15 days following

   written notice from the Company to the Employee notifying him of such

   failure, (b) the Employee has willfully engaged in illegal conduct or gross

   misconduct which is materially and demonstrably injurious to

 

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   the Company and/or Parent, (c) the conviction of the Employee of, or the

   entry of a pleading of guilty or nolo contendere (or any analogous

   proceeding) by the Employee to, any crime involving moral turpitude or any

   felony; (d) the Employee is adjudicated bankrupt or makes any arrangement or

   composition with the Employee's creditors; or (e) the Employee becomes of

   unsound mind or is committed as patient for the purposes of any legislation

   relating to mental health.

 

      4.2 At the election of the Employee, for Good Reason (as defined below),

   immediately upon written notice by the Employee to the Company, which notice

   shall identify the Good Reason upon which the termination is based. For the

   purposes of this Section 4.2, "Good Reason" for termination shall mean the

   occurrence, without the Employee's written consent, of any of the events or

   circumstances set forth in clauses (a) through (e) below. Notwithstanding

   the occurrence of any such event or circumstance, such occurrence shall not

   be deemed to constitute Good Reason if such event or circumstance has been

   fully corrected and the Employee has been reasonably compensated for any

   losses or damages resulting therefrom (provided that such right of

   correction by the Company shall only apply to the first notice of

   termination for Good Reason given by the Employee) within 15 days following

   written notice from the Employee to the Company notifying the Company of

   such event.

 

      (a) the assignment to the Employee of duties inconsistent in any material

   respect with the Employee's position (including status, offices, titles and

   reporting requirements), authority or responsibilities, or any other action

   or omission by the Company or Parent which results in a material diminution

   in such position, authority or responsibilities;

 

      (b) a reduction in the Employee's annual base salary as set forth in

   Section 3.1 or as may be increased from time to time in accordance with

   Section 3.1, except for a comparable reduction in salary affecting all

   similarly situated employees;

 

      (c) the failure by the Company to (i) continue in effect any material

   compensation or benefit plan or program (including without limitation any

   life insurance, medical, health and accident or disability plan and any

   vacation or automobile program or policy) (a "Benefit Plan") in which the

   Employee participates or which is applicable to the Employee, unless an

   equitable arrangement (embodied in an ongoing substitute or alternative

   plan) has been made with respect to such plan or program, (ii) continue the

   Employee's participation therein (or in such substitute or alternative

   plan), or in any option plan of the Company or Parent, on a basis not

   materially less favorable, both in terms of the amount of benefits provided

   and the level of the Employee's participation relative to other

   participants, than the basis existing on the date hereof or as may be agreed

   from time to time by the Company and the Employee or (iii) award cash

   bonuses to the Employee in amounts and in a manner substantially consistent

   with awards to other members of the senior management team in light of the

   Employee's title and responsibilities;

 

      (d) a change by the Company in the location at which the Employee

   performs his principal duties for the Company to a new location that is both

   (i) outside a radius of 60 kilometers from the Employee's principal

   residence and (ii) more than 35 kilometers from the location at which the

   Employee performs his principal duties for the Company; or

 

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      (e) any material breach by the Company of this Agreement.

 

   For purposes of this Agreement, the Employee's right to terminate his

employment for Good Reason shall not be affected by his incapacity due to

physical or mental illness.

 

      4.3 Upon the death of the Employee.

 

      4.4 At the election of the Company upon determination by the Board, with

   not less than 30 days prior written notice, or at the election of the

   Employee, with not less than 9 months prior written notice, provided that

   solely for purposes of Section 5.2(b) the date of termination shall be the

   date such written notice is received by the Employee or the Company, as the

   case may be.

 

   5. Effect of Termination.

 

      5.1 Change in Control.  Notwithstanding any provisions hereof to the

   contrary, in the event that the at-will employment relationship is

   terminated by the Employee for Good Reason (as defined in Section 4.2) or by

   the Company, or any acquiring or succeeding corporation, without Cause (as

   defined in Section 4.1) within 12 months after a Change in Control (as

   defined below), the provisions of Section 5.2(b) shall apply.

 

      "Change in Control" shall mean the consummation of a merger,

   consolidation, reorganization, recapitalization or share exchange involving

   the Parent, a transaction involving the sale of the voting stock of the

   Parent or a sale or other disposition of all or substantially all of the

   assets of the Parent in one or a series of transactions (a "Business

   Combination"), unless, immediately following such Business Combination, all

   or substantially all of the individuals and entities who were the beneficial

   owners of the Common Stock of the Parent immediately prior to such Business

   Combination beneficially own, directly or indirectly, more than 50% of the

   combined voting power of the then-outstanding securities entitled to vote

   generally in the election of directors of the resulting or acquiring

   corporation in such Business Combination in substantially the same

   proportions as their ownership of the Common Stock of the Parent immediately

   prior to such Business Combination.

 

      5.2 Payments Upon Termination.

 

      (a) In the event the Employee's employment is terminated by the Company

   pursuant to Section 4.1 or Section 4.3 or by the Employee pursuant to

   Section 4.4, the Company shall pay to the Employee the compensation and

   benefits otherwise payable to him under Section 3 through the last day of

   his actual employment by the Company, including, but not limited to, any

   bonus awarded prior to the date of termination that is attributable to the

   period of employment, even if such bonus is payable after the date of

   termination. Notwithstanding the date of termination of actual employment of

   the Employee, in the event that the Employee's employment is terminated by

   the Employee pursuant to Section 4.4, the Employee shall be entitled to

   compensation and benefits hereunder through the termination of the notice

   period. In addition, in the event that the Employee's employment is

   terminated by the Company pursuant to

 

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   Section 4.3, the vesting of any options granted to the Employee by the

   Parent shall accelerate in full.

 

      (b) In the event the Employee's employment is terminated by the Employee

   pursuant to Section 4.2 or by the Company (including by an acquiring or

   succeeding corporation following a Change in Control) pursuant to Section

   4.4, (i) the Company shall pay to the Employee an amount equal to the

   compensation to which the Employee would otherwise have been entitled had

   the Employee remained employed by the Company for 2 years after such

   termination (based on the Employee's salary as in effect on the date of

   termination), (ii) the Company shall continue to provide to the Employee

   medical and pension benefits for two years after such termination and any

   other benefits as the Company is required to do so by the laws of the

   jurisdiction in which the Employee is employed (to the extent such benefits

   can be provided to non-employees, or to the extent such benefits cannot be

   provided to non-employees, then the cash equivalent thereof), and (iii) the

   vesting of any options granted to the Employee by the Parent shall

   accelerate in full. The payment to the Employee of the amounts payable under

   this Section 5.2(b) shall (i) be contingent upon the execution by the

   Employee of a release in a form reasonably acceptable to the Company and

   (ii) constitute the sole remedy of the Employee in the event of a

   termination of the Employee's employment in the circumstances set forth in

   this Section 5.2(b).

 

      5.3 Survival.  The provisions of Sections 5.1, 5.2(b) and 6 shall survive

   the termination of this Agreement.

 

   6. Non-Competition and Non-Solicitation; Proprietary Information and

Developments.

 

   The Employee shall execute, simultaneously with the execution of this

Agreement, or otherwise upon the request of the Company, the Company's

customary form of non-disclosure and assignment of inventions agreement and

non-competition and non-solicitation agreement.

 

   7. Other Agreements.  The Employee represents that his performance of all

the terms of this Agreement and the performance of his duties as an employee of

the Company do not and will not breach any agreement with any prior employer or

other party to which the Employee is a party (including without limitation any

nondisclosure or non-competition agreement). Any agreement to which the

Employee is a party relating to nondisclosure, non-competition or

non-solicitation of employees or customers is listed on Schedule B attached

hereto.

 

   8. Miscellaneous.

 

      8.1 Notices.  Any notices delivered under this Agreement shall be deemed

   duly delivered: (i) upon being hand delivered; (ii) six business days after

   it is sent by registered or certified mail, return receipt requested,

   postage prepaid; or (iii) one business day after it is sent for

   next-business day delivery via a reputable international overnight courier

   service, in each case to the address of the recipient set forth in the

   introductory paragraph hereto. Either party

 

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   may change the address to which notices are to be delivered by giving notice

   of such change to the other party in the manner set forth in this Section

   8.1.

 

      8.2 Pronouns.  Whenever the context may require, any pronouns used in

   this Agreement shall include the corresponding masculine, feminine or neuter

   forms, and the singular forms of nouns and pronouns shall include the

   plural, and vice versa.

 

      8.3 Entire Agreement. This Agreement constitutes the entire agreement

   between the parties and supersedes all prior agreements and understandings,

   whether written or oral, relating to the subject matter of this Agreement,

   except for those agreements expressly referenced in this Agreement

   (including the Company's non-disclosure and assignment of inventions

   agreement and non-competition and non-solicitation agreement referenced in

   Section 6).

 

      8.4 Amendment.  This Agreement may be amended or modified only by a

   written instrument executed by both the Company and the Employee.

 

      8.5 Governing Law.  This Agreement shall be governed by and construed in

   accordance with the laws of the State of Israel (without reference to the

   conflicts of laws provisions thereof). Any action, suit or other legal

   proceeding arising under or relating to any provision of this Agreement

   shall be commenced only in a court of the State of Israel, and the Company

   and the Employee each consents to the jurisdiction of such a court. The

   Company and the Employee each hereby irrevocably waive any right to a trial

   by jury in any action, suit or other legal proceeding arising under or

   relating to any provision of this Agreement.

 

      8.6 Successors and Assigns.  This Agreement shall be binding upon and

   inure to the benefit of both parties and their respective successors and

   assigns, including any corporation with which, or into which, the Company

   may be merged or which may succeed to the Company's assets or business,

   provided, however, that the obligations of the Employee are personal and

   shall not be assigned by him.

 

      8.7 Waivers.  No delay or omission by the Company in exercising any right

   under this Agreement shall operate as a waiver of that or any other right. A

   waiver or consent given by the Company on any one occasion shall be

   effective only in that instance and shall not be construed as a bar or

   waiver of any right on any other occasion.

 

      8.8 Captions.  The captions of the sections of this Agreement are for

   convenience of reference only and in no way define, limit or affect the

   scope or substance of any section of this Agreement.

 

      8.9 Severability.  In case any provision of this Agreement shall be

   invalid, illegal or otherwise unenforceable, the validity, legality and

   enforceability of the remaining provisions shall in no way be affected or

   impaired thereby.

 

      8.10 Collective Agreements.  There are no collective agreements affecting

   the terms and conditions of employment of the Employee.

 

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   THE EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND

UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

 

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   IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of

the day and year set forth above.

 

                                 PARTHUSCEVA, LTD.

 

                                 By:  /s/ Eliyahu Ayalon

                                    --------------------------------------------

 

                                 Title: Eliyahu Ayalon, Chief Executive Officer

                                       -----------------------------------------

 

                                 EMPLOYEE

 

                                   /s/ Gideon Wertheizer

                                 -----------------------------------------------

                                 Gideon Wertheizer

 

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                                  SCHEDULE A

 

                                Fringe Benefits

 

Holidays and Vacation:        In addition to all public holidays, Employee will

                              be entitled to 30 days annual leave during each

                              completed calendar year, which includes any

                              shut-down period that may occur at Christmas or

                              Easter, holidays to be taken by pre-arrangement

                              with the Company.

 

Accumulated Vacation

and Sick Days:

 

Performance Bonus:            Employee will be entitled to such bonuses as may

                              be awarded by the Compensation Committee of the

                              Board of Directors of the Company in its sole

                              discretion.

 

The following provisions apply only if the Employee's primary place of

employment is Ireland:

 

Pension Program:              The Company will contribute to a pension plan

                              equivalent to       % of Employee's salary,

                              providing retirement, death, disability and other

                              benefits. Employee may make further personal

                              contribution up to an additional       % of gross

                              salary. Such contributions are fully tax

                              deductible at Employee's higher rate of tax.

 

VHI:                          The Company operates a group VHI scheme which

                              offers Plan B to all employees employed in

                              Ireland. Contributions are made directly by the

                              Company.

 

Sick Leave:                   Employee is entitled to sick leave in accordance

                              with the terms as authorized from time to time by

                              the Company.

 

The following provisions apply only if the Employee's primary place of

employment is Israel:

 

Pension Fund:                 The Company will allocate to the pension fund, a

                              provident fund or to Manager's Insurance, as

                              Employee shall choose, out of the salary as

                              specified in Section 3 of the Agreement, up to

                              the maximum allowed by law, in accordance with

                              the following breakdown:

 

                              (i) 8.33% of the salary on account of severance

                              pay--at the Company's expense;

 

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                              (ii) 5% of the salary on account of benefits--at

                              the Company's expense;

                              (iii) 5% of the salary on account of benefits--at

                              Employee's expense; and

                              (iv) Inability to work insurance at the Company's

                              expense and in accordance with the Company's

                              procedures.

 

                              The Company's allocations to Manager's Insurance

                              are made in lieu of any other obligation to pay

                              severance or make allocations to a pension fund.

                              Employee's agreement to the allocation made in

                              this section absolves the Company from the need

                              to contact the Minister of Labor in order to

                              obtain his approval in accordance with clause 14

                              of the Severance Pay Law. However, should the

                              need arise to contact the Minister of Labor and

                              obtain a suitable permit, Employee's signature on

                              this Agreement shall constitute Employee's

                              consent allowing the Company to contact the

                              Minister of Labor in Employee's name in order to

                              obtain a permit. If, in the future, the Company

                              is compelled by law and/or by an order of

                              expansion that applies to the entire economy, to

                              allocate funds to an arrangement or to a

                              comprehensive or other pension fund, this

                              allocation will be made to the new arrangement or

                              fund that will be in force instead of the

                              arrangement in this agreement, unless subject to

                              the regulations of the appropriate fund.

 

Sick Leave:                   Employee shall be entitled to 30 days of sick

                              leave per year, with a maximum accumulation of 90

                              days of sick leave. Employee's entitlement to

                              sick leave is conditioned upon proper medical

                              certification of an illness. Employee shall not

                              be entitled to receive pay in lieu of taking sick

                              leave.

 

Study Fund:                   During the period of Employee's employment at the

                              Company, the Company will make allocations to a

                              Study Fund in the amount of 7.5% of Employee's

                              salary up to the maximum allowed by law, at the

                              Company's expense, and 2.5% of Employee's salary

                              up to the maximum allowed by law, at the

                              Employee's expense.

 

Car:                          Employee will be given the use of a Company car

                              as of the commencement of Employee's employment.

                              All expenses for the car will be paid by the

                              Company, apart from a payment for the value of

                              the use of the car, which will be paid by

                              Employee, and will be deducted by the Company

                              from Employee's monthly salary.

 

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                                  SCHEDULE B

 

                               Prior Agreements

 

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