Exhibit 10.34
To: Tal Simchony
Re: Your Employment at DSP
Group Ltd.
We are pleased to ask you to join
DSP Group Ltd (hereinafter: the “Company”) in
accordance with the following Employment Terms:
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a.
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Your position
at the Company will be: President.
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b.
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Directly
subordinate to: CEO.
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1.
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In
consideration for your work at the Company, the Company will pay
you the gross annual sum of $176,000 (hereinafter: “the
Salary”), in 12 equal monthly payments, in New Israeli
Shekels, according to the representative dollar rate.
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The Salary sum is gross and includes
all the Salary components and various increases, and you will not
be entitled to receive any consideration or additional payment of
any kind whatsoever, beyond the Salary, unless otherwise explicitly
stated in this Agreement.
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2.
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In addition to
the aforesaid, the Company will pay you an increase of $44,000 as a
Global Increase for working overtime and during special hours
(hereinafter: “the Global Increase”), in 12 equal
monthly payments, in New Israeli Shekels, according to the
representative dollar rate.
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3.
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The Salary and
the Global Increase will be updated in accordance with the updating
rates of the cost of living increases in the economy.
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4.
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The Company
will duly withhold tax from your Salary, pursuant to the Income Tax
Regulations, as well as health tax and National Insurance Institute
payments.
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5.
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The Salary will
include the convalescence pay component required by law.
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1.
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The Company
will allocate amounts from your Salary and from the Global
Increase, as specified in Sections 2a.1 and 2a.2 above, for the
pension fund
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or provident fund or Directors
Insurance, at your discretion, according to the following
details:
a) 8.33% of the Salary and the
Global Increase on account of severance pay – at the
Company’s expense
b) 5% of the Salary and the Global
Increase on account of benefits – at the Company’s
expense
c) 5% of the Salary and the Global
Increase on account of benefits – at your expense
d) Disability Income Insurance at
the Company’s expense and in accordance with the
Company’s procedures
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2.
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The
company’s allocations for Directors Insurance as stated in
Section 2b.1 above are on account of every other obligation to
remit severance pay and/or pension fund allocations, insofar as
these exist according to law.
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3.
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If, in the
future, the Company is required by law and/or expansion order
applicable to the entire economy to allocate sums for an
arrangement or comprehensive pension fund, this allocation will be
intended for the fund or the applicable new arrangement, in lieu of
the arrangement in this Agreement, and the Company will not be able
to withdraw sums on account of the deposits made into the previous
arrangement, but rather subject to the regulations of the fund
and/or other appropriate fund.
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c.
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In-service Training Fund
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During your period of employment at
the Company, it will allocate sums to a professional development
fund. These allocations will be calculated at the rate of 7.5% of
your Salary and the Global Increase on the Company’s account
and at 2.5% of the Salary and the Global Increase on the
employee’s account.
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1.
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The Company
will provide you with a company vehicle (hereinafter: the
“Vehicle”) as of the beginning date of your
employment.
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2.
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The Company
will pay all the Vehicle expenses except the car use value fee,
which will be deducted from your monthly Salary.
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1.
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During your
employment period, you will be entitled to an annual vacation of 23
(twenty-three) working days. You must coordinate the time of your
departure for said vacation with your superior.
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2.
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Accumulation of
vacation days for a duration exceeding the total vacation days due
for two contractual years will not be allowed. The vacation days
that have accumulated beyond this maximum number will be redeemed
for money once per year.
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3.
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The Company
will be entitled to order you to take an annual vacation and use up
to half of your annual vacation days, including departure for an
organized, concentrated vacation.
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1.
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You are
entitled to 30 (thirty) days’ sick leave per year, with the
possibility of accumulating 3 (three) years’ sick leave, i.e.
90 (ninety) days.
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2.
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Full payment
for sick leave will be remitted from the first day (full payment
for each sick day). You must submit a doctor’s note in
accordance with the Company’s policy.
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3.
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Accumulated
sick leave may not be redeemed for money.
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1.
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Before taking
time off for reserve duty, you must notify the Company upon receipt
of your reserve duty order.
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2.
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The Salary for
the reserve duty period will be paid to you in full, as stated
above in this Agreement, subject to submission of an appropriate
document verifying your active reserve duty.
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h.
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Your
Eligibility for the Company’s Employee Option
Plan
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The Company’s management will
recommend that the DSP Group, Inc.’s Board of Directors grant
you – in a capital gains track – options to acquire
120,000 shares of the DSP Group, Inc. common stock, or a larger
amount of SARs shares of the DSP Group, Inc. common stock, subject
to the terms of the DSP Group Inc.’s employee stock/option
plan.
In order to dispel any manner of
doubt, it is hereby clarified that, in any case, approval to grant
the aforementioned options is subject to approval by the DSP Group,
Inc.’s Board of Directors and the Authorities, as specified
in the Company Procedures.
It is customary to allocate bonuses
to some Company employees, and when management-level discussions of
bonuses are held, the Company will decide, at its sole discretion
and in accordance with common practice among members of management,
whether to discuss your eligibility for a bonus as well.
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3.
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The
Contractual Period and its Termination
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a.
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This Agreement
is valid as of the day it is signed by the parties to it. The
contractual arrangement is for a period that is undetermined in
advance. The beginning date of your employment at the Company has
hereby been determined as February 1, 2006.
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Each party will be entitled to
terminate the contractual arrangement by informing the other party
in writing 3 (three) months in advance. The Company reserves the
right to refrain from exploiting the notification period and/or
from terminating your employment immediately. In this case, you
will be paid an early notification fee equal to the Salary and the
Global Increase for the aforementioned period, on the basis of your
last Salary.
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b.
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Furthermore,
should your employment be terminated by the Company, except for the
reasons specified in Section 3c, you will be entitled to keep
the Company car until termination of the employer-employee
relationship.
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c.
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The Company
will be entitled to terminate your employment without prior
notification in the following cases:
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1. You have been convicted of a
work-related criminal offense and/or an infamous
offense.
2. You have violated your duty of
fidelity to the Company and/or committed an act constituting a
conflict of interest.
3. You have violated your obligation
to maintain confidentiality as specified below in this Agreement
and its appendices.
4. You have maliciously harmed the
Company or caused it damage in consequence of an act of gross
negligence.
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4.
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Transfer
of Allocations and Severance Pay
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Should your employment be
terminated, the Company will transfer to you all the allocations
that you have accumulated in your name in the Directors Insurance
Policy and/or the fund (hereinafter: the
“Allocations”). In any case, should your employment be
terminated under circumstances that entitle you to severance pay,
the Company shall act in accordance with the Severance Pay Law,
5723-1963.
The following is a list of the
reasons that will negate the transfer of the Company’s
allocations in your name:
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a.
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The Company has
dismissed you under circumstances entitling it to legally dismiss
you without severance pay.
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b.
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You have
violated your fiduciary duty and/or duty of confidentiality toward
the Company, under this Agreement, and without derogating from the
generality of the aforementioned – violation of the
Confidentiality Agreement attached as Appendix A to this Agreement
and which constitutes an integral part thereof.
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c.
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You have been
convicted of a criminal offense and/or infamous offense.
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d.
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You have
stopped working at the Company without giving the required advance
notification specified in Section 3b above.
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e.
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You have
stopped working at the Company without transferring your job, as
specified in Section 7 below.
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It is hereby clarified that your
transfer from the employment framework of the Company to that of a
new company that is established – if established as part of
the Company – and your employment at such a company, will not
constitute termination of your employment or your resignation
and/or dismissal from the Company, for the purpose of transferring
the various allocations, including severance pay, yet without
derogating from the generality of the aforementioned, unless a
significant change in your job occurs.
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a.
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The customary
work hours at the Company are 44 hours a week, and the customary
workdays are Sunday through Thursday. Should the work require that
you remain on the job after the customary work hours, you will be
obliged to do so.
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b.
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As your
position is among those requiring a special degree of personal
trust, as defined in the Working Hours and Rest Law, 5711 –
1951, you will not be subject to the provisions of this law. From
time to time, the requirements of your position will necessitate
your working beyond the customary hours and on Fridays. In these
cases, you will not be paid for overtime.
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6.
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The
Company’s Procedures
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You are obliged to uphold the
Company’s Procedures as well as any change, addition or
adjustment therein, as they will be published from time to
time.
During the period of your employment
at the Company, and for a period of two years thereafter, you may
not solicit, encourage, or cause others to solicit or encourage,
any other employee to stop working at the Company.
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8.
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The Duty
of Fidelity and Avoidance of Conflicts of
Interest
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a.
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You hereby
undertake to carry out your job with dedication and fidelity; to
use all your skills, knowledge and experience for the
Company’s benefit and advancement, at the highest, most
efficient level and as the Company sees fit. In addition, you
hereby undertake to act according to the Company’s
instructions regarding everything related to the work performance,
work arrangements, discipline and conduct put into effect from time
to time.
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b.
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Once you begin
working full time for the Company specified in Section 3a
above, i.e. beginning on February 1, 2006, you may not work at
any other job and/or occupation as a salaried employee and/or
consultant and/or self-employed individual, be it directly and/or
indirectly, unless you have the Company’s advance written
approval to do so. In any case, you may not work in any capacity if
said job conflicts with the Company’s interests (a list of
your current activities is attached as an appendix to this
Agreement).
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c.
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Throughout the
agreement period, you will not receive any payment or other benefit
from any third party, be it directly or indirectly related to your
job. It is hereby clarified that a violation of this provision
constitutes a violation of a fundamental condition of this
Agreement, and, in addition, the aforementioned sum or benefit
received by you will belong to the Company, which will be entitled
to deduct the said sum or the value of the benefit from all the
sums due you from the Company.
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d.
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You will not
carry out any action that constitutes harm to your fidelity to the
Company and/or is liable to place you in a position of conflict of
interest vis-à-vis the Company. You hereby unde
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