EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1 day of May, 2004, by and
between ZONE4PLAY LTD., a company incorporated under the laws of the State of
Israel and maintaining its principal place of business at 0X Xxxxxxxxx Xxxxxx,
Xxx Xxxx, 00000 Xxxxxx (the "COMPANY") and Xxxx Xxxxxx, Israeli I.D. number
028771749, residing at 00 Xxxxxxxx Xx. Xxx Xxxx, Xxxxxx (the "EXECUTIVE").
WHEREAS: The Company is in the business of developing, on a contractual basis,
casino game applications for internet, portable devices and interactive
TV platforms; and
WHEREAS: The Company is intends to expand its businesses into the field of
end-to-end solutions for deploying institutional gaming operators
(Lottery, Sports betting, Bingo etc.) on interactive platform
(hereinafter: "TMI"); and
WHEREAS: The Company desires to employ the Executive as the Executive Vice
President of the Company, who in the scope of his duties will be in
charge of establishing the "TMI", building a strategic plan for the
Company and managing the day by day business development activities of
the Company, and the Executive represents that he has the requisite
skill and knowledge to serve as the Executive Vice President of the
Company subject to the terms and conditions contained herein and he
desires to engage in such employment, according to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, the parties agree as follows:
1. EMPLOYMENT
(a) The Company agrees to employ the Executive and the Executive agrees
to be employed by the Company on the terms and conditions set out in
this Agreement.
(b) The Executive shall be employed as the Executive Vice President of
the Company. The Executive shall perform the duties, undertake the
responsibilities and exercise the authority customarily performed,
undertaken and exercised by persons situated in a similar capacity,
subject to the direction of the Chief Executive Officer (the "CEO").
The Executive shall report regularly to the CEO with respect to his
activities.
(c) Excluding periods of vacation, sick leave and military reserve
service to which the Executive is entitled or required, the
Executive agrees to devote his full working time and attention to
the business and affairs of the Company and its subsidiaries as
required to discharging the responsibilities assigned to the
Executive hereunder. During the term of this Agreement, the
Executive shall not be engaged in any other employment nor engage
actively in any other business activities or in any other activities
which may hinder his performance hereunder, with or without
compensation, for any other person, firm or company without the
prior written consent of the Company.
(d) This Agreement is a personal services agreement governing the
employment relationship between the parties hereto. This Agreement
shall not be subject to any general or special collective employment
agreement relating to executives in any trade or position that is
the same or similar to the Executive's, unless specifically provided
herein.
(e) The Executive's position, duties and responsibilities hereunder
shall be in the nature of management duties that demand a special
degree of personal loyalty and the terms of Executive's employment
hereunder shall not permit application to this Agreement of the Law
of Work Hours and Rest 5711 - 1951. Accordingly, the statutory
limitations of such law shall not apply to this Agreement. The
Executive shall not be entitled to additional compensation from the
Company for working additional hours or working on holidays or
Sabbaths, as required by the Company.
2. BASE SALARY
(a) The Company agrees to pay to the Executive during the term of this
Agreement a gross salary of 17,000 New Israeli Shekels ("NIS") per
month (the "BASE SALARY").
(b) Should the Company elect to continue the executive's employment
following the first three (3) months of Executive's engagement with
the Company, the Base Salary shall be increased to 20,000 New
Israeli Shekels ("NIS") per month.
(c) The Base Salary shall be payable monthly in arrears, no later than
the 10th day of each month.
3. EXECUTIVE BENEFITS
In addition to the Base Salary, the Executive shall also be entitled to
the following benefits:
(a) Sick Leave. The Executive shall be entitled to fully paid sick leave
pursuant to the Sick Pay Law 5736 - 1976.
(b) Vacation. The Executive shall be entitled to an annual vacation of
16 working days per year. Vacation may be accumulated for a maximum
of 3 years.
(c) Convalescence Payments. The Executive shall be entitled to annual
payments for convalescence in an amount equal to the amount required
by law linked to the cost of living on the date of this Agreement.
(d) Vehicle. For the purpose of performing his duties under this
Agreement, the Company shall furnish the Executive with a Company
owned/leased vehicle. The Company will bear all expenses related to
the vehicle maintenance and operation, including licensing,
insurance, fuel and maintenance fees. The Company will withhold the
taxes required by law out of the Executive's salary in accordance
with the type of vehicle he is furnished with. The Executive shall
operate the vehicle with due care and diligence and in accordance
with the Company's then current regulations and practices. The
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Executive shall also bear any costs and expenses due to parking
tickets incurred during his use of the vehicle. In addition, the
Executive shall be required to bear the cost of any deductible
amount under the applicable insurance policy with respect to the
vehicle , in the event of submission of an insurance claim under
such policy. In no event will the Executive be entitled to retain or
withhold the vehicle in connection with a claim against the Company.
(e) Manager's Insurance Policy. Beginning on the date which is three (3)
months form the date of this Agreement, the Company shall insure the
Executive under an accepted "Manager's Insurance Scheme" ("Bituach
Menahalim") as shall be customary with the Company and/or a
comprehensive financial arrangement, at the Company's discretion,
including insurance in the event of illness of loss of capacity for
work (hereinafter referred to as the "MANAGERS INSURANCE") as
follows; (i) the Company shall pay an amount equal to 5% of the
Executive's Base Salary towards the Managers Insurance in respect of
pension and life insurance for the Executive's benefit, and shall
deduct 5% from the Executive's Base Salary and pay such amount
towards the Managers Insurance for the Executive's benefits; (ii)
the Company shall pay an amount up to 2.5% of the Executive's Base
Salary towards disability insurance; and (iii) the Company shall pay
an amount equal to 8 1/3 % of the Executive's Base s Salary towards
a fund for severance compensation. Should the provisions made for
severance pay fail to cover the amount due by the Company to
Executive in accordance with the law, then the Company shall pay
Executive the difference, all in accordance with applicable said
Israeli law.
(f) Education Fund. Beginning on the date which is six (6) months form
the date of this Agreement, the Company and the Executive shall open
and maintain an Education Fund ("Keren Hishtalmut") ("EDUCATIONAL
FUND"), as customary with the Company, recognized as such by the
Israeli tax authorities. The Company shall contribute to such
Education Fund, which shall be maintained in the name of the
Executive, the full amount equal to 7.5% of each monthly Base Salary
payment. The Executive shall contribute to the Educational Fund the
full amount equal to 2.5% of each monthly Base Salary payment.
(g) Business Expenses. The Company will reimburse Executive for any
documented, out-of-pocket expenses from time to time properly
incurred by Executive in connection with his employment by Company.
(h) Sales commissions. The Executive shall be entitled to sales
commissions equal to a rate of 5% of the aggregate of TMI's total
net revenues and excluding any revenues related to Holland Casino
and any related sale and value added tax, calculated and payable
quarterly by the Company.
For the avoidance of doubt it is hereby clarified that this
sub-section shall be valid in the event that for any reason the
Company shall conduct its operation in connection with TMI through
an internal division of the Company, in which case, the Executive's
commission shall be calculated based upon the Company's total net
revenue in connection with the activities intended to be performed
through TMI.
In avoidance of doubt, section 3(h) herein, shall not apply to
agreements and transactions, whether complete or in progress,
initiated prior to this Agreement.
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This sub-section shall be effective and binding upon the Company
throughout the term of this Agreement and for an additional period
of 12 months thereafter.
(i) Reserve Military Service. The Executive shall be entitled to payment
of his Full Salary for periods in which the Executive is called for
reserve military service, provided that the Executive obtains for
the Company approval to receive the payments due from the Social
Security Institute.
(j) Tax Withholding. All of the amounts stated in this Agreement are
gross amounts and the Company shall withhold the appropriate amounts
for income tax purposes as required by law.
(l) Options. The Company will grant the Executive an option to purchase
the number of ordinary shares (the "Shares") of the Company set
forth below (the "Options"), out of the Company's authorized
capital, at the respective Purchase Prices set forth below, on the
terms and subject to the conditions hereinafter provided: :
1. An Option to purchase 200,000 Shares at a purchase price per
Share reflecting a discount of 15% of the market price of the
Shares on the date of this Agreement. The Option will be
exercisable for a period of 60 months from the date of grant
and will be subject to the following vesting periods:
1/8 of such Shares will vest on July 1st 2004
1/8 of such Shares will vest on October 1st 2004
1/8 of such Shares will vest on January 1st 2005
1/8 of such Shares will vest on April 1st 2005
1/8 of such Shares will vest on July 1st 2005
1/8 of such Shares will vest on October 1st 2005
1/8 of such Shares will vest on January 1st 2006
1/8 of such Shares will vest on April. 1st 2006
2. If the Company's gross revenues exceed $15million during the
calendar year 2005, a fully vested Option to purchase 180,000
Shares at a purchase price per Share reflecting a discount of
15% of the Share's market price on this Agreement and
exercisable for a period of 60 months from this Agreement's
effective date.
3. In addition to section (2) above, if the Company's gross
revenues exceed $20 million during the calendar year 2006, a
fully vested Option to purchase 180,000 Shares with a purchase
price of per Share (reflecting a discount of 15% of the
Share's market price on this Agreement and exercisable for a
period of 60 months of this Agreement's effective date.
4. TERMINATION
(a) Either party may terminate this Agreement and the employee-employer
relationship between the Executive and the Company at any time upon
sixty (60) days or, in the case of the Company, within the notice
period required by law if such termination occurs within three (3)
months of the date of this Agreement (the "NOTICE PERIOD") by
providing written notice to the other party specifying the effective
date of termination (the "TERMINATION Date"). If such termination
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occurs by the Company within three (3) months of the date of this
Agreement, the terms of Section 5 (competitive activity) will not
apply.
(b) During such Notice Period following termination of this Agreement by
the Company, the Executive shall be entitled to compensation
pursuant to Section 2 and to all of the benefits set forth in
Section 3. During such Notice Period following termination of this
Agreement by the Executive, the Executive shall be entitled to
compensation pursuant to Section 2.
(c) During the Notice Period, the Executive shall transfer his position
to his replacement in an orderly and complete manner and shall
return to the Company all documents, professional literature and
equipment belonging to the Company, which may be in his possession
at such time.
5. COMPETITIVE ACTIVITY
During the term of this Agreement and for a period of twelve (12)
months from the Termination Date of this Agreement, the Executive
will not directly or indirectly:
(i) Carry on or hold an interest in any company, venture, entity
or other business (other than a minority interest in a
publicly traded company) which directly competes with the
products or services of the Company or its subsidiaries,
including those products or services contemplated in a plan
adopted by the Board of Directors of the Company or its
subsidiaries (a "COMPETING BUSINESS");
(ii) Act as a consultant or executive or officer or in any
managerial capacity in a Competing Business or supply in
competition with the Company or its subsidiaries services
("RESTRICTED SERVICES") to any person who, to his knowledge,
was provided with services by the Company or its subsidiaries
any time during the six (6) months immediately prior to the
Termination Date;
(iii) Solicit, canvass or approach or endeavor to solicit, canvass
or approach any person who, to his knowledge, was provided
with services by the Company or its subsidiaries at any time
during the six (6) months immediately prior to the Termination
Date, for the purpose of offering Restricted Services or
products which compete with the products supplied by the
Company or its subsidiaries at the Termination Date; or
(iv) Employ, solicit or entice away or endeavor to solicit or
entice away from the Company or its subsidiaries any person
employed by the Company or its subsidiaries any time during
the six (6) months immediately prior to the Termination Date
with a view to inducing that person to leave such employment
and to act for another employer in the same or a similar
capacity.
6. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when personally delivered or sent by registered mail,
postage prepaid, addressed to the respective addresses set forth below or
last given by each party to the other, except that notice of change of
address shall be effective only upon receipt.
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The initial addresses of the parties for purposes of this Agreement shall
be as follows:
The Company: 0X Xxxxxxxxx Xxxxxx, Xxx Xxxx, 00000 Xxxxxx
The Executive: 00 Xxxxxxxx Xxxxxx, Xxx Xxxx
0. MISCELLANEOUS
(a) No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
(b) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Israel.
(c) 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.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof. No agreement or
representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made either party which are
not expressly set forth in this Agreement.
(e) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns, and the Company shall
require such successor or assign to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession or assignment had taken place. The term "SUCCESSORS AND
ASSIGNS" as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the
Company (including this Agreement) whether by operation of law or
otherwise.
(f) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
(g) The provisions of Section 5 of this Agreement shall survive the
rescission or termination, for any reason, of this Agreement, and
shall survive the termination of the Executive's employment with the
Company.
(h) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation
of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ZONE4PLAY LTD. /s/ XXXX XXXXXX
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/s/ XXXXXX XXXXXX XXXX XXXXXX
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BY: XXXXXX XXXXXX
TITLE: CHIEF EXECUTIVE OFFICER
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