Skyline Multimedia Entertainment, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
May 12, 1998
Mr. Xxxxxx Xxxxxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Xxxxxx:
This letter will confirm our understanding and your agreement with
Skyline Multimedia Entertainment, Inc. and its subsidiaries (collectively, the
"Company") as follows:
1. Employment. You will be employed as Executive Director of
Operations and Finance of the Company on an interim basis until further
notification by the Board of Directors. In the event the Board of Directors
determines that you shall no longer be employed as Executive Director of
Operations and Finance (except pursuant to Paragraph 10A herein), you shall
continue to be employed for the remainder of the Term (as defined below) as
Chief Financial Officer of the Company with no diminution in the Base Salary
(as set forth herein). You agree to devote substantially all of your time and
attention to the affairs of the Company to fulfill your responsibilities
hereunder during the Term of this Agreement. You shall report directly to the
Board of Directors of the Company or to such person as directed by the Board
of Directors.
2. Term. Your employment with the Company will continue as
of the date hereof for a period ending on June 30, 1999 (the "Term") unless
terminated sooner in accordance with the provisions of Paragraphs 10A or 10B.
This Agreement may be renewed from year to year upon written notice by the
Company of same, including in such notice any modifications of the terms
hereof, delivered to you not less than three months prior to the end of the
then current Term and accepted by you within 30 days of such notice.
3. (a) Annual Salary. During the Term, the Company will pay
you an annual salary of $140,000 (the "Base Salary") payable in equal
installments every two weeks.
(b) Bonus. In addition to the compensation set forth
herein, you will be entitled to receive bonuses as the Board of Directors shall
determine.
4. Stock Options. You will be eligible to receive grants of
stock options under the Company's Stock Incentive Plan as the Board of
Directors shall determine. Upon execution of this Agreement, you shall be
entitled to receive stock options under the Company's Stock Incentive Plan
exercisable for 100,000 shares of Common Stock of the Company at an exercise
price per share equal to the fair market value on the date hereof, which
options shall vest at the rate of 50% on the date which is 90 days from the
date hereof and the remaining 50% on June 30, 1999; provided, however, in each
instance, that you have not been terminated as an employee of the Company on
such vesting dates. Additionally, you shall receive that number of stock
options under the Company's Stock Incentive Plan, subject to satisfaction of
the performance criteria, as set forth on Schedule A hereto; provided,
however, that the vesting of such options shall accelerate and such
performance criteria shall be deemed satisfied in the event of the sale of the
Company or the disposition of substantially all of the assets of the Company
or a similar event during the Term.
5. Benefits. You will be entitled to participate in and be
covered by all health, insurance, bonus, pension and other employee plans and
benefits established by the Company for its employees generally, subject to
meeting applicable eligibility requirements.
6. Vacations and Holidays. During the Term, you will be
entitled to an annual vacation leave of three weeks at full pay. You will be
entitled to such holidays as are established by the Company for all employees.
In addition, you will be entitled to four personal days at your choosing at
full pay.
7. Confidential Information. During the Term as same may be
renewed and thereafter, you agree that you will not make use of any
information you become aware of in connection with your duties hereunder
unless such information is in the public domain, for your own purposes or for
the benefit of anyone other than the Company, whether or not such information
is specifically treated or marked as "Confidential". In the event of the
termination of your employment with the Company (irrespective of the cause of
termination), you will promptly deliver to the Company all materials,
property, documents, data and other information belonging to the Company or
pertaining to Confidential Information. You shall not take any materials,
property, documents or other information, or any reproduction or excerpt
thereof, belonging to the Company or pertaining to any Confidential
Information.
"Confidential Information" shall mean any information
regarding the business methods, business policies, procedures, techniques,
research or processes of or developed by the Company, or any names and
addresses of customers, vendors, strategic partners or joint venturers or
clients or any data on or relating to past, present or prospective customers,
clients, vendors, strategic partners or joint venturers or any other
confidential information relating to or dealing with the business operations
or activities of the Company, made known to you or learned or acquired by you
while in the employ of the Company.
8. Injunctive Relief. You agree that the Company cannot be
adequately compensated in damages in an action at law in the event that you
have breached your obligations
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under Paragraph 8 of this Agreement. Therefore, you expressly agree that the
Company shall be entitled to injunctive and other relief without the posting
of a bond or other security in addition to any other rights or remedies which
the Company may possess. In the event that any of the prohibitions of this
Agreement relating to the scope or period of restriction shall be deemed to
exceed the maximum scope or period of time which a Court deems valid and
enforceable, such scope or period shall be reduced to the maximum deemed
allowable by such court.
9. A. Termination. The Board of Directions may
terminate your employment hereunder as follows:
(a) upon your death, whereupon this Agreement shall
immediately terminate;
(b) upon a determination of Permanent Disability;
"Permanent Disability" shall mean a physical or mental
incapacity as a result of which you become totally unable to
continue the performance of your duties hereunder for a
period of 90 consecutive days. A determination of Permanent
Disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and you or
your legal representative. In the absence of agreement
between the Company and you, each party shall nominate a
qualified medical doctor and the two doctors so nominated
shall select a third doctor, who shall make the
determination as to the occurrence and continuance of a
Permanent Disability; or
(c) for Cause, whereupon this Agreement shall
immediately terminate. "Cause" shall mean only the
following:
(i) the willful and, after notice and a
reasonable opportunity to cure, continued failure
by you to substantially perform your duties
hereunder (other than such failure resulting from
your incapacity due to physical or mental illness);
(ii) personal dishonesty in the
performance of your duties to the Company;
(iii) willful misconduct by you in
performance of your duties to the Company (which
includes a willful, material breach of this
Agreement by you);
(iv) conviction of a felony;
(v) willful theft from the Company or
misuse of Company funds or assets; or
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(vi) a willful violation of any law, rule
or regulation, or the imposition of a final order
issued by any regulatory authority against the
Company, which, in any event, prohibits you from
holding a position with the Company.
For purposes of this Agreement, no act, or failure to act,
on your part shall be considered "willful" unless done, or omitted to
be done, by you in bad faith and without a reasonable belief that
such action or omission by you was in the best interests of the
Company.
Any termination pursuant to this provision shall be
accompanied by a written explanation of the event or events
constituting "cause", which writing shall be executed by the
Company's President and/or Chief Executive Officer and/or Board of
Directors.
If you are terminated without "cause" (as determined by a
judicial non-appealable decision or a decision the Company chooses
not to appeal), or any other basis for termination not permitted
hereunder, or you terminate this Agreement for "Good Reason" (as
defined below), you shall be entitled to a severance payment equal to
no more than the remainder of your salary for the unexpired portion
of the Term of this Agreement. In the event of your termination of
employment, you shall be under an obligation to use reasonable
efforts to seek other employment and there shall be an offset against
any amounts due you hereunder on account of any remuneration you may
obtain from any subsequent employment.
10. B. You will be entitled to terminate this Agreement
for Good Reason if:
(a) You are asked by the Company to take actions
inconsistent with your obligations to the public or regulatory
agencies; or
(b) The Company breaches any term or covenant
contained herein.
11. Notice. For purposes 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 delivered or mailed by United
States registered mail, return receipt required, postage prepaid, as follows:
If to the Company:
Skyline Multimedia Entertainment, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chairman, Compensation Committee of the Board
of Directors
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If to Executive:
Xxxxxx Xxxxxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx, X.X. 11210
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
without regard to its conflicts of laws provisions.
13. Arbitration. Any and all disputes or controversies
arising out of or relating to this Agreement, other than injunctive relief
pursuant to Paragraph 9, shall be resolved by arbitration at the American
Arbitration Association at its New York City offices before a panel of one
arbitrator under the then existing rules and regulations of the American
Arbitration Association. The parties agree that in any such arbitration, the
arbitrator shall not have the power to reform or modify this Agreement in any
way and to that extent his powers are so limited. The determination of the
arbitrator shall be final and binding on the parties hereto and judgment on it
may be entered in any court of competent jurisdiction. Except as required by
law, neither the Company nor Executive shall issue any press release or make
any statement which is reasonably foreseeable to become public with respect to
any arbitration or dispute between the parties without receiving the prior
written consent of the other party to the content of such press release or
statement. In the event Executive prevails in such proceedings, as determined
by the arbitrator, the Company shall reimburse Executive for all expenses
(including, without limitation, reasonable legal fees and expenses) incurred
by Executive in connection with such proceeding or any other proceeding in
which Executive prevails in contesting or defending any claim or controversy
arising out of or relating to this Agreement. All such amounts shall be paid
promptly, but in any event within ten (10) days after Executive provides the
Company with a statement of such amounts to be recovered. In the event
Executive does not prevail in such proceedings, as determined by the
arbitrator, each party hereto shall be responsible for their own expenses
(including, without limitation, legal fees and expenses) incurred in
connection with such proceedings.
14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
Very truly yours,
SKYLINE MULTIMEDIA ENTERTAINMENT, INC.
By:
-----------------------------------
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ACCEPTED AND AGREED TO:
--------------------------------------
Xxxxxx Xxxxxxxx
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Schedule A
----------
Performance-Based Stock Options
-------------------------------
------------------------ ------------------------------- ----------------------------------------------
Exercise Price Per
Number of Shares Share (FMV on Vesting Criteria Skyride and
Subject to Option grant date) XS New York EBITDA Targets
----------------- ----------- --------------------------
------------------------ ------------------------------- -----------------------------------------------
1. 100,000 $.3125 [6/15] for the six month period ending 12/31/98 =
$1,021,000 or for the twelve month period
ending June 30, 1999 = $1,577,000
------------------------ ------------------------------- -----------------------------------------------
2. 100,000 $.3125 [6/15] for the twelve month period ending June 30,
1999 = $1,577,000
------------------------ ------------------------------- -----------------------------------------------
------------------------ ------------------------------- -----------------------------------------------
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