Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 30th day of December, 2003, by and between
Interactive Systems Worldwide Inc., a Delaware corporation (the "Corporation"),
and Xxxxx Xxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, the Employee is the founder of the Corporation;
WHEREAS, the Corporation is in the business of developing, producing,
marketing, licensing and servicing computerized sports wagering and related
systems;
WHEREAS, the Corporation desires to continue to employ Employee as its
Chief Executive Officer and Chairman of the Board and Employee desires to
continue to serve the Corporation in such capacities; and
WHEREAS, the Corporation desires to provide certain benefits to the
Employee upon termination of this Agreement, as herein provided.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions herein contained,
the Corporation hereby employs Employee as its Chief Executive Officer and
Chairman of the Board and Employee hereby agrees to serve the Corporation in
such capacities.
2. DUTIES.
2.1 Employee agrees, during the "Term" (as hereinafter defined), to
devote his full business attention to the business of the Corporation and to
perform such duties of an executive and administrative nature as the Board of
Directors of the Corporation, acting reasonably, shall assign or direct,
consistent with his status and position as Chief Executive Officer and Chairman
of the Board, including, without limitation, such duties as would typically be
performed by persons holding similar positions in other companies.
2.2 Employee shall conduct himself at all times in a manner
consistent with his position with the Corporation.
3. TERM.
3.1 The term of Employee's employment (the "Term") shall commence on
the date hereof and shall terminate on December 31, 2005; provided that this
Agreement shall be subject to earlier termination only (i) in the event of
Employee's death; (ii) at the option of the Corporation, in the event of
Employee's "disability" (as hereinafter defined) for 90 consecutive working days
or an aggregate of 120 working days during any consecutive six month period
during the Term; (iii) for cause; or (iv) as provided in Sections 3.3, 5.2 or 7.
3.2 For the purpose of this Agreement, "disability" shall mean any
injury or any physical or mental condition or illness which shall render
Employee unable to perform his duties in accordance with this Agreement.
3.3 Notwithstanding anything to the contrary herein provided, the
Employee shall have the right to retire from his employment with the Corporation
at any time during the Term by giving the Corporation not less than 60 days
prior written notice. Upon the effective date of Employee's retirement, Employee
shall be entitled to the benefits referred to in Article 6.
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4. COMPENSATION AND BENEFITS. As compensation for all services to be
rendered by Employee to the Corporation in all capacities, the Corporation shall
pay to Employee during the Term a minimum of the following, payable in
accordance with the standard payroll practice of the Corporation:
4.1 The Employee shall receive a base salary of not less than
$350,000 per annum.
4.2 In addition, Employee shall be entitled to receive (a) such
salary increases, bonuses or other incentive compensation as may be approved by
the Board of Directors; (b) six weeks vacation during each year of the Term; (c)
such health insurance as the Corporation may from time to time provide to all
other executive employees; (d) such life insurance as the Corporation may
provide to all other executive employees: (e) such other fringe benefits as the
Corporation may provide to its employees; and (f) at the Corporation's expense,
the use of a leased automobile plus all expenses of operating such automobile,
including but not limited to insurance and maintenance costs. In addition to the
foregoing, the Employee shall be permitted to utilize First Class air travel
when travelling on business of the Corporation.
4.3 Notwithstanding the provisions of Section 4.2, in lieu of
participating in the health insurance program provided by the Corporation for
the benefit of all of its employees, the Employee may elect to participate in
other health insurance (and/or Medicare) and in such case the Corporation shall
pay or reimburse the Employee, upon presentation of invoices therefor, for (a)
any deductible or co-payments required to be paid by the Employee, (b) any
health or hospitalization costs not reimbursed to the Employee by such other
health insurance (and/or Medicare) and (c) the premiums for the Employee's
existing life insurance policies in amount of $200,000; provided that the
aggregate payment or reimbursement per annum to which the Employee shall be
entitled for all of the foregoing benefits set forth in this Section 4.3 shall
be $13,400.
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5. REQUIRED RELOCATION.
5.1 During the Term, the Corporation shall not require the Employee
to relocate outside of the New York City/New Jersey metropolitan area (the
"Area").
5.2 In the event that prior to the end of the Term of this
Agreement, the Corporation requires the Employee to relocate outside the Area
and the Employee elects in his discretion, not to do so, the Employee may
voluntarily terminate his employment with the Corporation and in such event the
Corporation shall pay to the Employee (i) an amount equal to the aggregate base
salary being paid to the Employee at the date of termination, from the date of
such termination until the end of the Term which amount shall be payable in a
lump sum on the date of such termination; (ii) continuation of all benefits
described in Sections 4.2, 4.3 and 8 until the end of the Term; and (iii) the
Severance Benefits described in Sections 6.1(a) and (b) and 6.2.
5.3 Notwithstanding the foregoing, the Employee may be required to
travel away from his home for reasonable periods of time in fulfillment of his
responsibilities to the Corporation.
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6. SEVERANCE BENEFITS.
6.1 Upon expiration of the Term of this Agreement as provided in
Section 3.1, or earlier retirement of the Employee as provided in Section 3.3,
or earlier termination as a result of the death or disability of the Employee,
or as provided in Section 5.2, or as a result of a Change of Control, other than
for cause, the Corporation shall pay to the Employee (or the Employee's personal
representative if the Agreement is terminated as a result of the Employee's
death), the following severance benefits (collectively the "Severance
Benefits"):
(a) An amount equal to the annual base salary being paid to the
Employee at the date of expiration, retirement or termination, payable in a lump
sum on the date of such expiration, retirement or termination; and
(b) Continuation of the benefits provided in Section 4.2(c), (d) if
applicable, (e) and (f), Section 4.3 and Section 8 for a period of one year
after the date of such expiration, retirement or termination.
6.2 In addition, the Corporation shall continue to provide the
Employee with the benefits described in Section 4.2(f) for the remainder of the
term of the lease of the leased automobile that was provided to the Employee on
the date of termination of this Agreement.
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7. CHANGE OF CONTROL.
7.1 Notwithstanding any other provisions of this Agreement, in the
event of a "Change of Control" (as hereafter defined) during the Term, the
Employee shall be entitled, at his option, which option shall be exercised by
giving not less than 60 days' prior written notice to the Corporation, to
terminate this Agreement. Whether the Employee terminates this Agreement, or
this Agreement is terminated by the Corporation, after a Change in Control, for
any reason whatsoever other than termination of this Agreement by the
Corporation for cause, the Employee shall be entitled to the following:
(a) If the termination is during the Term, the Employee shall be
entitled to be paid (i) an amount equal to the aggregate base salary being paid
to the Employee at the date of termination, from the date of termination until
the end of the Term which amount shall be payable in a lump sum on the date of
such termination, and (ii) continuation of all of the benefits as provided in
Sections 4.2, 4.3 and 8 until the end of the Term. In addition to the foregoing,
the Employee shall be entitled to the Severance Benefits described in Section
6.1(a) and (b) and 6.2.
(b) "Change of Control" shall mean, if any person, or any two or
more persons acting a "group", (as defined in the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and all affiliates of such person or
persons, who prior to such time "beneficially" owned (as defined in Rule 13d-3
under the Exchange Act) less than 50% of the then outstanding Common Stock or
Preferred Stock of the Corporation, shall acquire additional shares of Common
Stock or Preferred Stock of the Corporation in one or more transactions or
series of transactions, such that following such transaction or transactions,
such person or group and affiliates beneficially own 50% or more of the Common
Stock outstanding or 50% or more of the voting power of the Corporation.
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8. REIMBURSEMENT OF EXPENSES. The Corporation shall reimburse Employee
for all reasonable business expenses paid or incurred by him on behalf of the
Corporation, including, but not limited to, travel and entertainment expenses,
that he shall incur during the Term in connection with the performance of his
duties hereunder; provided that he submits, in a timely manner, receipts or
other expense records in such detail as may be required by the Corporation.
9. NO CONFLICTING COMMITMENTS. Employee represents and warrants that he
has no commitments or obligations of any kind whatsoever inconsistent with this
Agreement which would impair, infringe upon or limit his ability to enter into
this Agreement or to perform the services required of him hereunder.
10. PROPRIETARY INFORMATION; NON-COMPETITION.
10.1 Prior to the execution of this Employment Agreement, Employee
has signed a Proprietary Information Agreement the terms of which shall continue
in full force and effect.
10.2 During the Term of this Agreement and until one year following
the termination, expiration, or nonrenewal of this Agreement, the Employee shall
not in any way compete with the business of the Corporation. In furtherance
thereof, during the period described in the preceding sentence, the Employee
shall not become a stockholder, director, employee, consultant, agent or
representative of any person, firm or entity whose business is competitive with
the business of the Corporation; provided that the foregoing shall not preclude
the Employee from owning less than 5% of the stock or other securities of any
person, firm or entity whose business is competitive with the business of the
Corporation.
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11. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. During the Term and
for at least two years after (i) the end of the Term or (ii) earlier termination
or expiration of the Agreement or retirement of the Employee, whichever of (i)
or (ii) last occurs, the Company shall, at its sole cost and expense, procure
for the benefit of the Employee, directors' and officers' liability in an amount
of at least $5 million and with terms and conditions substantially similar to
the terms of such insurance in effect on the date hereof.
12. ENTIRE AGREEMENT. This Agreement embodies the entire understanding
and agreement of the parties hereto in relation to the subject matter hereof,
and no promise, condition, representation or warranty, express or implied, not
herein set forth shall bind any party hereto. None of the terms and conditions
of this Agreement may be changed, modified, waived or cancelled orally or
otherwise except in a writing signed by both the parties hereto, specifying such
change, modification, waiver or cancellation. A waiver at any time of compliance
with any of the terms and conditions of this Agreement shall not be considered a
modification, cancellation or waiver of such terms and conditions of any
preceding or succeeding breach thereof unless expressly so stated. The
Employment Agreement dated as of March 11, 2000, as amended, is hereby
terminated.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and assigns.
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14. GOVERNING LAW; FEES. This Agreement shall be governed by the
internal laws of the State of New Jersey without regard to principles of
conflicts of law. In the event of any litigation relating to the terms of this
Agreement, the prevailing party shall be awarded all of its fees and expenses in
pursuing or defending such litigation, including all reasonable attorney's fees
and expenses.
15. NOTICES. Any notice or other communication required or desired to
be given shall be in writing and shall be sent by registered or certified mail
return receipt requested or by express mail. Each such notice shall be deemed
given at the time it is mailed in any post office maintained by the United
States, postage pre-paid, to the following respective addresses, which either
party may change as to such party upon ten (10) days' notice to the other.
To the Corporation:
Interactive Systems Worldwide Inc.
0 Xxxxxxx Xxxxx, 0xx Xx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
00xx Xx
Xxx Xxxx, XX 00000
To Employee:
Xx. Xxxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxxx, XX 00000
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16. EXTRAORDINARY RELIEF. Employee acknowledges and agrees that
irreparable damage will result to the Corporation in the event of a breach of
the Proprietary Information Agreement or Section 10 of this Agreement.
Accordingly, Employee agrees that the Corporation shall be entitled to enforce
its rights under said Proprietary Information Agreement and Section 10 of this
Agreement, in the event of a breach or threatened breach thereof, in the court
of equity, and shall be entitled to a decree of specific performance or
appropriate injunctive relief. Such remedies shall be cumulative and not
exclusive and shall be in addition to any other rights or remedies available to
the Corporation.
17. INVALIDITY. Any provision of this Agreement found to be prohibited
by law shall be ineffective as written without invalidating the remainder of
this Agreement and shall be deemed amended to the fullest extent allowable by
applicable law to effectuate the purposes of said provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INTERACTIVE SYSTEMS WORLDWIDE INC.
By: /s/ Xxxxxxx Xxxxxxxx
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President
EMPLOYEE:
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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