EMPLOYMENT AGREEMENT
Exhibit
10.1
Amended
and Restated AGREEMENT made as of the 10th day of August, 2007, by and between
Interactive Systems Worldwide Inc., a Delaware corporation (the “Corporation”),
and Xxxxxxx Xxxxxxxx (“Employee”).
WITNESSETH:
WHEREAS,
the Corporation is in the business of developing, producing, marketing,
licensing and servicing computerized sports wagering and related software and
systems;
WHEREAS,
the Corporation desires to continue to employ Employee as its Chief Executive
Officer, President and Employee desires to serve the Corporation in such
capacity; and
WHEREAS,
the Corporation desires to provide certain benefits to the Employee upon
termination of this Agreement, as herein provided; and
WHEREAS,
the parties entered into an Employment Agreement dated as of June 19, 2007
and
desire to amend and restate the terms thereof.
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 President and Employee hereby agrees
to serve the Corporation in such capacity.
2. DUTIES.
2.1. Employee
agrees, during the “Term” (as hereinafter defined), to devote his full business
attention and best efforts to the business of the Corporation and to perform
such duties of an executive and administrative nature as the Board or Board
of
Directors of the Corporation, acting reasonably, shall assign or direct (i)
consistent with his status and position as Chief Executive Officer and President
including, without limitation, such duties as would typically be performed
by
persons holding similar positions in other companies, and (ii) such other duties
of a managerial nature relating to operations, finance, personnel or
support.
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”) pursuant to this Agreement shall commence
on July 1, 2007 and terminate on June 30, 2008; 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; (iv) on 60 days prior written notice by either the
Employee or the Corporation to the other; or (v) as provided in Sections 3.3
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 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.
4. COMPENSATION
AND BENEFITS.
As
compensation for all services to be rendered by Employee to the Corporation
and
its subsidiaries 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 $240,000 per annum (the
“Base Salary”).
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4.2. In
addition to the Base Salary, during the Term the Employee shall be entitled
to
receive incentive compensation as follows: Provided that Employee’s employment
with the Corporation has not terminated pursuant to Section 3.1(iii), or Section
7, for each $1 million of revenue realized by the Corporation and its
subsidiaries on a consolidated basis, as determined in accordance with generally
accepted accounting principles applied on a consistent basis (“Revenue”), the
Employee shall be entitled to a bonus of $30,000 up to a maximum bonus of
$120,000 if the Corporation realized Revenue of $4,000,000 during the
Term.
Commencing
with the Corporation’s quarter ending September 30, 2007 and with each of the
next three quarters through June 30, 2008, the Corporation will determine
whether the Corporation’s Revenue as of the end of such quarter meets or exceeds
the Revenue set forth above. If any such Revenue thresholds are met, the
Employee shall be paid the applicable Bonus promptly after the determination
that such Revenue threshold has been met.
4.3. 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) four weeks vacation during each year of the Term; (c) health
insurance and life insurance substantially similar to that provided to Employee
in the past and not less than those provided by the Corporation to its other
executive employees; (d) such other fringe benefits as the Corporation may
provide to its employees; and (e) at the Corporation’s expense, the use of a
leased automobile plus payment of all expenses of operating such automobile,
including but not limited to insurance and maintenance costs.
4.4. In
the
event that during the Term, the Employee’s employment is terminated as provided
in Section 3.1(i) (ii), (iv), or in Section 7, the Corporation shall (i)
continue to pay to the Employee of all benefits described in Sections 4.3 and
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until the end of the Term; and (ii) pay to the Employee the Severance
Benefits described in Section 6. In addition, in the event that during the
Term,
the Employee’s employment is terminated in accordance with Section 3.1(i), (ii)
or (iv) (but in the case of Section 3(iv) only if such employment is terminated
by the Corporation), or Section 7, the bonus to which the Employee shall be
entitled as provided in Section 4.2, shall be prorated in the following manner.
The revenue realized by the Corporation and its subsidiaries on a consolidated
basis from July 1, 2007 through the last day of the calendar month immediately
following the termination date of Employee’s employment with the Corporation
shall be annualized (“Annualized Revenue”). To the extent that the Annualized
Revenue realized by the Corporation exceeds $1 million, the Employee shall
be
paid a bonus equal to $30,000 for each $1 million of Annualized Revenue. For
example if the Employee’s employment was terminated on December 15, 2007, and
for the period from July 1, 2007 through December 31, 2007 revenue realized
by
the Corporation was $600,000, the Annualized Revenue would be $1,200,000 and
the
Employee’s bonus would be $30,000. The maximum bonus to which the Employee shall
be entitled shall be as provided in Section 4.2.
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5. INTENTIONALLY
OMITTED.
6. SEVERANCE
BENEFITS.
6.1. Upon
(a)
expiration or termination of the Term of this Agreement as provided in Section
3.1, other than for cause, (b) voluntary termination of Employee’s employment by
the Employee, or retirement of the Employee as provided in Section 3.3, or
(c)
if a new agreement is not entered into by Employee and the Corporation on the
terms and conditions described in Section 7.1, 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”) for a period of one year after
such termination:
(a) An
amount
equal to $300,000, payable in a lump sum on the date of such expiration,
retirement or termination; and
(b) Continuation
of the benefits provided in Section 4.3(c), (d), and Section 9, 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 4.3(e) 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 his Agreement.
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7. NON-RENEWAL
OF EMPLOYMENT AGREEMENT; DEATH OR DISABILITY.
7.1. In
the
event that at the end of the Term of this Agreement, a new employment agreement
is not entered into on terms and conditions at least as beneficial to the
Employee as each of the terms and conditions contained in the Agreement dated
as
of June 19, 2007 prior to this Amendment and Restatement, and the Employee’s
employment with the Corporation is terminated by the Corporation, other than
for
cause, or by the Employee, in his discretion, the Corporation shall pay to
the
Employee the Severance Benefits described in Section 6.
7.2. In
the
event this Agreement is terminated as a result of the death or disability of
the
Employee during the Term or, after the end of the Term while the Employee is
still employed by the Corporation on an at-will basis, the Employee or his
personal representative, as the case may be, shall be paid the Severance
Benefits described in Section 6.
8. INTENTIONALLY
OMITTED.
9. REIMBURSEMENT
OF EXPENSES.
The
Corporation shall reimburse the 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.
10. TERMINATION/STOCK
OPTIONS.
In the
event that Employee’s employment with the Corporation terminates for any reason
whatsoever, including death or disability of the Employee, other than by the
Corporation for cause, all stock options theretofore granted to the Employee
which have not vested and become exercisable on the date of such termination
shall automatically vest and become exercisable and remain exercisable in
accordance with the terms of the Corporation’s 1995, 1996 and 2006 Stock Option
Plans and the stock option agreements thereunder.
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11. 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.
12. PROPRIETARY
INFORMATION; NON-COMPETITION.
12.1. Prior
to
the execution of this Employment Agreement, Employee signed a Proprietary
Information Agreement the terms of which shall continue in full force and
effect.
12.2. During
the Term of this Agreement and until one year following the termination or
nonrenewal of this Agreement (except in the case of the Company entering into
any form of bankruptcy, insolvency or similar reorganization), the Employee
shall not in any way compete with the business of the Corporation. In
furtherance thereof (and subject to the exception referred to above), 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.
The
provisions of this Section 12.2 supersede any provision in any other agreement
between the Company and the Employee that is inconsistent with this
provision.
13. 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.
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14. 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 or 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 June 27, 2006, as amended, and the Employment Agreement dated as
of
June 19, 2007 is terminated effective as of the commencement of the term of
this
Agreement.
15. 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.
16. 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 legal fees and expenses.
17. 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 to the following
respective addresses, which either party may change as to such party upon ten
(10) days’ notice to the other.
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To
the
Corporation:
Interactive
Systems Worldwide Inc.
0
Xxxxxxx
Xxxxx, 0xx Xxxxx
Xxxx
Xxxxxxxx, XX 00000
Attn:
Chief Financial Officer
With
a
copy to:
Xxxxxxx
X. Xxxxxxx, Esq.
Xxxxxxxx
Xxxxxx Xxxxxx & Xxxxxxx LLP
0000
Xxxxxxxx (00xx Xxxxx)
Xxx
Xxxx,
XX 00000
To
Employee:
Xx.
Xxxxxxx Xxxxxxxx
00
Xxxxxxx Xxxxx
Xxxxxx,
XX 00000
18. 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 12 of this Agreement. Accordingly, Employee agrees that the Corporation
shall be entitled to enforce its rights under said Proprietary Information
Agreement and Section 12 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.
19. 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.
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INTERACTIVE
SYSTEMS WORLDWIDE INC.
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By:
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/s/
Xxxxx Xxxxxxx
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Xxxxx
Xxxxxxx, Director
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/s/
Xxxxxxx Xxxxxxxx
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Xxxxxxx
Xxxxxxxx
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