EMPLOYMENT AGREEMENT
AGREEMENT made as of the 22nd day of May, 1995 between International
Sports Wagering Inc., a Delaware corporation (the "Corporation"), and Xxxxx
Xxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, the Corporation is in the business of developing, producing,
marketing, licensing and servicing computerized sports wagering systems; and
WHEREAS, the Corporation desires to employ Employee as its President and
Chief Executive Officer and Employee desires to serve the Corporation in such
capacity:
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 President and Chief Executive Officer
and Employee hereby agrees
to serve the Corporation in such capacity.
2. DUTIES.
(a) 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 of Directors of the Corporation, acting reasonably, shall assign or
direct consistent with his status and position as President and
Chief Executive Officer, including, without limitation, such duties as would
typically be performed by persons holding similar positions in other companies.
(b) Employee shall conduct himself at all times in a manner
consistent with his position with the Corporation.
3. TERM
(a) The term of Employee's employment (the "Term") shall commence as
of May 22, 1995, and shall terminate on June 30, 1998, subject to earlier
termination only (i) in the event of Employee's death; (ii) at the option of the
Corporation, in the event of 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; or (iii) for cause.
(b) 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.
4. COMPENSATION AND BENEFITS. As compensation for all duties 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 normal payroll practice of the Corporation:
4.1 During the first year of the Term, the Employee shall receive no
base salary; during the second and third years of the Term, the Employee shall
receive a base salary of not less
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than $115,000 per annum, unless otherwise approved by 80% of the Board of
Directors of the Corporation.
4.2 In addition, Employee shall be entitled to receive (a) such
salary increases, bonuses or other incentive compensation as may be approved by
80% of the Board of Directors; (b) three weeks vacation during each year of the
Term; (c) such health insurance as the Corporation may from time to time provide
to its other executive employees; provided, however that until such time as the
Corporation has instituted a health insurance plan for all of its employees it
shall reimburse Employee up to a maximum of $700 per month for his actual out of
pocket cost of family health insurance coverage including the premiums for such
health insurance and any deductible or co-pay amount associated with such
insurance payable by Employee. Any portion of such $700 per month that is not
paid to Employee during any particular month shall be reimbursable to Employee
in a succeeding month, provided that the total amount reimbursable to Employee
per annum during the Term shall not exceed $8,400; (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.
5. REQUIRED RELOCATION.
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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 after the Term of this Agreement and prior to
July 1, 2000, 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 leave the employ of the Corporation and in such event the
Corporation shall pay to the Employee an amount equal to six month's base
salary, (at the employee's base salary at the time of termination) (the
"Severance Amount"). The Severance Amount shall be paid to the Employee in six
equal monthly installments commencing on the first day of the month immediately
following such termination.
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 for the Corporation.
6. NON RENEWAL OF EMPLOYMENT AGREEMENT
In the event that at the end of the Term of this Agreement, the
Agreement is not renewed or a new Agreement is not entered into, and thereafter,
but prior to July 1, 2000, the Employee's employment with the Corporation is
terminated by the Corporation other than for cause, or due to the death or
disability of the Employee, the Corporation shall pay to the Employee the
Severance Amount in the manner provided in Section 5.2.
7. CHANGE OF CONTROL:
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7.1 In the event of a "Change of Control" (as hereafter defined)
following which the Employee's employment is terminated (a) by the Corporation
other than as a result of the death or disability of the Employee or for cause,
or (b) by the Employee for "Good Reason" (as hereinafter defined) the Employee
shall be entitled to the following:
(a) If the termination is during the Term, the Employee shall be
entitled to continued payment of his base compensation and benefits as provided
in Section 4 until the end of the Term, but in no event less than six months of
base salary and benefits.
(b) If the termination occurs after the Term but prior to July 1,
2000, the Employee shall be entitled to the Severance Amount payable in the
manner provided in Section 5.2.
(c) "Change of Control" shall mean, if any person, or any two or
more persons acting a group, and all affiliates of such person or persons, who
prior to such time beneficially owned (as defined in Rule 13d-3 under the
Securities and Exchange Act of 1934 (the "Exchange Act") less than 50% of the
then outstanding Common Stock of the Corporation, shall acquire additional
shares of Common Stock 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.
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(d) "Good Reason", when used with reference to a voluntary
termination by the Employee of his employment with the Corporation, shall mean:
i) the assignment to the Employee of any duties inconsistent
in a material way with, or the reduction of powers or functions associated
with, his positions, duties, responsibilities and status with the
Corporation, Employee's reporting responsibilities or any removal of the
Employee from or any failure to reelect the Employee to any significant
positions or offices the Employee held immediately prior to the time of
the Change in Control, except in connection with the termination of the
Employee's employment by the Corporation for Cause or for Death or
Disability;
ii) a reduction by the Corporation in the Employee's base
salary or benefits that existed immediately prior to the Change in
Control;
iii) a change in the Employee's principal work location,
except for required travel on the Corporation's business to an extent
substantially consistent with the Employee's business travel obligations
immediately prior to the Change of Control; provided, however, that no
event shall constitute a Good Reason unless the Employee notifies the
Corporation that it has committed an action or inaction specified in
clauses (i) through (iii) (a "Covered Action") and the Corporation does
not cure such Covered Action within 30 days
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after such notice, at which time such Good Reason shall be deemed to have
arisen. Notwithstanding the immediately preceding sentence, no action by the
Corporation shall give rise to a Good Reason if it results from the Employee's
termination for Cause, Disability or death or from the Employee's resignation
for other than a Good Reason. If the Employee has a Good Reason to resign, he
may in fact resign for a Good Reason by notice of termination given within 60
days after the Good Reason arises.
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. Simultaneous with the execu- tion of this
Employment Agreement, Employee agrees to sign the Proprietary Information
Agreement attached hereto as Exhibit A.
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11. 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.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respec- tive legal representatives,
successors and assigns.
13. GOVERNING LAW. This Agreement shall be governed by the internal laws
of the State of New Jersey without regard to principles of conflicts of law.
14. 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.
To the Corporation:
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International Sports Wagering Inc.
00 Xxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx (00xx Xxxxx)
Xxx Xxxx, Xxx Xxxx 000000
To Employee:
Xx. Xxxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxxx, XX 00000
15. 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. Accordingly, Employee agrees that the
Corporation shall be entitled to enforce its rights under said Proprietary
Information 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.
16. 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.
INTERNATIONAL SPORTS WAGERING INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, President
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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