AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is made and
entered into this 8 day of January, 2001 between m-Wise, Inc., a company
originally formed under the name Wireless Auctions, Inc and existing under the
laws of the state of Delaware U.S.A. (hereinafter, the "Company"), and Shay Xxx
Xxxxxx (Israeli I.D. No. 023844087) of 00 Xxxxx Xx. Xxx Xxxx, Xxxxxx, (the
"Employee"). WHEREAS, the Company and the Employee are parties to an employment
agreement dated April 1, 2000 (the "Old Employment Agreement"); WHEREAS,
E-Street International AG. and D.E.P. Technology Holdings, Ltd. (or any
subsidiary of them, any entity into which either of them shall merge or any
subsidiary of such entity) (the "Investors") and the Company are parties to a
purchase agreement of even date herewith (the "Purchase Agreement") pursuant to
which the Investors are purchasing shares of Series B preferred stock, par value
$0.01 per share (the "Series B Preferred Stock"), of the Company and warrants to
purchase shares of Series B Preferred Stock; WHEREAS, it is a condition
precedent to the transactions contemplated by the Purchase Agreement that
simultaneously with the closing of the transactions contemplated therein, the
Company and the Employee amend the terms of the Old Employment Agreement by
entering into this Agreement; WHEREAS, the Company desires to continue the
employment of the Employee on the terms and conditions herein set forth, and the
Employee desires to accept such employment on the terms and conditions herein
set forth.; and WHEREAS, the Employee agrees to render the services hereunder
subject to and in accordance with the provisions hereof. NOW, THEREFORE, in
consideration of the mutual promises set forth herein and mutual benefit to be
derived therefrom the parties hereby agree as follows: 1. Employment 1.1. The
Employee shall serve as Chief Executive Officer of the Company, and shall be
directly subject to the Board of Directors of the Company (the "Board"), or to
any person designated by the Board (the "Supervisor"). 1.2. During the term of
this Agreement and unless and until otherwise agreed, the Employee shall be
employed on a full time basis. The Employee shall devote all of his business
time, attention and efforts to the performance of his duties and
responsibilities under this Agreement. 2. Warranties The Employee represents and
warrants that: 2.1. During the period of his employment he shall perform
faithfully the duties assigned to him hereunder and as may be assigned to him
from time to time by the Supervisor, to the best of his ability, and to devote
his full and undivided business time to the transaction of Company's business
and not to engage in any other business activities other than at the direction,
or with the written approval of the Board. 2.2. He shall inform the Company,
immediately upon becoming aware of every matter in which he or a member of his
immediate family has
a personal interest or which might create a conflict of interests with his
duties under his employment. 2.3. Without the Company's written consent, during
the term of his employment, he shall not engage, employ or initiate, directly or
indirectly, in any other compensatory job, business, employment or other
business related involvement, except his employment under this Agreement. Every
professional activity not under the Company's employment shall be reported to
the Company and require its consent. 2.4. The execution and delivery of this
Agreement and the fulfillment of the terms hereof will not constitute a default
under or breach of any agreement or other instrument to which he is a party or
by which he is bound, including without limitation, any confidentiality or non
competition agreement, and does not require the consent of any person or entity.
2.5. He shall not utilize, during the term of his employment any proprietary
information of any of his previous employers. 2.6. In carrying out the duties
under this Agreement, he shall not make any representations, or give any
guaranties on behalf of the Company, except as authorized to do. 3. Term and
Termination of Employment 3.1. The term of the Employee's employment shall
commence on the date hereof for an initial period of 36 months and then renewed
for an unlimited time, unless terminated earlier by either Party as set forth
below. 3.2. Each party may terminate this Agreement by giving the other party
ninety (90) days prior written notice. The Company may choose to pay Employee
three (3) months Salary (as defined below) in lieu of giving him prior written
notice. Upon termination of the employment relationship pursuant to this Section
3.2, the Company shall have no further obligation or liability other than the
Salary earned under this Agreement prior to the date of termination, and any
accrued but unused vacation. 3.3 Notwithstanding anything else to the contrary
herein, the Company may terminate this Agreement at any time, effective
immediately and without need for prior written notice, for Cause, (as defined
herein). For the purposes hereof, the term "Cause" includes, but is not limited
to: (i) breach by the Employee of any of his obligations pursuant to Section 2
of this Agreement or of any other material provision of this Agreement, (ii)
breach by the Employee of any of his obligations pursuant to Exhibit A of this
Agreement (M-Wise USA Employee Proprietary Information and Inventions
Agreement); (iii) Employee's fraud, felonious conduct or dishonesty; (iv)
Employee's conviction of any felony; (v) Employee's embezzlement of funds of the
Company or conduct which caused grave injury to the Company, monetarily or
otherwise; (vi) Employee's insubordination, incompetence, moral turpitude, other
misconduct of any kind, gross negligence in the performance of his duties
hereunder; or (vii) Employee's refusal to perform his duties and
responsibilities for any reason other than illness or incapacity. In the event
the Company terminates Employee's employment with "Cause," the Company shall
have no further obligation or liability other than the Salary earned under this
Agreement prior to the date of termination, and any accrued but
unused vacation.
For the purposes of this Agreement "Good Reason" shall be defined as : (i) a
significant and material reduction of the Employee's duties or responsibilities
as an employee, not for Cause, which occurs without Employee's express written
consent or approval; (ii) the Company commences in the process of bankruptcy or
similar proceeding, liquidation or dissolution; (iii) the Company's breach of
any material provision of this Agreement which remains uncured 60 days after
having received written notice of such breach from Employee; (iv) force major;
(v) death or Disability of the employee; or (vi) death or severe mental
disability or severe physical disability of any of the Employee's immediate
family as a result of which Employee remains absent from work for a period of
six (6) successive months, or an aggregate of six (6) months in any twelve (12)
month period. Disability shall occur upon the end of such six-month period. The
term "Disability" shall mean any physical or mental illness or injury as a
result of which Employee remains absent from work for a period of six (6)
successive months, or an aggregate of six (6) months in any twelve (12) month
period. Disability shall occur upon the end of such six-month period. 3.4
Notwithstanding anything to the contrary in Section 3.3 above, the Company may
immediately cease the Employee's employment without "Cause," provided, however,
that Employee shall be entitled to a severance payment equal to six (6) months
Salary. As a condition of receiving this severance payment, Employee shall
execute and deliver to the Company a general release in a form acceptable to the
Company. 3.5 The Employee shall cooperate with the Company and use his best
efforts to assist with the integration into the Company's organization of the
person or persons who will assume the Employee's responsibilities.
4. Salary and Benefits
4.1. The Company shall pay the Employee as compensation for the employment
services provided by him pursuant to this Agreement a monthly gross salary of
$11,000 (the "Salary") payable in accordance with the Company's payroll
practices. For avoidance of doubt, the Salary is gross and includes all taxes
that may be imposed on such Salary. 4.2. The Company shall, at its expense,
provide medical insurance for the Employee, in an amount not exceeding $350 per
month and pursuant to terms determined by the Company. 4.3. The Company shall
reimburse the Employee for residence expenses incurred by the Employee up to the
amount of $3,000 per month. Additionally, the Employee shall be entitled to be
reimbursed for all normal, usual and necessary actual business expenses arising
out of travel, lodging, meals and entertainment whether in the UK or abroad,
provided Employee provides proper documentation post factum, in accordance with
the Company's policies. 4.4. Except as specifically set forth herein, the
Company shall withhold or charge the Employee with all taxes and other
compulsory payments as required under law in respect of, or resulting from,
the compensation paid to or received by him.
4.5 The Salary and additional benefits to which the Employee shall be entitled
hereunder shall be reviewed by the Board of Directors every 6 months. 5. Stock
5.1 Employee, directly or indirectly, in his individual capacity or in
connection with family members, holds, owns or has the right to acquire shares
of the Company's capital stock, or options, warrants or other rights to acquire
shares of the Company's capital stock (the "Employee Shares"). 5.2 Employee
hereby grants to the Company the right, which right shall become exercisable if
Employee's employment with the Company terminates to repurchase, at book value
(net of hidden reserves), a certain number of Employee Shares equal to the
product of (x) 20% of the Employee Shares owned or held by Employee on the date
of termination and (y) a fraction, the numerator of which is the difference
between thirty-six (36) months minus the number of full months of continuous
active employment actually completed by Employee with the Company, measured from
the date of execution of this Agreement, and the denominator of which is twelve
(12) (the "Repurchase Shares"). 5.3 The Repurchase Shares will vest in full and
the Company's repurchase right will lapse upon: (i) Employee's completion of
thirty-six (36) months of continuous active employment with the Company,
measured from the date of execution of this Agreement; or (ii) the consummation
of a firm commitment underwritten public offering by the Company of shares of
its Common Stock pursuant to a registration statement filed in the United States
under the Act or a public offering effected on the London Stock Exchange, the
Frankfurt Stock Exchange or the Paris Stock Exchange under applicable securities
laws, with a pre-money valuation in excess of $60,000,000 and which results in
aggregate cash proceeds to the Company of an amount equal to or greater than
$20,000,000, net of underwriting discounts and commissions; or (iii) the closing
of a consolidation, merger or reorganization of the Company with or into, or a
sale of all or substantially all of the Company's assets, or substantially all
of the Company's issued and outstanding share capital, to any other company,
other entity or person (other than a wholly owned subsidiary and excluding
mergers effected for the purpose of changing the domicile of the Company and
which do not affect the percentage equity interests of the securityholders of
the Company in and to the Company. If Employee's employment with the Company is
terminated without Cause," as defined in Section 3.3 above or Employee resigns
for "Good Reason" as defined in Section 3.3 above, the Repurchase Shares will
automatically vest in full and the Company's repurchase right will lapse. 6.
Other Company Policies The Employee agrees to comply with all policies of the
Company which are in effect from time to time. 7. Vacation The Employee shall be
entitled to 24 days paid vacation during each year of his employment. If the
Employee does not take the full vacation time in a given year, the time may be
accumulated and
carried forward up to a maximum number of forty (40) vacation days. The time may
be redeemed, in whole or partially, by the Employee. 8. Confidentiality;
Inventions; Non-Competition The Employee undertakes to comply with and to be
bound by the terms and conditions of the M-Wise USA Employee Proprietary
Information and Inventions Agreement attached hereto as Exhibit A. 9. Return of
Material All data, memoranda, notes and other information and material,
regardless of whatever medium on which the same may be stored, including all
copies and excerpts thereof, pertaining to work in connection with this
Agreement or the Employee's employment which may come into the Employee's
possession directly or indirectly from the Company, or developed by the Employee
at any time during the period of his employment, shall be delivered to the
Company upon request or in all events, upon termination of this Agreement. 10.
Governing Law This Agreement shall be governed by the laws of the State of New
York, USA as applied by the courts located within that state to contracts made
and performed entirely within such state. 11. Notices 11.1 All notices hereunder
will be in writing mailed registered or certified mail, postage prepared,
addressed to the parties at their respective addresses as set out in this
Agreement, or transmitted by cable, telex or facsimile or other reliable method
of transmission.
11.2 Notices will be deemed received by the receiving party within 7 (seven)
days of mailing, if mailed, when actually delivered by hand, if so delivered,
and on the Second business day (at the receiving end) following transmission if
transmitted by cable, telex or facsimile. 12. Successors and Assigns The
Employee's obligations hereunder are personal to the Employee, and he shall not
subcontract or assign this Agreement or any part hereof without the prior
express written consent of the Supervisor or the Board. Any such purported
subcontract or assignment without such consent shall be void. 13. Severability
In the event that any term, condition or provision of this Agreement shall be
finally adjudicated by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement shall be unaffected and shall
continue in full force and effect to the fullest extent permitted by law and
that such term, restriction, covenant or promise shall be deemed modified to the
minimum extent necessary to make it enforceable by such court or body. 14.
Counterparts This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 15. Headings Section headings herein
are for convenience and ease of reference only and shall in no way affect or be
deemed to affect the construction or interpretation of any provision hereof.
16. Entire Agreement and Amendment
16.1 Except as otherwise specifically provided for herein, this Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and contains all of the promises, undertakings, and other
representations made by the parties to each other prior to its execution, all of
which are merged herein. 16.2 This Agreement shall prevail over any prior
agreement, understanding, promise or undertaking of the parties, whether written
or oral, with respect to the subject matter hereof, all of which are merged
herein. No subsequent amendment to this Agreement will be of any effect unless
executed in writing and signed by all of the parties hereto. 16.3 This Agreement
shall not be amended, modified or varied by any oral agreement or representation
or otherwise than by written instrument executed by both parties or their duly
authorized representatives. 16.4 No failure or delay of either party in
exercising any power or right hereunder shall in any way restrict or diminish
such party's rights and powers under this Agreement, or operate as a waiver of
any breach or non-performance by either party of any of the terms or conditions
hereof. 16.5 If any provision of this Agreement (including any sentence, clause
or part thereof) shall be adjudicated to be invalid or unenforceable, such
provisions shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudicate is made. In addition, if any particular provision
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject it shall be construed by
limiting and reducing such provision as to such characteristic so that the
provision is enforceable to the fullest extent compatible with the applicable
law as it shall then appear.
IN WITNESS WHEREOF the parties affix their signatures hereto as of the date
first above written.
M-WISE, INC. SHAY XXX XXXXXX
Signature:___________________
Signature:_____________________
Name: _____________________
Title: _____________________
