EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 30 day of November, 2004, by and
between ZONE4PLAY LTD., a company incorporated under the laws of the State of
Israel and maintaining its principal place of business at 0X Xxxxxxxxx Xxxxxx,
Xxx Xxxx, 00000 Xxxxxx (the "COMPANY") and Xxxx Xxxxxx, Israeli I.D. number
028771749, residing at 00 Xxxxxxxx Xx. Xxx Xxxx, Xxxxxx (the "EXECUTIVE").
WHEREAS: The Company is in the business of developing, on a contractual basis,
casino game applications for internet, portable devices and
interactive TV platforms; and
WHEREAS: The Company desires to employ the Executive as the Senior Vice
President of Marketing and sales of the Company, who in the scope of
his duties will be in charge of the activities listing in appendix A,
and the Executive represents that he has the requisite skill and
knowledge to serve as the Senior Vice President of Marketing and sales
of the Company subject to the terms and conditions contained herein
and he desires to engage in such employment, according to the terms
and conditions hereinafter set forth
NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, the parties agree as follows:
1. EMPLOYMENT
(a) The Company agrees to employ the Executive and the Executive agrees
to be employed by the Company on the terms and conditions set out in
this Agreement.
(b) The Executive shall be employed as Vice President for marketing and
sales of the Company. The Executive shall perform the duties,
undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by persons situated
in a similar capacity, subject to the direction of the Chief
Executive Officer (the "CEO"). The Executive shall report regularly
to the CEO with respect to his activities. The employee will
dedicate at least 186 monthly hours to the fulfillment of his
obligations under this agreement.
(c) Excluding periods of vacation, sick leave and military reserve
service to which the Executive is entitled or required, the
Executive agrees to devote his full working time and attention to
the business and affairs of the Company and its subsidiaries as
required to discharging the responsibilities assigned to the
Executive hereunder. During the term of this Agreement, the
Executive shall not be engaged in any other employment nor engage
actively in any other business activities or in any other activities
which may hinder his performance hereunder, with or without
compensation, for any other person, firm or company without the
prior written consent of the Company.
(d) This Agreement is a personal services agreement governing the
employment relationship between the parties hereto. This Agreement
shall not be subject to any general or special collective employment
agreement relating to executives in any trade or position that is
the same or similar to the Executive's, unless specifically provided
herein.
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(e) The Executive's position, duties and responsibilities hereunder
shall be in the nature of management duties that demand a special
degree of personal loyalty and the terms of Executive's employment
hereunder shall not permit application to this Agreement of the Law
of Work Hours and Rest 5711 - 1951. Accordingly, the statutory
limitations of such law shall not apply to this Agreement. The
Executive shall not be entitled to additional compensation from the
Company for working additional hours or working on holidays or
Sabbaths, as required by the Company.
2. BASE SALARY
(a) The Company agrees to pay to the Executive As of September 1, 2004
Agreement a gross salary of 20,000 New Israeli Shekels ("NIS") per
month (the "BASE SALARY").
(b) The Base Salary shall be payable monthly in arrears, no later than
the 10th day of each month. and will be payable subject to the
attendance card.
(c) Both parties agree that the next salary review will be done by May
1st 2005.
In addition to the Base Salary, the Executive shall also be entitled to
the following benefits:
(a) Sick Leave. The Executive shall be entitled to fully paid sick leave
pursuant to the Sick Pay Law 5736 - 1976.
(b) Vacation. The Executive shall be entitled to an annual vacation of
16 working days per year. Vacation may be accumulated for a maximum
of 3 years.
(c) Convalescence Payments. The Executive shall be entitled to annual
payments for convalescence in an amount equal to the amount required
by law linked to the cost of living on the date of this Agreement.
(d) Vehicle. For the purpose of performing his duties under this
Agreement, the Company shall furnish the Executive with a Company
owned/leased vehicle. The Company will bear all expenses related to
the vehicle maintenance and operation, including licensing,
insurance, fuel (up to NIS 800 per month for fuel expenses.) and
maintenance fees. The Company will withhold the taxes required by
law out of the Executive's salary in accordance with the type of
vehicle he is furnished with. The Executive shall operate the
vehicle with due care and diligence and in accordance with the
Company's then current regulations and practices. The Executive
shall also bear any costs and expenses due to parking tickets
incurred during his use of the vehicle. In addition, the Executive
shall be required to bear the cost of any deductible amount under
the applicable insurance policy with respect to the vehicle, in the
event of submission of an insurance claim under such policy. In no
event will the Executive be entitled to retain or withhold the
vehicle in connection with a claim against the Company.
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(e) Manager's Insurance Policy. The Company shall insure the Executive
under an accepted "Manager's Insurance Scheme" ("Bituach Menahalim")
as shall be customary with the Company and/or a comprehensive
financial arrangement, at the Company's discretion, including
insurance in the event of illness of loss of capacity for work
(hereinafter referred to as the "MANAGERS INSURANCE") as follows;
(i) the Company shall pay an amount equal to 5% of the Executive's
Base Salary towards the Managers Insurance in respect of pension and
life insurance for the Executive's benefit, and shall deduct 5% from
the Executive's Base Salary and pay such amount towards the Managers
Insurance for the Executive's benefits; (ii) the Company shall pay
an amount up to 2.5% of the Executive's Base Salary towards
disability insurance; and (iii) the Company shall pay an amount
equal to 8 1/3 % of the Executive's Base s Salary towards a fund for
severance compensation. Should the provisions made for severance pay
fail to cover the amount due by the Company to Executive in
accordance with the law, then the Company shall pay Executive the
difference, all in accordance with applicable said Israeli law.
(f) Education Fund. Beginning on November 1st 2004, the Company and the
Executive shall open and maintain an Education Fund ("Keren
Hishtalmut") ("EDUCATIONAL FUND"), as customary with the Company,
recognized as such by the Israeli tax authorities. The Company shall
contribute to such Education Fund, which shall be maintained in the
name of the Executive, the full amount equal to 7.5% of each monthly
Base Salary payment. The Executive shall contribute to the
Educational Fund the full amount equal to 2.5% of each monthly Base
Salary payment.
(g) Business Expenses. The Company will reimburse Executive for any
documented, out-of-pocket expenses from time to time properly
incurred by Executive in connection with his employment by Company.
(h) Cellular Phone. The Company shall provide to the Executive a
cellular telephone, at the Company's sole cost and expense. The
company will bear expenses related to the Cellular Phone up to NIS
300 per month, excluding working telephone calls. The phone xxxx of
executive will be checked once a month. The company will take into
consideration the executive position and special phone usage needs
given the high frequency of the travel out of the country. Upon
termination of employment of the Executive by the Company or
termination of employment by the Executive, under circumstances
entitling the Executive to severance payments under the law, the
Executive shall be entitled to continued use of the cellular phone
until the end of the Notice Period.
(h) Sales commissions. Executive will be entitled to a quarterly sales
commission based on the quarter revenues of the Company. Within Ninety
(90) days of the end of each quarter as of first quarter of 2005, the
Company will pay Executive an amount equal to 0.6% of the Company's
quarter gross revenues (including 100% of the revenues of MiX TV). The
commission for 2006 will be calculated in excess of 1.25 million $US per
quarter or the 2005's gross revenues (the lower of the two).This
sub-section shall be effective and binding upon the Company throughout the
term of this Agreement and for an additional period of 12 months
thereafter.
(i) Reserve Military Service. The Executive shall be entitled to payment of
his Full Salary for periods in which the Executive is called for reserve
military service, provided that the Executive obtains for the Company
approval to receive the payments due from the Social Security Institute.
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(j) Tax Withholding. All of the amounts stated in this Agreement are gross
amounts and the Company shall withhold the appropriate amounts for income
tax purposes as required by law.
(l) Options. The Company will grant the Executive an option to purchase the
number of ordinary shares (the "Shares") of the Company set forth below
(the "Options"), out of the Company's authorized capital, at the
respective Purchase Prices set forth below, on the terms and subject to
the conditions hereinafter provided:
1. An Option to purchase 200,000 Shares of Zone4Play Inc. at a
purchase price per Share of US$ 0.55 (reflecting a discount of 15%
of the price per share on May 1st, the first working day of the
executive). The Option will be subject to the following vesting
periods:
1/8 of such Shares will vest on July 1st 2004
1/8 of such Shares will vest on October 1st 2004
1/8 of such Shares will vest on January 1st 2005
1/8 of such Shares will vest on April 1st 2005
1/8 of such Shares will vest on July 1st 2005
1/8 of such Shares will vest on October 1st 2005
1/8 of such Shares will vest on January 1st 2006
1/8 of such Shares will vest on April. 1st 2006
In case that Zone4Play inc. will be sold or merged within the
vesting period, all the options will be immediately fully vested.
2. If Zone4Play Inc's gross revenues exceed $5 million during the
calendar year 2005, a fully vested Option to purchase 90,000
Zone4Play Inc. Shares at a purchase price per Share reflecting fair
market value at the day of the grant.
2.1 If Zone4Play Inc's gross revenues exceed $6 million during
the calendar year 2005, a fully vested Option to purchase
additional 18,000 Zone4Play Inc. Shares at a purchase price
per Share reflecting fair market value at the day of the
grant.
2.2 If Zone4Play Inc's gross revenues exceed $7 million during
the calendar year 2005, a fully vested Option to purchase
additional 18,000 Zone4Play Inc. Shares at a purchase price
per Share reflecting fair market value at the day of the
grant.
2.3 If Zone4Play Inc's gross revenues exceed $8 million during
the calendar year 2005, a fully vested Option to purchase
additional 18,000 Zone4Play Inc. Shares at a purchase price
per Share reflecting fair market value at the day of the
grant.
2.4 If Zone4Play Inc's gross revenues exceed $9 million during
the calendar year 2005, a fully vested Option to purchase
additional 18,000 Zone4Play Inc. Shares at a purchase price
per Share reflecting fair market value at the day of the
grant.
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2.5 If Zone4Play Inc's gross revenues exceed $10 million
during the calendar year 2005, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant.
In the case that Zone4Play Inc. will be sold or merged based on $100
Million valuation and above before March 31st 2006, The Executive
will be entitled to the 180,000 options to purchase Zone4Play Inc.
Shares (as described in section 2.1-2.5 ) at a purchase price per
Share reflecting fair market value at the day of the grant,
regardless of the gross revenues during 2005.
3. In addition to section (2) above, if Zone4Play Inc's gross
revenues exceed $10 million during the calendar year 2006, a fully
vested Option to purchase 90,000 Zone4Play Inc Shares with a
purchase price of per Share reflecting fair market value at the day
of the grant.
3.1 If Zone4Play Inc's gross revenues exceed $12 million
during the calendar year 2006, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant
3.2 If Zone4Play Inc's gross revenues exceed $14 million
during the calendar year 2006, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant
3.3 If Zone4Play Inc's gross revenues exceed $16 million
during the calendar year 2006, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant
3.4 If Zone4Play Inc's gross revenues exceed $18 million
during the calendar year 2006, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant
3.5 If Zone4Play Inc's gross revenues exceed $20 million
during the calendar year 2006, a fully vested Option to
purchase additional 18,000 Zone4Play Inc. Shares at a purchase
price per Share reflecting fair market value at the day of the
grant
In the case that Zone4Play Inc. will be sold or merged based on $200
Million valuation and above before March 31st 2007, The Executive will be
entitled to the 180,000 options to purchase Zone4Play Inc. Shares (as
described in section 3.1-3.5 ) at a purchase price per Share reflecting
fair market value at the day of the grant, regardless of the gross
revenues during 2006.
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4. TERMINATION
(a) Either party may terminate this Agreement and the employee-employer
relationship between the Executive and the Company at any time upon
thirty (30) days (the "NOTICE PERIOD") written notice to the other
party specifying the effective date of termination (the "TERMINATION
DATE").
(b) During such Notice Period following termination of this Agreement by
the Company, the Executive shall be entitled to compensation
pursuant to Section 2 and to all of the benefits set forth in
Section 3. During such Notice Period following termination of this
Agreement by the Executive, the Executive shall be entitled to
compensation pursuant to Section 2.
(c) During the Notice Period, the Executive shall transfer his position
to his replacement in an orderly and complete manner and shall
return to the Company all documents, professional literature and
equipment belonging to the Company, which may be in his possession
at such time.
5. COMPETITIVE ACTIVITY
During the term of this Agreement and for a period of twelve (12)
months from the Termination Date of this Agreement, the Executive
will not directly or indirectly:
(i) Carry on or hold an interest in any company, venture, entity
or other business (other than a minority interest in a
publicly traded company) which directly competes with the
products or services of the Company or its subsidiaries,
including those products or services contemplated in a plan
adopted by the Board of Directors of the Company or its
subsidiaries (a "COMPETING BUSINESS");
(ii) Act as a consultant or executive or officer or in any
managerial capacity in a Competing Business or supply in
competition with the Company or its subsidiaries services
("RESTRICTED SERVICES") to any person who, to his knowledge,
was provided with services by the Company or its subsidiaries
any time during the six (6) months immediately prior to the
Termination Date;
(iii) Solicit, canvass or approach or endeavor to solicit, canvass
or approach any person who, to his knowledge, was provided
with services by the Company or its subsidiaries at any time
during the six (6) months immediately prior to the Termination
Date, for the purpose of offering Restricted Services or
products which compete with the products supplied by the
Company or its subsidiaries at the Termination Date; or
(iv) Employ, solicit or entice away or endeavor to solicit or
entice away from the Company or its subsidiaries any person
employed by the Company or its subsidiaries any time during
the six (6) months immediately prior to the Termination Date
with a view to inducing that person to leave such employment
and to act for another employer in the same or a similar
capacity.
6. NOTICE
For the purpose 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 personally delivered or sent by registered mail,
postage prepaid, addressed to the respective addresses set forth below or
last given by each party to the other, except that notice of change of
address shall be effective only upon receipt.
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The initial addresses of the parties for purposes of this Agreement shall
be as follows:
The Company: 0X Xxxxxxxxx Xxxxxx, Xxx Xxxx, 00000 Xxxxxx
The Executive: 00 Xxxxxxxx Xxxxxx, Xxx Xxxx
0. MISCELLANEOUS
(a) No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
(b) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Israel.
(c) The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof. No agreement or
representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made either party which is
not expressly set forth in this Agreement.
(e) This Agreement shall be binding upon and shall inure to the benefit of the
Company, its successors and assigns, and the Company shall require such
successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken
place. The term "SUCCESSORS AND ASSIGNS" as used herein shall mean a
corporation or other entity acquiring all or substantially all the assets
and business of the Company (including this Agreement) whether by
operation of law or otherwise.
(f) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
(g) The provisions of Section 5 of this Agreement shall survive the rescission
or termination, for any reason, of this Agreement, and shall survive the
termination of the Executive's employment with the Company.
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(h) The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this
Agreement.
8. ENTIRE AGREEMENT
This Agreement constitutes the complete and exclusive agreement
between the Parties with respect to the subject matter hereof,
superseding and replacing any and all prior or contemporaneous
agreements, communications, and understandings, both written and
oral, regarding such subject matter. This Agreement may be amended
only by a written document signed by authorized representatives of
both Parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ZONE4PLAY LTD. XX. XXXX XXXXXX
/S/ XXXXXX XXXXXX /S/ XXXX XXXXXX
-------------------------------- ----------------------------------
BY: XXXXXX XXXXXX
TITLE: CHIEF EXECUTIVE OFFICER
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APPENDIX A - THE EXECUTIVE ROLE DEFINITION
As the Senior Vice President of Marketing and sales of the Company, Xx. Xxxx
Xxxxxx will be responsible for the following areas:
o All MARKETING ACTIVITIES, including Marketing writing, tradeshows,
proposals, brochures, website, PRs etc.
o All SALES ACTIVITIES, including the daily operation of all
prospects, managing of all the company's agent and marketing and
sales advisors around the world, operation of the current customer
base of the company etc.
o All BUSINESS DEVELOPMENT ACTIVITIES, including research activities,
the development of new markets for the company, new initiatives of
the company, new acquisitions etc.
o Managing all business development and Marketing PERSONAL (including
VP business development of the company), advisors, agents and any
other distribution channel of the company, all agents who operates
in the company's name, IR and PR firms etc.
o Co Handle the daily operation the PR AND IR activities with the
company's CFO, including press releases, Company profile and
presentations, IR Kit etc.
o In charge of the STRATEGIC PLANNING for the Company and the on going
operation of such planning
As the Senior Vice President of Marketing and sales of the Company, Xx. Xxxx
Xxxxxx will not be involved (unless a direct request from the company's CEO) in
the following areas:
o Any new financial round
o IPO or secondary rounds
o Israeli PR
REPORTS ISSUES:
o Xx. Xxxxxx reports to the company's CEO
o All business development and Marketing PERSONAL (including VP
business development) reports solely to Xx. Xxxxxx.
