1st AMENDED & RESTATED EMPLOYMENT AGREEMENT
1st
AMENDED & RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDMENT OF APRIL 16, 2008 ("AMENDMENT") TO THAT CERTAIN EMPLOYMENT AGREEMENT,
dated
as
of April 30, 2007, (the "Original Agreement") by and Between
Green Screen Interactive Software, LLC (f/k/a Green Screen, LLC), a Delaware
limited
liability company with its offices at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
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("Executive").
WHEREAS,
the parties entered into the Original Agreement when the Company was a
startup
company;
WHEREAS,
the Company is now in the early stages of operations and has refined its
organizational
structure and business plans all of which require the Original Agreement to
be
amended
and restated in its entirety on the terms set forth below.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein
and for other good and valuable consideration, the parties agree as
follows:
1. Term
of Employment. Executive's
employment under the Original Agreement commenced
on April 30, 2007 (the "Commencement Date") and will currently expire on April
30,
2011
(the "Employment Term"). Subject to earlier termination pursuant to Section
7
hereof, the
Employment Term shall be automatically extended for additional terms of
successive one (1) year periods unless the Company or Executive gives written
notice to the other at least sixty (60) days
prior to the expiration of the then current Employment Term of the termination
of Executive's
employment hereunder at the end of such current Employment Term.
2. Positions.
(a) Executive
shall serve as the President of the Company but acknowledges that
organizational reorganization is contemplated and that his role may be converted
to that of a Vice
President of a discrete operational area and that any such change shall not
be
considered a demotion
or breach of this Agreement by the Company.
(b) The
Executive shall report to the Chief Executive Officer of the Company.
The Executive may be given such further reasonably related supervisory duties,
powers
and prerogatives as may be delegated to him from time to time by the Chief
Executive Officer.
(c) During
the Employment Term, Executive shall devote substantially all of his
business time and efforts to the performance of his duties hereunder; provided,
however, that Executive shall be allowed, to the extent that such activities
do
not materially interfere with the performance
of his duties and responsibilities hereunder, to lecture, publish, manage his
passive personal
investments, and to serve on corporate, civic, or charitable boards or
committees. Notwithstanding
the foregoing, Executive shall not serve on any corporate board of directors
if
such
service would be inconsistent with his fiduciary responsibilities to the
Company. The Company
specifically approves of Executive serving as a director of Qoop, Inc, Repliqa,
LLC, and
Serklin, Inc.
3. Base
Salary. During
the Employment Term and after the date of this Amendment,
the Company shall pay Executive a base salary at the annual rate of not less
than $250,000.
Base salary shall be payable in each case in accordance with the usual payroll
practices
of the Company. Executive's Base Salary shall be subject to annual review by
the
Board
in
December of each year and may be increased above the minimum from time to time
upon
recommendation of the Compensation Committee. The base salary as determined
as
aforesaid
from time to time shall constitute "Base Salary" for purposes of this Employment
Agreement.
4. Bonus.
Shall
be
$200,000 per annum, $100,000 based upon the Company's achievement
of its operating plan, and $100,000 based upon other milestones to be determined
by
the
Company's CEO. For 2008 targets are pre-set at aggregate raise of $25 million
of
equity with
a
bonus of $75,000 and $100,000 for the Company successfully achieving it
operating plan as
approved by its Board of Directors. $25,000 has been earned by the Executive
for
Quarter 1, 2008 for successfully completing financing/operating
objectives.
5. Employee
Benefits and Vacation.
(a) During
the Employment Term, Executive shall be entitled to participate in all pension,
retirement, savings, welfare and other employee benefit plans and arrangements
and fringe benefits and perquisites generally maintained by the Company from
time to time for the benefit of the senior executives of the
Company.
(b) During
the Employment Term, the executive shall receive an auto allowance
of Six Hundred ($600) dollars per month. To the extent permitted under
applicable law,
the
Company shall not treat as compensation to Executive fringes and perquisites
provided to
Executive or the items under Section 6 below.
(c) During
the Employment Term, Executive shall be entitled to vacation each year in
accordance with the Company's policies in effect from time to time but not
less
than four weeks
paid vacation. Executive shall also be entitled to such periods of sick leave
as
is customarily
provided by the Company for its senior executive employees.
6. Business
Expenses. The
Company shall reimburse Executive for the travel, entertainment
and other business expenses incurred by Executive in the performance of his
duties
hereunder, in accordance with the Company's policies as in effect from time
to
time.
7. Termination.
(a) The
employment of Executive under this Employment Agreement shall terminate
upon the occurrence of any of the following events:
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(i) the
death
of Executive;
(ii) the
termination of Executive's employment by the Company due to Executive's
Disability pursuant to Section 7(b) hereof;
(iii) the
termination of Executive's employment by Executive for Good Reason
pursuant to Section 7(c) hereof;
(iv) the
termination of Executive's employment by the Company without
Cause;
(v) the
termination of employment by Executive without Good Reason upon
not
less than thirty (30) days prior written notice;
(vi) the
termination of employment by Executive, with or without Good
Reason during the two year period commencing after the Change in Control as
defined in Paragraph 11 below (such period being referred to herein as the
"Change in Control Protection "Period");
(vii) the
termination of Executive's employment by the Company for Cause pursuant to
Section 7(e);
(b) Disability.
If
Executive is unable to carry out his material duties pursuant
to this Employment Agreement for more than ninety (90) days during any twelve
(12) month
period by reason of any physical or mental impairment, or suffers any medically
determined
physical or mental impairment that can be expected to result in death or that
can be expected to render the Executive incapable of performing his duties
to
the Company for ninety (90) days or more (a "Disability"),
the
Company may terminate Executive's employment for Disability, at any time, upon
not less than thirty (30) days prior written notice (a "Notice
of Disability Termination").
(c) Termination
for Good Reason. A
Termination for Good Reason means a termination
by Executive by written notice given within thirty (30) days after he becomes
aware of
the
occurrence of the Good Reason event. For purposes of this Employment Agreement,
"Good
Reason"
shall
mean any material breach by the Company of any provision of this Employment
Agreement which goes uncured for a period of thirty (30) days after the Company
receives a Notice of Termination for Good Reason.
(d) Notice
of Termination for Good Reason. A
Notice
of Termination for Good Reason shall mean a notice that shall indicate in
reasonable detail the facts and circumstances claimed
to provide a basis for Termination for Good Reason. The Notice of Termination
for Good
Reason shall provide for a date of termination not less than ten (10) nor more
than sixty (60)
days
after the date such Notice of Termination for Good Reason is given.
(e) Cause.
Subject
to the notification provisions of Section 7(f) below, Executive's
employment hereunder may be terminated by the Company for Cause. For purposes
of
this Employment Agreement, the term "Cause" shall be limited to:
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(i)
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the
refusal of Executive to follow the proper written direction of
the
Chief Executive Officer, provided that the foregoing refusal shall
not be "Cause" if Executive in good faith believes that such direction
is
illegal, unethical or immoral and promptly so notifies the
Board;
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(ii)
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failure
by Executive to perform the material duties required of him hereunder
(other than any such failure resulting from incapacity due
to physical or mental illness) which goes uncured for a period
of
ten (10) days after a written demand for performance is delivered
to Executive by the Chief Executive
Officer;
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(iii)
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Executive
being convicted of a felony (other than a felony involving
a motor vehicle);
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any
material breach of this Agreement by Executive that is not cured
(if curable) within ten (10) days of the Notice of Termination
for
Cause; or
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(v)
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Executive's
dishonesty, misappropriation or fraud with regard to the
Company (other than good faith expense account
disputes).
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(f) Notice
of Termination for Cause. A
Notice
of Termination for Cause shall mean
a
notice that shall indicate the specific termination provision in Section 7(e)
relied upon and shall set forth in reasonable detail the facts and circumstances
that provide for a basis for Termination
for Cause. The date of termination for a Termination for Cause shall be the
date
indicated
in the Notice of Termination.
8. Consequences
of Termination of Employment.
(a) If
Executive's employment is terminated during the Employment Term by reason
of
Executive's death, the employment period under this Employment Agreement shall
terminate
as of the date of death without further obligations to Executive's legal
representatives under
this Employment Agreement except for:
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(i)
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any
Base Salary or Bonus earned but not yet paid through the end of
the month of Executive's death;
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(ii)
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any
earned but unpaid Performance Bonus from a prior fiscal period;
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(iii)
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if
at the end of the fiscal year in which the termination occurred,
the
targets of the Performance Bonus for such year have been achieved,
then
the product of (A) the
Performance Bonus achieved, multiplied by (B) a fraction, the numerator
of
which is the number
of days of said fiscal year during which Executive was employed by
the
Company, and the
denominator of which is 365, which bonus shall be paid when bonuses
for
such period are paid
to the other executives;
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(iv)
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any
accrued vacation pay payable pursuant to the Company's policies
and any unreimbursed business expenses payable pursuant to Section
6 which
amounts shall
be promptly paid in a lump sum to Executive's
estate;
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(v)
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there
shall be full accelerated vesting of all outstanding options with
the
right to exercise such options continuing until the earlier of the
(A) the
option termination
date set forth therein, or (B) the one (1) year anniversary of the
date
the Executive's employment
terminated.
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(b) Disability.
If
Executive's employment is terminated by reason of Executive's
Disability, Executive shall be entitled to receive the payments and benefits
to
which his
representatives would be entitled in the event of a termination of employment
by
reason of his
death.
(c) Termination
by Executive for Good Reason or Termination by the Company
without Cause. If
the
Executive's employment is terminated by (i) the Executive for Good
Reason or (ii) the Company without Cause, the Executive shall be entitled to
receive:
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(i)
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all
of the benefits set forth in Section 8(a) above,
plus
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(ii)
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(A)
the sum of his Base Salary and the Bonus earned with respect to the
Employment Year preceding the Employment Year in which his employment
termination occurred
multiplied by (B) 1.5 (the "Severance Benefit"). The Severance Benefit
shall be payable
over an eighteen month period commencing on the first payroll date
following the termination
of employment in equal installments on the Company's normal payroll
dates
during said
eighteen month period, plus
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(iii)
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payment
by the Company of the premiums for Executive and his dependents'
health coverage for eighteen months under the Company's health plans
which
cover the
senior executives of the Company or materially similar benefits.
Payments
under this subsection
(iii) may at the discretion of the Company be made by continuing
participation of Executive
in the plan as a terminee, or by paying the applicable COBRA premium
for
Executive and
his dependents, or by covering Executive and his dependents under
substitute arrangements.
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(d) Termination
by the Company with Cause or Termination by the Executive without
Good Reason. If
Executive's employment hereunder is terminated (i) by the Company for
Cause, or (ii) by Executive without Good Reason, Executive shall be entitled
to
receive only his
Base
Salary through the date of termination and any unreimbursed business expenses
payable pursuant to Section 6.
(e) The
Company's obligation to provide the any payments pursuant to Paragraph
8 hereof is expressly conditioned upon the Executives' execution and delivery
to
the Company
of a release agreement, satisfactory to the Company, including, but not limited
to:
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(i)
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An
unconditional release of all rights to any claims, charges, complaints,
grievances, known or unknown to the Executive, through the date of
the
Executive's termination from
employment;
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(ii)
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A
representation and warranty that the Executive has not filed or assigned
any claims, charges, complaints, or grievances against the
Company;
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(iii)
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An
agreement not to use, disclose or make copies of any confidential
information of the Company, as well as to return any such confidential
information and
property to the Company upon execution of such
release;
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(iv)
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An
agreement to maintain the confidentiality of the
release;
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(v)
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A
reaffirmation of his restrictive covenant;
and
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(vi)
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An
agreement to indemnify the Company, in the event that the Executive
breaches any portion of such
release.
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9. No
Mitigation. In
the
event of any termination of employment under Sections 7(b) through
(d) inclusive, Executive shall be under no obligation to seek other employment
and there shall
be
no offset against any amounts due Executive under this Employment Agreement
on
account of any remuneration attributable to any subsequent employment that
Executive may obtain.
Any amounts due under Section 8 are in the nature of severance payments, or
liquidated damages, or both, and are not in the nature of a penalty. Such
amounts are inclusive, and in lieu of
any
amounts payable under any other salary continuation or cash severance
arrangement of the
Company and to the extent paid or provided under any other such arrangement
shall be offset from
the
amount due hereunder.
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10. Confidentiality/Noncompetition.
(a) The
Company and Executive acknowledge and agree that the services to be provided
by Executive pursuant to this Employment Agreement are unique and extraordinary
and,
as a
result of such employment, Executive will be in possession of Confidential
Information relating
to the business practices of the Company. The term "Confidential
Information"
shall
mean
any
and all information (verbal and written) relating to the Company or any of
its
affiliates, or
any of
their respective activities, other than general business practices not unique
to
Company but
commonly practiced in the interactive entertainment industry and such
information which can
be
shown by the Executive to be in the public domain or otherwise know to the
public other than
as a
result of a breach of this Section 10, including but not limited to information
relating to trade
secrets, personnel lists, financial information, research projects, services
used, pricing, customers,
customer lists and prospects, product sourcing, marketing, selling and
servicing. Employee agrees that he will not, during or after the termination
of
employment, directly or indirectly, use, communicate, disclose or disseminate
to
any person, firm or corporation any confidential
information of the Company acquired by Executive during his employment by
Company.
(b) Executive
agrees that he shall not, during the period of his employment and
for
one year thereafter, directly or indirectly take any action which constitutes
an
interference
with or a disruption of any of the Company's business activities, including
without limitation,
solicitations of the Company's customers or employees. For purposes of
clarification, but
not
of limitation, Executive acknowledges and agrees that the provisions of this
Section 10 shall
prohibit him from directly or indirectly hiring, offering to hire, enticing,
soliciting or in any manner
persuading or attempting to persuade any officer, employee, agent, lessor,
lessee, licensor,
licensee or customer who has been previously contacted by a representative
of
the Company,
including the Executive, to discontinue or alter his, her or its relationship
with the Company.
(c) Executive
agrees that he shall not, during the Employment Term and for a period
of
one (1) year thereafter directly or indirectly, alone or as a partner, joint
venturer, officer,
director, employee, consultant, agent, independent contractor, member or
stockholder of any
company or business, engage in any business activity which is directly or
indirectly competitive
with any of the products or services being developed, marketed, distributed,
planned, sold
or
otherwise provided by the Company or its subsidiaries at such time. The
ownership by the
Executive of not more than one percent of the shares of stock of any corporation
having a class
of
equity securities registered under the Securities Exchange Act of 1934, as
amended, shall not
be
deemed, in and of itself, to violate the prohibitions of this paragraph.
Notwithstanding the foregoing, in the event that Executive's employment is
not
renewed at the end of the Term by the Company,
the one year period set forth above shall not apply unless the Company pays
the
Executive
the sum of his Base Salary and the Bonus earned with respect to the Employment
Year preceding
the Employment Year in which the non-renewal occurred (the "Non-Renewal
Benefit").
The Non-Renewal Benefit shall be payable over a twelve month period commencing
on the first payroll date following the non-renewal of employment in equal
installments on the Company's
normal payroll dates during said twelve month period.
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(d) The
Executive recognizes that the Company would suffer irreparable damage
if
the Executive were to violate the provisions of this Section 10. In the event
the Executive
shall violate any of the terms or provisions of this Section 10, the Company
shall have, in addition to any and all remedies of law, the right to seek and
obtain, without bond or notice, ex
parte
or
after
a hearing, an injunction, specific performance or other equitable relief to
prevent the
violation of the Executive's obligations hereunder and in connection therewith
shall be entitled
to collect all reasonable costs and expenses of suit, including, but not limited
to, attorneys'
fees.
11. Change
in Control.
For
purposes of this Employment Agreement, the term "Change
in Control"
shall
be
deemed to have occurred on the earliest of the following dates:
(a) the
date
the owners of the Company (or the Board, if owner action is not required)
approve a plan or other arrangement pursuant to which the Company will be
dissolved or
liquidated; or
(b) the
date
the owners of the Company (or the Board, if owner action is not required)
approve a definitive agreement to sell or otherwise dispose of substantially
all
of the assets
of
the Company; or
(c) the
date
the owners of the Company (or the Board of Directors, if owner action
is
not required) have approved a definitive agreement to merge or consolidate
the
Company
with or into such other company, other than, in either case, a merger or
consolidation of
the
Company in which holders of Company's common equity immediately prior to the
merger or
consolidation will have at least a majority of the voting power of the surviving
company's voting
securities immediately after the merger or consolidation, which voting
securities are to be held
in
the same proportion as such holders' ownership of the common equity of the
Company immediately
before the merger or consolidation; or
(d) the
date
any entity, person or group, within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act (other than (A) the Company or any
of
its subsidiaries
or any employee benefit plan (or related trust) sponsored or maintained by
the
Company
or any of its subsidiaries shall have become the beneficial owner of, or shall
have obtained voting control over, more than fifty percent (50%) of the
outstanding shares of the Company's
common equity.
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12. Miscellaneous.
(a) Governing
Law. This
Employment Agreement shall be governed by and construed in accordance with
the
laws of the State of New York without reference to principles
of conflict of laws.
(b) Entire
Agreement and Amendment. This
Employment Agreement and the
instruments contemplated herein, contain the entire understanding of the parties
with respect to
the
employment of Executive by the Company from and after the date hereof and
supersedes any
prior
agreements between the Company and Executive, including, but not limited to
the
Original
Agreement. There are no restrictions, agreements, promises, warranties,
covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly
set forth herein and therein. This Employment Agreement may not be altered,
modified,
or amended except by written instrument signed by the parties
hereto.
(c) No
Waiver. The
failure of a party to insist upon strict adherence to any term of this
Employment Agreement on any occasion shall not be considered a waiver of such
party's
rights or deprive such party of the right thereafter to insist upon strict
adherence to that term
or
any other term of this Employment Agreement. Any such waiver must be in writing
and signed
by
Executive or an authorized officer of the Company, as the case may
be.
(d) Assignment.
This
Employment Agreement shall not be assignable by Executive.
(e) Successors;
Binding Agreement; Third Party Beneficiaries. This
Employment Agreement shall inure to the benefit of and be binding upon the
personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees legatees
and permitted
assignees of the parties hereto.
(f) Communications.
For
the
purpose of this Employment Agreement, notices
and all other communications provided for in this Employment Agreement shall
be
in writing
and shall be deemed to have been duly given (i) when delivered by hand, or
(ii)
two business days after being mailed by United States registered or certified
mail, return receipt requested,
postage prepaid, or sent via reputable overnight courier addressed to the
respective addresses
set forth on the initial page of this Employment Agreement, provided that all
notices to
the
Company shall be directed to the attention of the General Counsel of the
Company, or to such
other address as any party may have furnished to the other in writing in
accordance herewith.
Notice of change of address shall be effective only upon receipt.
(g) Withholding
Taxes. The
Company may withhold from any and all amounts
payable under this Employment Agreement such Federal, state and local taxes
as
may be
required to be withheld pursuant to any applicable law or
regulation.
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(h) Survivorship.
The
respective rights and obligations of the parties hereunder
shall survive any termination of Executive's employment to the extent necessary
to the
agreed preservation of such rights and obligations.
(i) Counterparts.
This
Employment Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and
hereto were upon the same instrument.
(j) Headings.
The
headings of the sections contained in this Employment Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Employment
Agreement.
(k) Executive's
Representation. Executive
represents and warrants to the Company
that there is no legal impediment to him performing his obligations under this
Employment
Agreement and neither entering into this Employment Agreement nor performing
his
contemplated service hereunder will violate any agreement to which he is a
party
or any other legal
restriction. The Executive further represents and warrants that his performance
of all the terms of this Agreement and as an employee of the Company does not
and will not breach any agreement
or obligation to keep in confidence proprietary information, knowledge or data
acquired
by him in confidence or in trust prior to his employment with the Company,
and
he will not
disclose to the Company or induce the Company to use any confidential or
proprietary information
or material belonging to any previous employer or others.
(l) BOTH
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRAIL BY JURY IN RESPECT OF ANY
CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS EMPLOYMENT
AGREEMENT OR ANY ANCILLARY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL
OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES
A MATERIAL INDUCEMENT FOR THE EMPLOYER TO HIRE EXECUTIVE.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement
as of the day and year first above written.
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By:
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/s/
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title:Chief
Executive Officer
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/s/
▇▇▇▇ ▇▇▇▇▇▇▇
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