EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Employment
Agreement") dated as of December 18, 2007 (the "Effective Date") by
and between Destination Software, Inc., a New Jersey corporation
having an office and principal place of business at 137
Hurffville-Cross Keys Road, Suite C, Sewell, NJ 08080 (hereinafter
referred to as the "Company") and Susan Kain Jurgensen, an
individual residing at 4 Oak Ridge Lane, Sewell, New Jersey 08080
(hereinafter referred to as the "Employee").
WITNESSETH:
WHEREAS, the Employee is an equity owner in
Company; and
WHEREAS, simultaneously with the execution
hereof, Green Screen Interactive Software, LLC ("GSIS") is
acquiring all of the equity of Company pursuant to a Contribution
Agreement dated as of July 24, 2007 among GSIS, Company, the
Employee and others (the "Contribution Agreement"); and
WHEREAS, as a condition to closing of the
transactions contemplated by the Contribution Agreement, GSIS and
Company require that the Employee agree to provide services to the
Company for the benefit of the Company, its parent, affiliates and
subsidiaries upon the terms and conditions herein set forth;
and
WHEREAS, the Employee desires to render such
services in order to induce GSIS to consummate the closing under
the Contribution Agreement; and
WHEREAS, the Company is the owner of the
Company's business and the Company's accounts, clients and
customers, all of which comprise a substantial part of the good
will of the Company; and
WHEREAS, the Company wishes to protect its
business, good will and confidential and proprietary
information.
NOW, THEREFORE, in consideration of the premises
herein, and the mutual promises and undertakings herein contained
and set forth, and for other good and valuable consideration, made
over by each party to the other, the receipt and sufficiency of
which are hereby acknowledged, it is covenanted and agreed as
follows:
1. Employment . The Company hereby agrees to employ the
Employee, and the Employee hereby agrees to accept employment by
the Company, upon and subject to the terms and conditions of this
Agreement.
2. Term .
The term of this Agreement shall begin on the date hereof (the
"Commencement Date") and shall continue for a period of four (4)
years, unless sooner terminated in the manner provided for herein
(the "Term"). As used herein, the term "Contract Year" shall mean
each 12 month period during the term of this Agreement.
A. Base Salary . For all services to be rendered by the
Employee to the Company under this Agreement, or otherwise, the
Company shall pay to the Employee a base salary ("Base Salary") at
the rate of Three Hundred Thousand Dollars ($300,000) for the first
Contract Year with increases of 4% for each subsequent Contract
Year, which sum shall be paid on such basis as the Company shall
reasonably determine, but not less frequently than monthly. It is
understood that the Company may, in its sole discretion, increase
said base salary without affecting any of the other terms of this
Agreement.
B. Bonuses . Employee shall be eligible to receive bonuses
of: (i) $150,000 for each Contract Year, payable in equal quarterly
installments, if the [new label, the name of which has not been
determined as of the date hereof] licenses and publishes at least
10 video game SKUs in such Contract Year; (ii) a $150,000 per
Contract Year sales bonus if Company-wide sales equal or exceed $30
million for such Contract Year; (iii) a $750,000 one time bonus if
[new label] exceeds $85 million in sales with an Operating Margin
of no less than 10% in any one fiscal year; and (iv) an additional
$750,000 one time bonus if [new label] exceeds $125 million in
sales with an Operating Margin of no less than 10% in any one
fiscal year. "Operating Margin" is defined as [new label's] sales,
net of all applicable sales discounts, allowances and markdowns
consistent with those recorded on GAAP-based financial statements,
cost of sales (including cost of manufacturing, freight-in,
royalties, development advances and costs, and inventory
write-downs), marketing costs, distribution costs, and sales,
general and administrative costs specific to [new
label].
C. Equity . Employee shall be eligible to participate in
any incentive equity option plan Company may have, subject to the
discretion of the compensation committee of Company, such committee
taking into account Employee's senior management role in the
Company.
4. Social Security and Withholding
. All compensation provided for in
this Agreement shall be subject to the Company deducting therefrom
such Social Security, withholding and any other payments as may be
required by law.
A. During the Term, the Employee will hold the
initial office of President of the Company and President of [new
label] and such other office(s) of the Company and/or its
affiliates to which she may be elected or appointed, and Employee
shall perform all duties incidental thereto as may be prescribed by
the Company from time to time. The Employee shall report to the
Chairman of GSIS and/or his/her designees. The precise services and
responsibilities of the Employee may be extended or curtailed, from
time to time, at the direction of the Company, in its sole
discretion. In the event that the Employee is now or shall in the
future be elected or appointed as an officer of the Company or of
any affiliate of the Company during the Term, the Employee will
serve in such capacity or capacities without further compensation;
however, nothing herein shall be construed as requiring the
Company, or anyone else, to cause the election or appointment of
the Employee as such officer.
B. The Employee warrants and represents (and
breach hereof shall be cause for termination by the Company of this
Agreement) that she is not under any contractual or other
obligations of any sort which will (i) prevent her from performing
fully all of her obligations hereunder, and/or (ii) vest in any
other person, firm or corporation any right to recover damages as a
result of the Employee's performance hereunder, and/or (iii) permit
any other person or entity to enjoin or otherwise prevent full
compliance by her hereunder.
6. Extent of Services . The Employee shall devote her entire, full
time, attention, energies and best efforts to the business of the
Company, and shall not during the Term be engaged in any other
business activity whether or not such business activity is pursued
for gain, profit, or other pecuniary advantage; but this
shall not be construed as preventing the Employee from investing
her assets in such form or manner as will not require any services
on the part of the Employee in the operation of the affairs of the
companies in which such investments are made. The Employee agrees
to perform faithfully and to the best of her ability all
assignments given her by the Company.
7. Benefits . During the Term:
A. Vacation . The Employee shall be entitled to a vacation
of twenty five (25) working days during each Contract Year, or pro
rata for a portion of a Contract Year. The time or times of said
vacation shall be determined by the mutual agreement of the Company
and the Employee, provided, however, that any vacation absence
exceeding ten (10) consecutive vacation days shall be subject to
the prior approval of the Company, which approval shall not be
unreasonably withheld.
B. Benefits . The Employee and her dependents, if
applicable, shall be eligible to participate in any plan of the
Company relating to group life insurance, medical coverage, dental
coverage, disability insurance, education and/or other retirement
or employee benefit plans or programs that the Company has adopted
or may adopt for the benefit of its executive employees ("Plans").
The Employee acknowledges and agrees that the Company shall have
the absolute right, at any time and from time to time, to modify,
amend, replace and/or discontinue any of the Plans. Notwithstanding
anything herein to the contrary, Company acknowledges that medical
coverage is a significant component to this Agreement based upon
health issues relating to Employee's family and agrees that it will
provide either (a) medical coverage equal to or greater than the
present policy in place for Company or (b) in the event the medical
coverage provided by Company is less than the policy currently in
place for Company, reimbursement to Employee for the cost of
insurance which she will purchase privately to make up the
shortfall in coverage.
C. Expenses . The Employee is authorized to incur reasonable
and necessary expenses (including a first class seat when traveling
by air or business class when traveling by train) for promoting the
business of the Company, including expenses for entertainment,
travel and similar items; provided, however, that any single such
expense in excess of $3,000 (three thousand dollars) must be
approved in advance by the Company. The Company will pay for and/or
reimburse the Employee for all such expenses upon the presentation
by the Employee, within thirty (30) days of the date incurred, of
an itemized account of such expenditures and invoices and/or such
other verification of such expenses as may be requested by the
Company.
D. Company Car . Company shall maintain the GMAC Cadillac
Escalade lease dated October 21, 2006 and insurance for the term of
such lease. Such vehicle shall be used by Employee primarily for
business purposes. After the expiration of such lease, Company
shall reimburse Employee up to $1,400 per month for lease and
insurance costs associated with her automobile.
8. Title to Business . The Employee shall keep and maintain
accurate, detailed and legible records of all work performed by the
Employee on behalf of the Company, including, but not limited to,
specific proposals to clients and customers, proposals and
presentations, the Employee's work product and other ideas created
and implemented during the Term. All right, title, and interest in
and to all of the above, together with any and all books, records,
accounts, good will, all related business and all other business
conducted by the Company, or the Employee on the Company's behalf,
whether produced by the Employee or not, and any renewals thereof,
shall remain in the Company before and after the termination of
this Agreement for any reason.
9. Ventures . If, during the Term of this Agreement, the
Employee is engaged in or associated with the planning or
implementing of any project, program or venture involving the
Company or its affiliates and a third party or parties, all rights
in such project, program or venture shall belong to the Company.
The Employee shall not be entitled to any interest in such project,
program or venture or to any commission, finder's fee or other
compensation in connection therewith other than the salary to be
paid to the Employee as provided in this Agreement.
10. Life Insurance . The Company may, in its discretion, at any
time after the execution of this Agreement, apply for and procure
as owner, and for its own benefit, insurance on the life of the
Employee, in such amounts and in such form or forms as the Company
may choose. The Employee shall have no interest whatsoever in any
such policy or policies, but shall, at the request of the Company,
submit to such medical examinations, supply such information, and
execute such documents as may be reasonably required by the
insurance Company or companies to whom the Company has applied for
such insurance.
11. Confidentiality of Information
.
A. The Employee acknowledges and recognizes that
in the course of her employment hereunder she will become
acquainted with confidential and/or proprietary information of the
Company, (all of such confidential and/or proprietary information
being collectively referred to as "Confidential Information").
"Confidential Information" includes, but is not limited to, any
trade secrets including confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the
business of the Company or its affiliates, any customer or supplier
lists of the Company, any confidential or secret development or
research work of the Company, or any other confidential information
or secret aspects of the business of the Company, whether developed
by the Employee or by others, as well as all such information of
affiliates of Company, including GSIS and other subsidiaries and
affiliates of GSIS. In recognition of the foregoing, the Employee
agrees that she will keep secret and confidential any and all
Confidential Information and that she will not, directly or
indirectly, without the prior written consent of the Company,
either during the Term or at any time thereafter, except as may be
required in the course of her employment hereunder:
(1) Communicate, divulge or otherwise disclose any
such Confidential Information to any person or entity;
and/or
(2) Use or attempt to use any such Confidential
Information for any purpose or in any manner, including, without
limiting the foregoing, for the purpose of inducing or attempting
to induce any account, client and/or customer of the Company to
become an account, client and/or customer of the Employee or of any
person or entity with which the Employee is affiliated in any
capacity; and/or for any purpose which may injure or cause loss or
may be calculated to injure or cause loss, whether directly or
indirectly, to the Company.
B. All records, files, manuals, lists of
customers, blanks, forms, materials, supplies, computer programs
and other materials furnished to the Employee by the Company, used
by her on its behalf, or generated or obtained by her during the
course of her employment, shall be and remain the property of the
Company. The Employee shall be deemed the bailee thereof for the
use and benefit of the Company and shall safely keep and preserve
such property, except as consumed in the normal business operations
of the Company. The Employee acknowledges that this property is
confidential and/or proprietary and is not readily accessible to
the Company's competitors. Upon the termination of the Employee's
employment for any reason whatsoever, all documents, records,
notebooks, equipment, employee lists, price lists, specifications,
programs, customer and prospective customer lists and other
materials which refer or relate to any confidential or proprietary
aspect of the business of the Company which are in the possession
of the Employee including all copies thereof, shall be promptly
returned to the Company.
C. The products and proceeds of Employee's
services hereunder that Employee may acquire, obtain, develop or
create during the term of this Agreement, or that are otherwise
made at the direction of the Company or with the use of the
Company's or its affiliates' facilities or materials, including,
but not limited to, all materials, ideas, concepts, formats,
suggestions, developments, packages, programs, inventions,
products, programs, procedures, formats, intellectual properties,
and other materials of any kind created or developed or worked on
by the Employee during her employment by the Company (collectively,
"Works"), shall be considered a "work made for hire," as
that term is defined under the United States Copyright Act, and
Employee shall be considered an employee for hire of the Company,
and all rights in and to the Works, including the copyright or
patent thereto, shall be the sole and exclusive property of the
Company, as the sole author and owner thereof, and the copyright
thereto may be registered by the Company in its own name, and the
Employee will not have any right, title or interest of any
natu
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