EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into this 14
th day of January, 2009 between Mark Seremet
(“Executive”) and Zoo Games, Inc. (the
“Company”).
1.
Term of Employment The Company hereby agrees to
employ Executive, and Executive hereby accepts employment with the
Company, upon the terms set forth in this Agreement, for the period
commencing on the date hereof (the “Commencement Date”)
and ending on the three year anniversary of the Commencement Date,
unless sooner terminated in accordance with the provisions of
Section 4 or extended as hereinafter provided (such period, as it
may be extended or terminated, is the “Agreement
Term”). Beginning on the three year anniversary of
the Commencement Date, and on each anniversary of the Commencement
Date thereafter, the Agreement Term shall extend for an additional
one year period from the then current expiration date of the
Agreement Term unless at least 60 days prior to the anniversary
date either Executive or the Company provides written notice to the
other party electing not to extend the Agreement Term.
2.
Title; Capacity . The Company will employ
Executive, and Executive agrees to work for the Company, as its
Chief Executive Officer to perform the duties and responsibilities
inherent in such position and such other duties and
responsibilities as the Company shall from time to time assign to
Executive. Executive shall report to the Board of
Directors (the “Board”) of Zoo Entertainment, Inc., the
Company’s parent corporation (“Parent”) and shall
be subject to the supervision of, and shall have such authority as
is delegated by the Board, which authority shall be sufficient to
perform Executive’s duties hereunder. Executive
shall devote Executive’s full business time and reasonable
best efforts in the performance of the foregoing services, provided
that Executive may accept other board memberships or serve in a
like capacity in other charitable organizations that are not in
conflict with Executive’s primary responsibilities and
obligations to the Company, subject to Board approval with such
approval not to be unreasonably withheld.
3.
Compensation and Benefits .
(a)
Salary . As of the Commencement Date, the Company
shall pay Executive a base salary of $325,000 per year, payable in
accordance with the Company’s customary payroll practices
(the “Base Salary”). The Base Salary
thereafter shall be subject to annual review and adjustment as
determined by the Company in its discretion on the anniversary of
the Commencement Date each year of the Agreement Term.
(b)
Discretionary Bonus . The Board may, from time to
time, award Executive an annual bonus, in the sole discretion of
the Board (the “Bonus”). The discretionary
bonus, if any, shall be in addition to Executive’s Base
Salary, and shall be determined in the sole discretion of the Board
and based on such factors as the Company’s budget set for the
fiscal year, and the Executive and the Company’s performances
during the fiscal year. Executive must be employed by
the Company or one of its affiliates on the date such Bonus, if
any, is paid, and such Bonus shall be paid within seven (7) days
of the completion of the Company’s annual audit
.
(c)
Equity Compensation . On the Commencement Date,
the Company shall grant to Executive equity in the form of options
to acquire 750,000 shares of common stock of the Company at an
exercise price per share equal to the per share fair market value,
as determined in accordance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), of the
Company’s common stock as of the Commencement Date (the
“Option”). Provided Executive is employed by
the Company on each vesting date, the Option shall vest in equal
installments on each of the three (3) anniversaries of the
Commencement Date and, except as otherwise provided in this
Agreement, subject to such other terms and conditions as set forth
in the Company’s standard form of option
agreement. The Option shall be exercisable for a period
of ten years from the date of the grant. Any equity
granted shall be governed in all respects by the Company’s
stock and equity plans in effect on the Commencement
Date.
(d)
Fringe Benefits . Executive shall be entitled to
participate in all bonus and benefit programs that the Company
establishes and makes available to its executive employees, if any,
to the extent that Executive’s position, tenure, salary, age,
health and other qualifications make Executive eligible to
participate, including, but not limited to, health care plans, life
insurance plans, disability insurance, retirement plans, and all
other benefit plans from time to time in
effect. Executive shall also be entitled to take four
weeks of fully paid vacation in accordance with Company
policy.
(e)
Reimbursement of Certain Expenses . Executive
shall be reimbursed for such reasonable and necessary business
expenses incurred by Executive while Executive is employed by the
Company, which are directly related to the furtherance of the
Company’s business. The Executive must submit any
request for reimbursement no later than ninety (90) days following
the date that such business expense is incurred in accordance with
the Company’s reimbursement policy regarding same and
business expenses must be substantiated by appropriate receipts and
documentation. The Company may request additional
documentation or a further explanation to substantiate any business
expense submitted for reimbursement, and retains the discretion to
approve or deny a request for reimbursement. If a
business expense reimbursement is not exempt from Section 409A of
the Internal Revenue Code of 1986, as amended (the
“Code”), any reimbursement in one calendar
year shall not affect the amount that may be reimbursed in any
other calendar year and a reimbursement (or
right thereto) may not be exchanged or liquidated for another
benefit or payment. Any business expense reimbursements
subject to Section 409A of the Code shall be made no later than the
end of the calendar year following the calendar year in which such
business expense is incurred by the Executive.
4.
Termination of Employment Period . The Employment
Period shall terminate upon the occurrence of any of the
following:
(a)
Termination of the Agreement Term . At the
expiration of the Agreement Term, but only if appropriate notice is
given in accordance with Section 1.
(b)
Termination for Cause . At the election of the
Company, for cause upon written notice by the Company to
Executive. For the purposes of this Section,
“Cause” for termination shall be deemed to exist upon
the occurrence of any of the following:
(i) a
good faith finding by the Company that Executive has engaged in
dishonesty, negligence or misconduct that injures the
Company;
(ii) Executive’s
conviction or entry of nolo contendere to any felony or a crime
involving moral turpitude, fraud or embezzlement of Company
property; or
(iii) Executive’s
material breach of his duties under this Agreement, which, if
curable, has not been cured by Executive within ten (10) days after
he shall have received written notice from the Company stating the
nature of such breach.
(c)
Voluntary Termination by the Company or for Good Reason
. At the election of the Company, without Cause, at any
time upon 30 days prior written notice by the Company to Executive
or by Executive for Good Reason (as defined below).
(d)
Death or Disability . Thirty days after the death
or determination of disability of Executive. As used in
this Agreement, the determination of “disability” shall
occur when Executive, due to a physical or mental disability, for a
period of 90 consecutive days, or 180 days in the aggregate whether
or not consecutive, during any 360-day period, is unable to perform
the services contemplated under this Agreement. A
determination of disability shall be made by a physician
satisfactory to both Executive and the Company, provided
that if Executive and the Company do not agree on a
physician, Executive and the Company shall each select a physician
and these two together shall select a third physician, whose
determination as to disability shall be binding on all
parties. Notwithstanding the foregoing, if and only to
the extent that Executive’s disability is a trigger for the
payment of deferred compensation, as defined in Section 409A of the
Code, “disability” shall have the meaning set forth in
Section 409A(a)(2)(C) of the Code.
(e)
Voluntary Termination by Executive . At the
election of Executive upon not less than 30 days prior written
notice by him to the Company.
5.
Effect of Termination .
(a)
Termination for Cause, at the Election of Executive, at Death,
for Disability or Upon Expiration of the Agreement Term
. In the event that Executive’s employment is
terminated for Cause, upon Executive’s death, at the election
of Executive, for Executive’s Disability or upon the
expiration of the Agreement Term, the Company sha
