EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (as amended,
supplemented or extended from time to time, this “
Agreement ”) is entered into as of April 6, 2009
(the “ Effective Date ”), by and
between WorldGate Service, Inc. (the “Company” )
and Joel Boyarski (“ Employee
”).
The Employee
has been employed by the Company as its Chief Financial Officer
since April 15, 2002. The Company has just concluded the
private placement of a controlling interest in the Company, and
wishes to retain the Employee on the terms and conditions contained
herein. The Employee desires to be so
retained.
NOW THEREFORE , in consideration of the mutual covenants
contained herein, and in that certain Non-Disclosure,
Non-Circumvention and Non-Competition Agreement that the employee
will sign simultaneously with this Agreement, and for other
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the
parties do hereby agree as follows:
1.
Employment and Employment Period .
1.1.
Position and Duties .
(a) Subject
to the terms and conditions of this Agreement, the Company agrees
to employ the Employee as Chief Financial Officer
(the “Position”), and the Employee agrees to remain in
the employ of the Company, during the Employment Period (as defined
in Section 1.2 ).
(b) The
Employee’s job duties include managing all financial affairs
of the Company and all other duties as reasonably
requested by the Company consistent with that or any future
position of the Employee, which the Employee may
accept. The Employee reports to the Board of
Directors, and directly to the Chief Executive Officer and the
Chairman of the Board of Directors.
(c) At
all times during the Employment Period, the Employee agrees to: (i)
perform all services related to the Employee’s employment
hereunder faithfully and diligently and to discharge the
responsibilities thereof to the best of the Employee’s
ability; (ii) devote full business time and attention and energies
to the duties of the Employee’s employment under this
Agreement; and (iii) use the Employee’s reasonable best
efforts to promote the business of Company.
1.2.
Employment Period . The term “ Employment
Period ” shall mean the period beginning on the Effective
Date and shall continue for one (1) year from that date (the
“Expiration Date”). The Employee's
employment with the Company shall be at-will and may be terminated
for any legal reason and at any time by the Company or the
Employee.
2.
Compensation .
2.1.
Salary . During the Employment Period, in
consideration for the services to be rendered hereunder, and
subject to the terms and conditions of this Agreement, the Company
hereby agrees to pay the Employee, in accordance with its normal
practices, a yearly salary of $195,276 during the
Employment Period (calculated from the date hereof) (the “
Annual Base Salary ”). All compensation
shall be subject to all applicable tax withholding and similar
requirements under applicable law.
2.2.
Incentive Compensation .
(a)
Cash Bonus Incentive Compensation . During
the Employment Period, the Employee shall be eligible to earn
performance bonuses as set forth below (“Cash
Bonus”). The Employee’s entitlement to these
Cash Bonuses shall be based upon individual performance objectives
tailored specifically to the Employee’s position, which shall
be set by the Company’s Compensation Committee and approved
by the Company’s Board of Directors. A Cash Bonus
shall be a percentage of the Employee’s Annual Base Salary,
calculated by dividing the Employee’s Annual Base Salary by
four, and multiplying that number by 35% (the “Target
Quarterly Bonus Amount”). The Cash Bonus shall be
payable quarterly, promptly after the Company’s results for
that quarter are announced, but in any event during the quarter
immediately following the quarter in which the Cash Bonus is
earned, and, with respect to a Cash Bonus earned in the fourth
quarter of a calendar year, on or before March 15 of the following
calendar year. In the event that the Employee’s
employment hereunder terminates involuntarily for any reason other
than cause, as defined in section 4.1, below, a Cash Bonus shall,
if earned and accrued, be apportioned on a per diem basis and paid
to the Employee upon his termination. The Cash Bonus shall be paid
on the following schedule:
1Q
2009 0%
of the Employee’s Target Quarterly Bonus Amount, regardless
if or as earned
2Q
2009 100%
of the Employee’s Target Quarterly Bonus Amount, guaranteed,
regardless if or as earned
3Q
2009 50%
of the Employee’s Target Quarterly Bonus Amount, guaranteed,
regardless if or as earned; the remainder only if and as earned, no
guaranty
4Q
2009 100%
of the Employee’s Target Quarterly Bonus Amount, only if and
as earned, no guaranty
(b)
Stock Option Plan . The Board of Directors
intends, as soon as is practically possible after the Effective
Date of this Agreement, to approve and adopt a new 2009 WorldGate
Employee Stock Option Plan. The Board anticipates that
this new employee stock option plan will include options that vest
over four years, except in the case where the Employee is
terminated before any of his options have yet vested, in which case
he will be given vesting credit for 25% of his options upon his
termination, and which will have a per share strike price to be set
by the Board based on their fair market value on the date of their
grant. As and when such plan is approved, adopted and
implemented, the Employee will be awarded 900,000 options to
purchase the Company’s shares under this plan.
3.
Benefits
.
3.1.
Generally . During the Employment Period
and according to the terms of the relevant plan documents, the
Employee shall be eligible to participate in any medical,
prescription, dental, life insurance, disability or other welfare
benefit plans or policies and any pension or retirement plans which
the Company currently has in place or may hereafter make available
generally to employees having comparable responsibilities and
duties to the Employee, but the Company will not be required to
establish any such program or plan. The Employee shall
be entitled to annual vacation and to reimbursement of expenses,
each in accordance with the Company’s policies in effect from
time to time with respect to employees having comparable
responsibilities and duties. With respect to any expense
reimbursements provided hereunder which are not otherwise
excludible from the Employee’s gross taxable
income, to the extent required to comply with of Section 409A of
the Internal Revenue Code of 1986, as amended, and the regulations
of the Treasury and applicable guidance of the Internal Revenue
Service thereunder (together, “Section 409A”), no
reimbursement of expenses incurred by the Employee during any
taxable year of the Employee shall be made after the last day of
the following taxable year, the right to reimbursement of any such
expenses shall not be subject to liquidation or exchange for
another benefit, and the amount of expenses eligible for
reimbursement during any taxable year of the Employee may not
affect the expenses eligible for reimbursement available in any
other taxable year.
4.
Termination of Employment.
4.1.
Termination for Cause . This Agreement
and the Employee’s employment with the Company may be
terminated at any time by The Company for Cause by written notice
to Employee specifying in reasonable detail the reasons therefor.
For purposes of this Agreement, “ Cause ” shall
mean: (a) the Employee has been convicted of or pled
guilty or no contest to (i) any criminal offence which is
classified as a felony (or its equivalent under the laws or
regulations of any country or political subdivision thereof), or
(ii) any other criminal offense which involves a violation of
federal or state securities laws or regulations (or equivalent laws
or regulations of any country or political subdivision thereof),
embezzlement, fraud, material wrongful taking or material
misappropriation of property or theft; (b) persistent and willful
failure to perform in a manner consistent with the Employee’s
past performance a substantial portion of the Employee’s
duties and responsibilities, which failure continues more than ten
(10) days after written notice is given to the Employee by the
Company; (c) gross negligence or willful misconduct of the Employee
in the performance of his or her duties to the material detriment
of the Company or any affiliate or shareholder of the Company; (d)
breach of any of the covenants, terms and provisions of this
Agreement; and (e) breach of trust or breach of fiduciary duty owed
to the Company, its shareholders, directors, customers, affiliates,
subsidiaries or members. Nothing in this section or
elsewhere in this Agreement shall be construed to mean that the
Company cannot alter, change, whether such might be perceived as
improvement or diminishment, the Employee’s duties and
responsibilities hereunder, nor as any obligation on the art of the
Employee to accept any such change.
4.2.
Death or Permanent Disability of Employee . This
Agreement and the Employee’s employment with the Company
shall