Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT
 
This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of
the 1st day of December 2016, by and between Majesco Entertainment Company, a
Delaware corporation headquartered at 404I-T Hadley Road, S. Plainfield, New
Jersey 07080 (“Parent”) and Denver Lough, an individual (“Executive”). As used
herein, the “Effective Date” of this Agreement shall mean the Closing date as
defined in that certain Merger Agreement (as defined below) and executed
contemporaneously herewith.
 
W I T N E S S E T H:
 
WHEREAS, the Executive desires to be employed by the Parent as its Chief
Executive Officer and Chief Scientific Officer and the Parent wishes to employ
the Executive in such capacities, in each case, commencing on and as of the
Effective Date.
 
WHEREAS, the Executive and Parent are entering into this Agreement and the
Merger Agreement and the additional Transaction Documents which describes the
acquisition of Polarityte, Inc., a Nevada corporation (the “Company”) and
certain Patent(s) (as defined below) by the Parent, including recapitalization
of the Parent in a transaction intended to be tax-free to the Executive,
establishing control of at least a majority of the Parent’s issued an
outstanding voting capital stock by Executive immediately following Closing,
election of a board of directors, prosecution of the Patents (as defined below),
and commercial development of the Patents and related technology.
WHEREAS, contemporaneously with the execution of this Agreement by Executive,
and as a condition to the effectiveness hereof, Executive has irrevocably
assigned Patent No. WO/2016/089825 and PCT/US2015/063114 (the “Patents”)
pursuant to that certain Assignment Agreement to the Company (the “Assignment
Agreement”). .
Terms not otherwise defined herein shall have the meanings ascribed to such
terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and their respective covenants
and agreements contained in this document, the Parent and the Executive hereby
agree as follows:
1. Employment and Duties. The Parent agrees to employ and the Executive agrees
to serve as the Parent’s Chief Executive Officer, Chief Scientific Officer and
Chairman of the Board. The duties and responsibilities of the Executive shall
include the duties and responsibilities as the Parent’s Board of Directors
(“Board”) may from time to time assign to the Executive.
Upon the Effective Date of this Agreement (or as promptly as practicable
thereafter), Executive shall be appointed to serve as a member of the Board,
pursuant to the terms and conditions of the Parent’s bylaws, as amended. For so
long as Executive is Chief Executive Officer, the Parent shall use commercially
reasonable efforts, subject to applicable law and regulations of the The NASDAQ
Stock Market LLC, to cause Executive to be nominated for election as a director
and to be recommended to the stockholders for election as a director.
The Executive shall devote his full time efforts and services to the business
and affairs of the Parent and its subsidiaries. Nothing in this Section 1 shall
prohibit the Executive from: (A) serving as a director or member of any other
board, committee thereof of any other entity or organization; (B) delivering
lectures, fulfilling speaking engagements, and any writing or publication
relating to his area of expertise; (C) serving as a director or trustee of any
governmental, charitable or educational organization; (D) engaging in additional
activities in connection with personal investments and community affairs,
including, without limitation, professional or charitable or similar
organization committees, boards, memberships or similar associations or
affiliations (E) serving in health care facilities as a physician in order to
maintain his license to practice medicine, or (F) performing advisory
activities, provided, however, such activities are not in competition with the
business and affairs of the Parent or would tend to cast executive of Parent in
a negative light in the reasonable judgment of the Board.
 
 
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2. Term. The term of this Agreement shall commence on the Effective Date and
shall continue for a period of one (1) year following the Effective Date and
shall be automatically renewed for successive one (1) year periods thereafter
unless either party provides the other party with written notice of his or its
intention not to renew this Agreement at least three (3) months prior to the
expiration of the initial term or any renewal term of this Agreement.
“Employment Period” shall mean the initial one (1) year term plus renewals, if
any.
 
3. Place of Employment. The Executive’s services shall be performed at such
location or locations as Executive shall determine, in his sole discretion.
 
4. Base Salary and Board Fees. The Parent agrees to pay the Executive a base
salary (“Base Salary”) of $350,000.00 per annum for the position(s) of Chief
Executive Officer and Chief Scientific Officer. Annual adjustments after the
first year of the Employment Period shall be determined by the Board. The Base
Salary shall be paid in periodic installments in accordance with the Parent’s
regular payroll practices. Executive shall, subject to policies and procedures
of the Parent’s Board of Directors, be eligible to additional fees for service
on the Parent’s Board.
5. Incentive Compensation and Bonuses.
                        (a) Executive Employment Agreement Signing Bonus: Upon
execution of this Agreement, the Parent shall pay to Executive an initial
signing bonus of $100,000.00
                        (b) Annual Bonus: For each fiscal year during the term
of employment, the Executive shall be eligible to receive a bonus in the amount
of 100% of annual salary, if any, as may be determined from time to time by the
Board in its discretion. The Annual Bonus shall be paid by the Parent to the
Executive promptly after determination that the relevant targets, if any, have
been met, it being understood that the attainment of any financial targets
associated with any bonus shall not be determined until following the completion
of the Parent’s annual audit and public announcement of such results and shall
be paid promptly following the Parent’s announcement of earnings. In the event
that the Compensation Committee is unable to act or if there shall be no such
Compensation Committee, then all references herein to the Compensation Committee
(except in the proviso to this sentence) shall be deemed to be references to the
Board. Upon his termination from employment, the Executive shall be entitled to
receive a pro-rata portion of the Annual Bonus calculated based upon his final
day of employment, regardless of whether he is employed by the Parent through
the conclusion of the fiscal quarter or year, as the case may be, on which the
Annual Bonus is based.
                        (c) Equity Awards and Incentive Compensation: During the
term of employment, the Executive shall be eligible to participate in any
equity-based incentive compensation plan or program adopted by the Parent (such
awards under such plan or program, the “Share Awards”) as the Compensation
Committee or Board may from time to time determine. Share Awards shall be
subject to applicable plan terms and conditions. And any additional terms and
conditions as determined by the Compensation Committee or the Board. On the
Effective Date, the Board of Directors of Parent shall award and reserve for
issuance 10 year options to purchase 3,000,000 shares of common stock pursuant
to the Parent’s Incentive Stock and Option Plan at the fair market value thereof
(as determined by NASDAQ) to such persons eligible for such awards to be
determined by Executive.
                   6. Severance Compensation:
(A) Separation Payment. Upon termination of employment for any reason, the
Executive shall be entitled to: (A) the sum of his annual Base Salary from the
date of termination to be paid according to Section 4; (B) any and all
reasonable expenses paid or incurred by the Executive in connection with and
related to the performance of his duties and responsibilities for the Parent
during the period ending on the termination date to be paid according to Section
8; (C) any accrued but unused vacation time through the termination date in
accordance with Parent policy; and (D) the sum of his annual Bonus from the date
of termination to be paid according to Section 5(a); and (E) all Share Awards
earned and vested prior to termination. With respect to any Share Awards held by
the Executive as of his death that are not vested and exercisable as of such
date, the Parent shall fully accelerate the vesting and exercisability of such
Share Awards, so that all such Share Awards shall be fully vested and
exercisable as of the Executive’s death, such options (as well as any Share
Awards that previously became vested and exercisable) to remain exercisable,
notwithstanding anything in any other agreement governing such options, until
the earlier of (A) a period of one (1) year after the Executive’s death or (B)
the original term of the option, if such Share Awards is an option.
 
 
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Additionally, if the Executive’s employment is terminated prior to expiration of
the Employment Period (including due to his death or Disability, as defined in
Section 11(b)) unless the Executive’s employment is terminated for Cause (as
defined in Section 11(c)) or the Executive terminates his employment without
Good Reason (as defined in Section 11(d) and other than for a Change in Control
as provided in Section 11(d) and Section 11(f)), the Executive shall be entitled
to receive a cash amount equal to the sum of the Executive’s Base Salary, Annual
Bonus and Share Awards earned during the year immediately preceding the date of
termination (herein the “Separation Payment”), or the amount payable (including
Executive’s Base Salary, Annual Bonus and Share Awards) for the remainder of the
Employment Period then in effect, if greater; provided, that the Executive
executes an agreement releasing Parent and its affiliates from any liability
associated with this Agreement and such release is irrevocable at the time the
Separation Payment is first payable under this Section 6 and the Executive
complies with his other obligations under Section 13 of this Agreement. Subject
to the terms hereof, 100% of the Separation Payment shall be paid within thirty
(30) days of the Executive’s termination of employment (“Initial Payment”),
provided that the Executive has executed a release.
 
The Executive may continue coverage with respect to the Parent’s group health
plans as permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) for himself and each of his “Qualified Beneficiaries” as defined by
COBRA (“COBRA Coverage”). The Parent shall reimburse the amount of any COBRA
premium paid for COBRA Coverage timely elected by and for the Executive and any
Qualified Beneficiary of the Executive, and not otherwise reimbursed, during the
period that ends on the earliest of (x) the date the Executive or the Qualified
Beneficiary, as the case may be, ceases to be eligible for COBRA Coverage, (y)
the last day of the consecutive eighteen (18) month period following the date of
the Executive’s termination of employment and (z) the date the Executive or the
Qualified Beneficiary, as the case may be, is covered by another group health
plan. To reimburse any COBRA premium payment under this paragraph, the Parent
must receive documentation of the COBRA premium payment within ninety (90) days
of its payment.
 
(B) Special Participation Payment upon Involuntary Termination of Executive.
Provided Executive shall not be in material breach of this Agreement, Executive
shall have the right to Participation Payments (as defined below) paid to Parent
(or any Affiliate) from commercial transactions associated with the Patents and
intellectual property rights associated with the Patents (sales or licenses to
third parties), net of Deductible Purchaser Expenses (as defined below)
(“Profits”) on and following the final issuance to the Parent (or an Affiliate)
by the USPTO of a United States Patent under the pending Patent application and
assigned to the Company upon either: (A) termination of Executive’s employment
by Executive with Good Reason, or (B) upon termination of Executive’s employment
by Parent without Cause (as such terms are defined below).
 
The Parent will wire transfer within thirty (30) days following the end of each
calendar quarter, to the account specified by Executive or such other account as
most recently specified in writing by Executive, an amount equal to the product
of (A) the applicable Participation Percentage multiplied by (B) the
Participation Income for the most recently completed calendar quarter
(“Participation Payments”),
 
“Deductible Purchaser Expenses,” for any particular calendar quarter, means (i)
the cumulative amount of all charges and out-of-pocket costs and expenses
(including research and development, patenting, operating expenses, allocable
portion of overhead, insurance, samples, models, training, discounts,
allowances, givebacks and similar items of value) incurred by the Parent and its
Affiliates where such costs are incurred from the business of the Parent and
such Affiliates related to the Patents and any intellectual property associated
with the Patents on and following the Closing and (ii) costs and expenses
associated with assertion and/or litigation of the Patents or any intellectual
property associated with the Patents.
 
“Participation Income” for any particular calendar quarter means the Profits of
Parent and its Affiliates (as reported and in accordance with US GAAP) received
for each calendar quarter minus Deductible Purchaser Expenses.
 
 
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“Participation Percentage” for any particular calendar quarter means five (5%)
percent of Participation Income.
 
Parent shall keep full, clear and accurate records with respect to the
Participation Income and Participation Payments and shall furnish any
information which Seller may reasonably prescribe from time to time to enable
Seller to ascertain the proper Participation Payments due under this Agreement.
Parent shall retain such records with respect to the Participation Payments for
at least three (3) years from each such payment. Executive shall have the right,
annually, through a national auditing firm, to make an examination, during
normal business hours, of all records and accounts bearing upon the amount of
Participation Payments payable under this Agreement. Prompt adjustment shall be
made to compensate for any errors or omissions disclosed by such examination.
Parent shall be responsible for all its costs of any such audit unless the audit
reveals an underpayment by Parent of at least $100,000 for the audited period.
In such an event, Parent shall be responsible for Executive’s costs of the
audit. Based on audited financials, Parent will provide Executive with a
calculation of the amounts due with respect to each of the quarters in such
recently ended calendar year (a “Year End Statement”). The Year End Statement is
due to Executive within fifteen (15) days of Parent’s receipt of audited
financial statements certified by Parent’s auditor. Within ten (10) days
following receipt of such Year End Statement, Parent or Executive., as the case
may be, will pay, (without interest) to the other, any amounts in excess of or
remaining due as shown in the Year End Statement.
 
If a dispute arises with respect to the amounts of Participation Payments due,
the parties will negotiate the matter in good faith during a four (4) week
period. If a dispute remains after such good faith negotiations, the parties
will as expeditiously as possible (in any event within sixty days) seek
mediation to resolve the remaining matters. If no agreement is reached, the
parties may exercise all rights available hereunder at law.
 
   7. Clawback Rights. The Annual Bonus, and any and all stock based
compensation (such as options and equity awards) (collectively, the “Clawback
Benefits”) shall be subject to “Clawback Rights” as follows: during the period
that the Executive is employed by the Parent and upon the termination of the
Executive’s employment and for a period of three (3) years thereafter, if there
is a restatement of any financial results from which any Clawback Benefits to
the Executive shall have been determined, the Executive agrees to repay any
amounts which were determined by reference to any Parent financial results which
were later restated (as defined below), to the extent the Clawback Benefits
amounts paid exceed the Clawback Benefits amounts that would have been paid,
based on the restatement of the Parent’s financial information. All Clawback
Benefits amounts resulting from such restated financial results shall be
retroactively adjusted by the Compensation Committee to take into account the
restated results, and any excess portion of the Clawback Benefits resulting from
such restated results shall be immediately surrendered to the Parent and if not
so surrendered within ninety (90) days of the revised calculation being provided
to the Executive by the Compensation Committee following a publicly announced
restatement, the Parent shall have the right to take any and all action to
effectuate such adjustment. The calculation of the revised Clawback Benefits
amount shall be determined by the Compensation Committee in good faith and in
accordance with applicable law, rules and regulations. All determinations by the
Compensation Committee with respect to the Clawback Rights shall be final and
binding on the Parent and the Executive. The Clawback Rights shall terminate
following a Change of Control as defined in Section 12(f), subject to applicable
law, rules and regulations. For purposes of this Section 7, a restatement of
financial results that requires a repayment of a portion of the Clawback
Benefits amounts shall mean a restatement resulting from material non-compliance
of the Parent with any financial reporting requirement under the federal
securities laws and shall not include a restatement of financial results
resulting from subsequent changes in accounting pronouncements or requirements
which were not in effect on the date the financial statements were originally
prepared (“Restatements”). The parties acknowledge it is their intention that
the foregoing Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010 (“Dodd-Frank Act”) and require recovery of all “incentive-based”
compensation, pursuant to the provisions of the Dodd-Frank Act and any and all
rules and regulations promulgated thereunder from time to time in effect.
Accordingly, the terms and provisions of this Agreement shall be deemed
automatically amended from time to time to assure compliance with the Dodd-Frank
Act and such rules and regulations as hereafter may be adopted and in effect.
 
 
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8. Expenses. The Executive shall be entitled to prompt reimbursement by the
Parent for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by the Executive while employed (in accordance with the
policies and procedures established by the Parent for its senior executive
officers) in the performance of his duties and responsibilities under this
Agreement; provided, that the Executive shall properly account for such expenses
in accordance with Parent policies and procedures.
9. Other Benefits. During the term of this Agreement, the Executive shall be
eligible to participate in incentive, stock purchase, savings, retirement
(401(k)), and welfare benefit plans, including, without limitation, health,
medical, dental, vision, life (including accidental death and dismemberment) and
disability insurance plans (collectively, “Benefit Plans”), in substantially the
same manner and at substantially the same levels as the Parent makes such
opportunities available to the Parent’s managerial or salaried executive
employees and/or its senior executives.
The Parent shall pay one hundred percent (100%) of the cost for any group
medical, vision and/or dental coverage elected by and for the Executive and
fifty percent (100%) of the additional incremental cost for any group medical,
vision and/or dental coverage elected by the Executive for the Executive’s
family.
The Executive shall be entitled to air travel, including travel by business
class, as is reasonable and necessary for the performance of his duties and
responsibilities, in accordance with the Parent’s policies as approved by the
Board.
10. Vacation. During the term of this Agreement, the Executive shall be entitled
to accrue, on a pro rata basis, twenty (20) paid vacation days per year.
Vacation shall be taken at such times as are mutually convenient to the
Executive and the Parent and no more than ten (10) consecutive days shall be
taken at any one time without Parent approval in advance.
11. Termination of Employment:
                        (a) Death. If the Executive dies during the Employment
Period, this Agreement and the Executive’s employment with the Parent shall
automatically terminate and the Parent’s obligations to the Executive’s estate
and to the Executive’s Qualified Beneficiaries shall be those set forth in
Section 6 regarding severance compensation.
                        (b) Disability. In the event that, during the term of
this Agreement the Executive shall be prevented from performing his essential
functions hereunder to the full extent required by the Parent by reason of
Disability (as defined below), this Agreement and the Executive’s employment
with the Parent shall automatically terminate. The Parent’s obligation to the
Executive under such circumstances shall be those set forth in Section 6
regarding severance compensation. For purposes of this Agreement, “Disability”
shall mean a physical or mental disability that prevents the performance by the
Executive, with or without reasonable accommodation, of his essential functions
hereunder for an aggregate of ninety (90) days or longer during any twelve (12)
consecutive months. The determination of the Executive’s Disability shall be
made by an independent physician who is reasonably acceptable to the Parent and
the Executive (or his representative), be final and binding on the parties
hereto and be made taking into account such competent medical evidence as shall
be presented to such independent physician by the Executive and/or the Parent or
by any physician or group of physicians or other competent medical experts
employed by the Executive and/or the Parent to advise such independent
physician.
                        (c) Cause.
(1) At any time during the Employment Period, the Parent may terminate this
Agreement and the Executive’s employment hereunder for Cause. For purposes of
this Agreement, “Cause” shall mean: (a) the willful and continued failure of the
Executive to perform substantially his duties and responsibilities for the
Parent (other than any such failure resulting from the Executive’s death or
Disability) after a written demand by the Board for substantial performance is
delivered to the Executive by the Parent, which specifically identifies the
manner in which the Board believes that the Executive has not substantially
performed his duties and responsibilities, which willful and continued failure
is not cured by the Executive within thirty (30) days following his receipt of
such written demand; (b) the conviction of, or plea of guilty or nolo contendere
to, a felony, or (c) fraud, dishonesty or gross misconduct which is materially
and demonstratively injurious to the Parent. Termination under clauses (b) or
(c) of this Section 11(c)(1) shall not be subject to cure.
 
 
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(2) For purposes of this Section 11(c), no act, or failure to act, on the part
of the Executive shall be considered “willful” unless done, or omitted to be
done, by him in bad faith and without reasonable belief that his action or
omission was in, or not opposed to, the best interest of the Parent. Between the
time the Executive receives written demand regarding substantial performance, as
set forth in subparagraph (1) above, and prior to an actual termination for
Cause, the Executive will be entitled to appear (with counsel) before the full
Board to present information regarding his views on the Cause event. After such
hearing, termination for Cause must be approved by a majority vote of the full
Board (other than the Executive). After providing the written demand regarding
substantial performance, the Board may suspend the Executive with full pay and
benefits until a final determination by the full Board has been made.
 
(3) Upon termination of this Agreement for Cause, the Parent shall have no
further obligations or liability to the Executive or his heirs, administrators
or executors with respect to compensation and benefits thereafter, except for
the obligation to pay the Executive any Base Salary earned through the date of
termination to be paid according to Section 4; any unpaid Annual Bonus to be
paid according to Section 5; reimbursement of any and all reasonable expenses
paid or incurred by the Executive in connection with and related to the
performance of his duties and responsibilities for the Parent during the period
ending on the termination date to be paid according to Section 8; and any
accrued but unused vacation time through the termination date in accordance with
Parent policy. The Parent shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
 
(d) For Good Reason or a Change of Control or Without Cause.
 
(1) At any time during the term of this Agreement and subject to the conditions
set forth in Section 12(d)(2) below the Executive may terminate this Agreement
and the Executive’s employment with the Parent for “Good Reason” or for a
“Change of Control” (as defined in Section 12(f)). For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
events without Executive’s consent: (A) the assignment to the Executive of
duties that are significantly different from, and/or that result in a
substantial diminution of, the duties that he assumed on the Effective Date
(including reporting to anyone other than solely and directly to the Board); (B)
the assignment to the Executive of a title that is different from and
subordinate to the title Chief Executive Officer of the Parent, provided,
however, for the absence of doubt following a Change of Control, should the
Executive be required to serve in a diminished capacity in a division or unit of
another entity (including the acquiring entity), such event shall constitute
Good Reason regardless of the title of the Executive in such acquiring company,
division or unit; or (C) material breach by the Parent of this Agreement.
 
(2) The Executive shall not be entitled to terminate this Agreement for Good
Reason unless and until he shall have delivered written notice to the Parent
within ninety (90) days of the date upon which the facts giving rise to Good
Reason occurred of his intention to terminate this Agreement and his employment
with the Parent for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to provide the basis for such termination for Good Reason,
and the Parent shall not have eliminated the circumstances constituting Good
Reason within thirty (30) days of its receipt from the Executive of such written
notice. In the event the Executive elects to terminate this Agreement for Good
Reason in accordance with Section 11(d)(1), such election must be made within
the twenty-four (24) months following the initial existence of one or more of
the conditions constituting Good Reason as provided in Section 11(d)(1). In the
event the Executive elects to terminate this Agreement for a Change in Control
in accordance with Section 11(d)(1), such election must be made within one
hundred eighty (180) days of the occurrence of the Change of Control.
 
(3) In the event that the Executive terminates this Agreement and his employment
with the Parent for Good Reason or for a Change of Control or the Parent
terminates this Agreement and the Executive’s employment with the Parent without
Cause, the Parent shall pay or provide to the Executive (or, following his
death, to the Executive’s heirs, administrators or executors) the severance
compensation set forth in Section 6 above. The Parent shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions.
 
 
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 (4) The Executive shall not be required to mitigate the amount of any payment
provided for in this Section 11(d) by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 11(d) be reduced by
any compensation earned by the Executive as the result of employment by another
employer or business or by profits earned by the Executive from any other source
at any time before and after the termination date. The Parent’s obligation to
make any payment pursuant to, and otherwise to perform its obligations under,
this Agreement shall not be affected by any offset, counterclaim or other right
that the Parent may have against the Executive for any reason.
 
(e) Without “Good Reason” by the Executive. At any time during the term of this
Agreement, the Executive shall be entitled to terminate this Agreement and the
Executive’s employment with the Parent without Good Reason and other than for a
Change of Control by providing prior written notice of at least thirty (30) days
to the Parent. Upon termination by the Executive of this Agreement or the
Executive’s employment with the Parent without Good Reason and other than for a
Change of Control, the Parent shall have no further obligations or liability to
the Executive or his heirs, administrators or executors with respect to
compensation and benefits thereafter, except for the obligation to pay the
Executive any Base Salary earned through the date of termination to be paid
according to Section 4; any unpaid Annual Bonus to be paid according to Section
5; reimbursement of any and all reasonable expenses paid or incurred by the
Executive in connection with and related to the performance of his duties and
responsibilities for the Parent during the period ending on the termination date
to be paid according to Section 8; and any accrued but unused vacation time
through the termination date in accordance with Parent policy. The Parent shall
deduct, from all payments made hereunder, all applicable taxes, including income
tax, FICA and FUTA, and other appropriate deductions.
 
(f) Change of Control. For purposes of this Agreement, “Change of Control” shall
mean the occurrence of any one or more of the following: (i) the accumulation
(if over time, in any consecutive twelve (12) month period), whether directly,
indirectly, beneficially or of record, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) of more than fifty percent (50%) or more of the shares
of the outstanding Common Stock of the Parent, whether by merger, consolidation,
sale or other transfer of shares of Common Stock (other than a merger or
consolidation where the stockholders of the Parent prior to the merger or
consolidation are the holders of a majority of the voting securities of the
entity that survives such merger or consolidation), (ii) a sale of all or
substantially all of the assets of the Parent or (iii) during any period of
twelve (12) consecutive months, the individuals who, at the beginning of such
period, constitute the Board, and any new director whose election by the Board
or nomination for election by the Parent’s stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the twelve (12) month period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board; provided that the
following acquisitions shall not constitute a Change of Control for the purposes
of this Agreement: any acquisition of Common Stock or securities convertible
into Common Stock by any employee benefit plan (or related trust) sponsored by
or maintained by the Parent.
 
(g) Any termination of the Executive’s employment by the Parent or by the
Executive (other than termination by reason of the Executive’s death) shall be
communicated by written Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean
a written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, provided, however, failure to
provide timely notification shall not affect the employment status of the
Executive.
 
12. Confidential Information.
 
(a) Disclosure of Confidential Information. The Executive recognizes,
acknowledges and agrees that he has had and will continue to have access to
secret and confidential information regarding the Parent, its subsidiaries and
their respective businesses (“Confidential Information”), including but not
limited to, its products, methods, formulas, software code, patents, sources of
supply, customer dealings, data, know-how, trade secrets and business plans,
provided such information is not in or does not hereafter become part of the
public domain, or become known to others through no fault of the Executive. The
Executive acknowledges that such information is of great value to the Parent, is
the sole property of the Parent, and has been and will be acquired by him in
confidence. In consideration of the obligations undertaken by the Parent herein,
the Executive will not, at any time, during or after his employment hereunder,
reveal, divulge or make known to any person, any information acquired by the
Executive during the course of his employment, which is treated as confidential
by the Parent, and not otherwise in the public domain. The provisions of this
Section 13 shall survive the termination of the Executive’s employment
hereunder.
 
(b) The Executive affirms that he does not possess and will not rely upon the
protected trade secrets or confidential or proprietary information of any prior
employer(s) in providing services to the Parent or its subsidiaries.            
                   
 
(c) In the event that the Executive’s employment with the Parent terminates for
any reason, the Executive shall deliver forthwith to the Parent any and all
originals and copies, including those in electronic or digital formats, of
Confidential Information; provided, however, the Executive shall be entitled to
retain (i) papers and other materials of a personal nature, including, but not
limited to, photographs, correspondence, personal diaries, calendars and
rolodexes, personal files and phone books, (ii) information showing his
compensation or relating to reimbursement of expenses, (iii) information that he
reasonably believes may be needed for tax purposes and (iv) copies of plans,
programs and agreements relating to his employment, or termination thereof, with
the Parent. The covenants and agreements in this Section 12 shall exclude
excludes information (A) which is in the public domain through no unauthorized
act or omission of Executive or (B) which becomes available to Executive on a
non-confidential basis from a source other than Parent or its affiliates without
breach of such source’s confidentiality or non-disclosure obligations to Parent
or any of its affiliates.
 
 
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13. Non-Competition and Non-Solicitation.
 
(a) The Executive agrees and acknowledges that the Confidential Information that
the Executive has already received and will receive is valuable to the Parent
and that its protection and maintenance constitutes a legitimate business
interest of the Parent, to be protected by the non-competition restrictions set
forth herein. The Executive agrees and acknowledges that the non-competition
restrictions set forth herein are reasonable and necessary and do not impose
undue hardship or burdens on the Executive. The Executive also acknowledges that
the Parent’s Business (as defined in Section 13(b) (1) below) is conducted
worldwide (the “Territory”), and that the Territory, scope of prohibited
competition, and time duration set forth in the non-competition restrictions set
forth below are reasonable and necessary to maintain the value of the
Confidential Information of, and to protect the goodwill and other legitimate
business interests of, the Parent, its affiliates and/or its clients or
customers. The provisions of this Section 13 shall survive the termination of
the Executive’s employment hereunder for the time periods specified below.
 
(b) The Executive hereby agrees and covenants that he shall not without the
prior written consent of the Parent, directly or indirectly, in any capacity
whatsoever, including, without limitation, as an employee, employer, consultant,
principal, partner, shareholder, officer, director or any other individual or
representative capacity (other than (i) as a holder of less than two (2%)
percent of the outstanding securities of a company whose shares are traded on
any national securities exchange or (ii) as a limited partner, passive minority
interest holder in a venture capital fund, private equity fund or similar
investment entity which holds or may hold an equity or debt position in
portfolio companies that are competitive with the Parent; provided however, that
the Executive shall be precluded from serving as an operating partner, general
partner, manager or governing board designee with respect to such portfolio
companies), or whether on the Executive's own behalf or on behalf of any other
person or entity or otherwise howsoever, during the Term and thereafter to the
extent described below, within the Territory:
 
(1) Engage, own, manage, operate, control, be employed by, consult for,
participate in, or be connected in any manner with the ownership, management,
operation or control of any business in competition with the Business of the
Parent, as defined in the next sentence. For purposes hereof, the Parent’s
“Business” shall mean research, development, techniques and technology in any
manner involving or related to regeneration of functionally polarized tissue by
use of Leucine-rich repeat-containing G-protein coupled Receptor (LGR)
expressing cells and any and all inventions, technology and trade secrets
related thereto or a result of the services of Employee hereunder, as well as
all activities that involve the making, use or licensing thereof.
 
(2) Recruit, solicit or hire, or attempt to recruit, solicit or hire, any
employee, or independent contractor of the Parent to leave the employment (or
independent contractor relationship) thereof, whether or not any such employee
or independent contractor is party to an employment agreement, for the purpose
of competing with the Business of the Parent;
 
 
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(3) Attempt in any manner to solicit or accept from any customer of the Parent,
with whom Executive had significant contact during Executive’s employment by the
Parent (whether under this Agreement or otherwise), business of the kind or
competitive with the business done by the Parent with such customer or to
persuade or attempt to persuade any such customer to cease to do business or to
reduce the amount of business which such customer has customarily done or might
do with the Parent, or if any such customer elects to move its business to a
person other than the Parent, provide any services of the kind or competitive
with the business of the Parent for such customer, or have any discussions
regarding any such service with such customer, on behalf of such other person
for the purpose of competing with the Business of the Parent; or
 
(4) Interfere with any relationship, contractual or otherwise, between the
Parent and any other party, including, without limitation, any supplier,
distributor, co-venturer or joint venturer of the Parent, for the purpose of
soliciting such other party to discontinue or reduce its business with the
Parent for the purpose of competing with the Business of the Parent.
 
With respect to the activities described in Paragraphs (1), (2), (3) and (4)
above, the restrictions of this Section 13(b) shall continue during the Term of
this Agreement and for a period of two (2) years thereafter.
 
14. Section 409A.
 
The provisions of this Agreement are intended to comply with or are exempt from
Section 409A of the Code (“Section 409A”) and the related Treasury Regulations
and shall be construed in a manner consistent with the requirements for avoiding
taxes or penalties under Section 409A. The Parent and the Executive agree to
work together in good faith to consider amendments to this Agreement and to take
such reasonable actions necessary, appropriate or desirable to avoid imposition
of any additional tax under Section 409A or income recognition prior to actual
payment to the Executive under this Agreement.
 
It is intended that any expense reimbursement made under this Agreement shall be
exempt from Section 409A. Notwithstanding the foregoing, if any expense
reimbursement made under this Agreement shall be determined to be “deferred
compensation” subject to Section 409A (“Deferred Compensation”), then (a) the
right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit, (b) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year (provided that this clause (b) shall not be
violated with regard to expenses reimbursed under any arrangement covered by
Section 105(b) of the Code solely because such expenses are subject to a limit
related to the period the arrangement is in effect) and (c) such payments shall
be made on or before the last day of the taxable year following the taxable year
in which the expense was incurred.
 
With respect to the time of payments of any amount under this Agreement that is
Deferred Compensation, references in the Agreement to “termination of
employment” and substantially similar phrases, including a termination of
employment due to the Executive’s Disability, shall mean “Separation from
Service” from the Parent within the meaning of Section 409A (determined after
applying the presumptions set forth in Treasury Regulation Section
1.409A-1(h)(1)). Each installment payable hereunder shall constitute a separate
payment for purposes of Treasury Regulation Section 1.409A-2(b), including
Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made
within the terms of the “short-term deferral” rule set forth in Treasury
Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral”
rule. Each other payment is intended to be a payment upon an involuntary
termination from service and payable pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that
regulation, with any amount that is not exempt from Code Section 409A being
subject to Code Section 409A.
 
 
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Notwithstanding anything to the contrary in this Agreement, if the Executive is
a “specified employee” within the meaning of Section 409A at the time of the
Executive’s termination, then only that portion of the severance and benefits
payable to the Executive pursuant to this Agreement, if any, and any other
severance payments or separation benefits which may be considered Deferred
Compensation (together, the “Deferred Separation Benefits”), which (when
considered together) do not exceed the Section 409A Limit (as defined herein)
may be made within the first six (6) months following the Executive’s
termination of employment in accordance with the payment schedule applicable to
each payment or benefit. Any portion of the Deferred Separation Benefits in
excess of the Section 409A Limit otherwise due to the Executive on or within the
six (6) month period following the Executive’s termination will accrue during
such six (6) month period and will become payable in one lump sum cash payment
on the date six (6) months and one (1) day following the date of the Executive’s
termination of employment. All subsequent Deferred Separation Benefits, if any,
will be payable in accordance with the payment schedule applicable to each
payment or benefit. Notwithstanding anything herein to the contrary, if the
Executive dies following termination but prior to the six (6) month anniversary
of the Executive’s termination date, then any payments delayed in accordance
with this paragraph will be payable in a lump sum as soon as administratively
practicable after the date of the Executive’s death and all other Deferred
Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit.
 
For purposes of this Agreement, “Section 409A Limit” shall mean a sum equal to
(x) the amounts payable within the terms of the “short-term deferral” rule under
Treasury Regulation Section 1.409A-1(b)(4) plus (y) the amount payable as
“separation pay due to involuntary separation from service” under Treasury
Regulation Section 1.409A-1(b)(9)(iii) equal to the lesser of two (2) times: (i)
the Executive’s annualized compensation from the Parent based upon his annual
rate of pay during the Executive’s taxable year preceding his taxable year when
his employment terminated, as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1); and (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which the Executive’s employment is terminated.

 
15. Miscellaneous.
 
 (a) Neither the Executive nor the Parent may assign or delegate any of their
rights or duties under this Agreement without the express written consent of the
other; provided, however, that the Parent shall have the right to delegate its
obligation of payment of all sums due to the Executive hereunder, provided that
such delegation shall not relieve the Parent of any of its obligations
hereunder.
 
(b) During the term of this Agreement, the Parent (i) shall indemnify and hold
harmless the Executive and his heirs and representatives to the maximum extent
provided by the laws of the State of Delaware and by Parent’s bylaws and (ii)
shall cover the Executive under the Parent’s directors’ and officers’ liability
insurance on the same basis as it covers other senior executive officers and
directors of the Parent.
 
(c) This Agreement constitutes and embodies the full and complete understanding
and agreement of the parties with respect to the Executive’s employment by the
Parent, supersedes all prior understandings and agreements, whether oral or
written, between the Executive and the Parent, and shall not be amended,
modified or changed except by an instrument in writing executed by the party to
be charged. If any provision of this Agreement, or the application thereof,
shall for any reason and to any extent be invalid or unenforceable, then the
remainder of this Agreement and the application of such provision to other
persons or circumstances shall be interpreted so as reasonably to effect the
intent of the parties hereto.  The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that shall achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision. No waiver by either party of
any provision or condition to be performed shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
 
 
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(d) This Agreement shall inure to the benefit of, be binding upon and
enforceable against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The headings contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(f) All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when personally delivered, sent by registered or certified mail,
return receipt requested, postage prepaid, or by reputable national overnight
delivery service (e.g., Federal Express) for overnight delivery to the party at
the address set forth in the preamble to this Agreement, or to such other
address as either party may hereafter give the other party notice of in
accordance with the provisions hereof. Notices shall be deemed given on the
sooner of the date actually received or the third business day after deposited
in the mail or one business day after deposited with an overnight delivery
service for overnight delivery.
(g) This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, and each of the parties hereto
irrevocably consents to the jurisdiction and venue of the federal and state
courts located in the State of New York, County of New York, for any disputes
arising out of this Agreement, or the Executive’s employment with the Parent.
The prevailing party in any dispute arising out of this Agreement shall be
entitled to his or its reasonable attorney’s fees and costs.
(h) This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one of the same instrument. The parties hereto have executed this
Agreement as of the date set forth above.
(i) The Executive represents and warrants to the Parent, that he has the full
power and authority to enter into this Agreement and to perform his obligations
hereunder and that the execution and delivery of this Agreement and the
performance of his obligations hereunder will not conflict with any agreement to
which the Executive is a party.
(j) The Parent represents and warrants to the Executive that it has the full
power and authority to enter into this Agreement and to perform its obligations
hereunder and that the execution and delivery of this Agreement and the
performance of its obligations hereunder will not conflict with any agreement to
which the Parent is a party.
 
[Signature page follows immediately]
 
 
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IN WITNESS WHEREOF, the Executive and the Parent have caused this Executive
Employment Agreement to be executed as of the date first above written.
 
 
 
MAJESCO ENTERTAINMENT COMPANY
 
By:                                                                 
Name: __________________________________
Title:            ______________________________
Date Signed: _____________________________ 

 
 
 
 
Executive
Date Signed: ____________________________
 

 
 
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