AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of
the 31st day of March, 2008, by and between Access Integrated Technologies,
Inc., a Delaware Corporation (the "Company"), and A. Dale Mayo (the "Employee").

 

WITNESSETH:

 

WHEREAS, the Employee is employed as President, Chief Executive Officer and
Chairman of the Board of Directors of the Company pursuant to an Employment
Agreement effective in December, 2000, (the “Original Agreement”), which was
amended and restated as of December 15th, 2005 (the “Restated Agreement”); and

 

WHEREAS, the Company and the Employee wish to extend his employment by entering
into a further Amended and Restated Employment Agreement (the “Agreement”), upon
the terms and conditions set below;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and intending to be legally bound hereby, the parties agree as
follows:

 

1.        Employment. The Company agrees to continue to employ the Employee, and
the Employee agrees to continue to be employed by the Company, for the period
stated in Section 3 hereof and upon the other terms and conditions herein
provided.

 

2.         Position and Responsibilities. The Employee shall serve as President,
Chief Executive Officer and Chairman of the Board of Directors of the Company
(the “Board”). The Employee shall be responsible for such duties as are
commensurate with his office and as may from time to time be reasonably assigned
to the Employee by the Board, as the case may be.

 

3.         Term. The term of this Agreement shall be from the April 1, 2008 (the
“Effective Date”) through March 31, 2011. Upon the expiration of this Agreement
on March 31, 2011, either the Employee or the Board may exercise the option to
require that the Employee cease to serve as President, and instead assume the
role of Chairman and Chief Executive Officer of the Company for a term of three
years, with both his time commitment and Base Salary reduced by 50% from their
levels immediately before such change in roles. In such event, the provisions of
Section 4(b)(but ignoring the reference to $240,000), Section 4(c), Section 5
and Section 9 of this Agreement shall continue in full force and effect. Nothing
in the previous two sentences shall preclude the parties from negotiating in
good faith for the Employee to continue as full time President and Chief
Executive Officer after the expiration of this Agreement.

 

--------------------------------------------------------------------------------

 

4.

Compensation, Reimbursement of Expenses.

 

(a)        Salary. For all services rendered by the Employee in any capacity
during his employment under this Agreement, including, without limitation,
service as an executive, officer, director, or member of any committee of the
Company or of any subsidiary, affiliate, or division thereof, the Company shall
pay the Employee as compensation a salary (“Base Salary”) at the minimum rate of
$600,000 per year commencing with the Effective Date, subject to increase for
subsequent years in the sole discretion of the Compensation Committee of the
Board.

 

(b)       Bonus. Employee shall be eligible for a bonus based on overall Company
performance with goals to be established by the Committee for Threshold level,
Target level and Maximum level payouts. Achievement of Target level will result
in a bonus of 75% of Base Salary; achievement of Threshold level will result in
a bonus of 50% of Target level payout or $240,000, whichever is greater; and
achievement of Maximum level will result in a bonus of 175% of Target level
payout. Intermediate results will pay a bonus based upon straight line
interpolation. Any bonus over the Threshold level will be paid 50% in cash and
50% in restricted Company stock with a three-year prorated vesting period.

 

(c)        Reimbursement of Expenses. The Company shall pay, or reimburse the
Employee for, all reasonable travel, entertainment and other expenses incurred
by the Employee in the performance of his duties under this Agreement.

 

(d)       Stock Option Grant. Employee shall be granted 750,000 stock options
under the Second Amended and Restated 2000 Stock Option Plan of Access
Integrated Technologies, Inc. (the “Stock Option Plan”). To the extent the
Company does not have a sufficient number of shares authorized, any excess grant
will be subject to sufficient shares becoming available. These options will be
non-statutory options. The grant will represent a three-year grant. The Employee
will not be eligible to receive any further equity grant during the term of this
Agreement. The options shall have an exercise price of $3.25. The grant date
shall be the date first above written and the options will have a duration of
six years. The options shall vest on the earlier to occur of the third
anniversary of the Effective Date, the death of Employee, and a Change in
Control, provided the Employee remains an employee of the Company through such
date. Furthermore:

 

(i)        on the first anniversary of the Effective Date, one-third of the
options will vest if shares of the Company have traded at $7.00 or more for at
least ten consecutive trading days during the first year of this Agreement;

 

(ii)       on the first anniversary of the Effective Date, two-thirds of the
options will vest if shares of the Company have traded at $9.50 or more for at
least ten consecutive trading days during the first year of this Agreement;

 

(iii)      on the first anniversary of the Effective Date, all of the options
will vest if shares of the Company have traded at $12.00 or more for at least
ten consecutive trading days during the first year of this Agreement;

 

2

 

--------------------------------------------------------------------------------

 

(iv)      on the second anniversary of the Effective Date, one-third of the
options which have not previously vested under (i) or (ii) will vest if shares
of the Company have traded at $7.00 or more for at least ten consecutive trading
days during the first two years of this Agreement;

 

(v)       on the second anniversary of the Effective Date, two-thirds of the
options which have not previously vested under (i) or (ii) will vest if shares
of the Company have traded at $9.50 or more for at least ten consecutive trading
days during the first two years of this Agreement; and

 

(vi)      on the second anniversary of the Effective Date, all of the options
which have not previously vested under (i) or (ii) will vest if shares of the
Company have traded at $12.00 or more for at least ten consecutive trading days
during the second year of this Agreement.

 

5.         Participation in Benefit Plans. Employee will be entitled to
participate in all benefit plans provided to senior executives of the Company;
provided that:

 

(a)       The Company will pay the full cost of medical and dental coverage for
the Employee and his eligible dependents;

 

(b)       The Company will pay for the long term care policy currently in force
for the Employee which provides a monthly benefit of $10,200, with home care
covered at 100%.  The policy has a waiting period of 90 days and a benefit
period of seven years; 

 

(c)       The Company will provide the Employee with an automobile allowance of
$17,057 annually adjusted for increases in the consumer price index;

 

(d)       The Company will pay for the $5 million life insurance policy
currently in force, the proceeds of which shall be used to purchase Employee’s
stock from Employee’s estate in the event of Employee’s death.

 

6.         Termination. (a) The Company shall have the right to terminate this
Agreement prior to the expiration of the term set forth in Section 3 only upon
the conviction in a recognized court of law in the United States of Employee of
theft or embezzlement of money or property, fraud, unauthorized appropriation of
any tangible or intangible assets or property or any other felony involving
dishonesty or moral turpitude. The Company shall have no obligations to the
Employee for any period subsequent to the effective date of any termination of
this Agreement pursuant to this Section 6, except for the payment of salary and
benefits earned prior to such termination.

 

(b)       In the event that the Company terminates the Employee's employment for
reason(s) other than those set forth in Section 6(a) prior to expiration of this
Agreement under Section 3 hereof or if the Employee resigns for Good Reason, the
Employee shall be entitled to continue to receive his Base Salary (plus bonuses
calculated at Target level as set forth in Section

 

3

 

--------------------------------------------------------------------------------

4 hereof) until the expiration of this Agreement under Section 3 hereof. During
such period, the Employee shall have a duty to seek other employment, but shall
not be required to accept any position other than a position (i) as a senior
executive officer with the same general responsibilities that the Employee
possessed at the Company at the time of the Employee's termination from the
Company and (ii) with a company equal or larger in earnings and tangible net
worth than the Company at the time of the Employee's termination. The Employee
may, however, accept any full-time position at any level and at any salary with
any entity, profit or non-profit, and the Employee, by accepting such
employment, shall be conclusively deemed to have fulfilled his duty to seek
employment under this Section 6. The Company shall be entitled to reduce the
salary (including bonus) paid to the Employee during his employment by another
entity by an amount equal to the amount earned by the Employee from any such
Employment during such period. In the event that a dispute shall arise as to
this Section 6(b), (i) the Company shall continue to pay the Employee's salary
(including bonus) into an escrow account not under the control of the Company
and (ii) the Company shall pay the legal fees and expenses incurred by the
Employee in litigating any dispute under this Section 6 in the event that the
Employee prevails in such dispute.

 

(c)       If the Company terminates the Employee’s employment for reason(s)
other than those set forth in Section 6(a), or if the Employee resigns for Good
Reason, in each event after a Change in Control (as defined in the Stock Option
Plan), Employee will receive a lump sum payment equal to the his then Base
Salary plus bonus at Target level, multiplied by the greater of (i) two or (ii)
a fraction, the numerator of which is the number of months remaining in the term
of this Agreement, and the denominator of which is twelve; provided however that
such payment shall be limited to an amount which would not result in an “excess
parachute payment” as that term is defined in Internal Revenue Code section
280G.

 

For these purposes, “Good Reason”  means, without the Employee's consent,  (i) a
reduction in the Employee’s title or job responsibilities compared with the
Employee’s title or job responsibilities on the date of this Agreement, (ii) any
requirement that the Employee relocate to a work location more than 50 miles
from his current location; or (iii) any material breach of this Agreement by the
Company, which breach is not cured by the Company within 3 business days of the
Employee notifying the Company that it is in breach.

 

7.         Disability.      If the Employee is completely disabled in the
written opinion of a physician mutually agreeable to the Employee (or his legal
representative) and the Company, or in the event that no such physician is
chosen, if the Employee is unable to perform his services on substantially a
full-time basis for a period in excess of six consecutive months, the Company
shall be entitled to reduce the salary (including bonus) paid to the Employee by
subtracting from such salary and bonus (i) the salary of such person as is hired
by the Company to perform the office of President, Chief Executive Officer, and
Chairman of the Board of Directors and (ii) any amounts received by the Employee
from any disability insurance policy maintained by the Company in favor of the
Employee; provided, however, that in no event shall the salary (including bonus)
paid to the Employee plus any disability insurance proceeds actually paid to the
Employee be less than the minimum annual salary applicable in such year. In no
event will Employee's salary and bonus be reduced by more than 50% during the
first three years of this Agreement.

 

4

 

--------------------------------------------------------------------------------

 

8.         Death. The Employee's employment shall be terminated upon the
Employee's death; provided, however, that in such event the Company shall pay to
the Employee's estate an amount equal to the Employee's salary plus bonus for a
six-month period immediately following the Employee's death. Such payment may be
made in a lump sum immediately following such termination or may be paid over
the six-month period in accordance with the normal payroll practices of the
Company, at the discretion of the Board.

 

 

9.

Confidential Information; Non-Competition; Enforceability.

 

(a)       The Employee shall not at any time, whether before or after the
termination of this Agreement, divulge, furnish or make accessible to anyone
(other than in the ordinary course of the business of the Company or any
subsidiary thereof) any knowledge or information with respect to confidential or
secret designs, processes, formulae, plans, devices, material, or research or
development work of the Company or any subsidiary thereof, or with respect to
any other confidential or secret aspect of the business of the Company or any
subsidiary thereof.

 

(b)       For a period of one year after the termination of this Agreement, the
Employee shall not, directly or indirectly, engage or become interested in (as
owner, stockholder, partner or otherwise) the operation of any business similar
to or in competition (direct or indirect) with the Company within the United
States. If any court construes the covenant in this Section 9 or any part
thereof, to be unenforceable because of its duration or the area covered
thereby, the court shall have the power to reduce the duration or area to the
extent necessary so that such provision is enforceable.

 

(c)       The covenants set forth in this Section 9 shall be deemed separable
and the invalidity of any covenant shall not affect the validity or
enforceability of any other covenant. If any period of time or limitation of
geographical area stated in Section 9(b) is longer or greater than the maximum
period or geographical area permitted by law, then the period of time or
geographical area stated therein shall be deemed to be such maximum permissible
period of time or geographical area, as the case may be. All parties recognize
that the foregoing covenants are a prime consideration for the Company to enter
into this Agreement and that the Company's remedies at law for damages in the
event of any breach shall be inadequate. In the event that there is a breach of
any of the foregoing covenants, the Company, shall be entitled to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance of any such covenants by the Employee or to enjoin the Employee from
performing acts in breach of any such covenant.

 

10.       Tax Withholding. The Company shall withhold from any benefits payable
under this Agreement all federal, state, local or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

 

11.       Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes any prior employment
agreement

 

5

 

--------------------------------------------------------------------------------

between the Company or any predecessor of the Company and the Employee,
including, without limitation, the Original Agreement and the Restated
Agreement.

 

 

12.

General Provisions.

 

(a)       Nonassignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Employee or his beneficiaries or legal
representatives without the Company's prior written consent; provided, however,
that nothing in this Section 12(a) shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder following his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to the person or
persons entitled thereto.

 

(b)       No Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

 

(c)       Binding Agreement. This Agreement shall be binding upon, and inure to
the benefit of, the Employee and the Company and their respective permitted
successors and assigns.

 

(d)       Compliance with 409A. Any severance type of payments made under this
Agreement will not commence until six months after the Employee’s termination of
employment and shall otherwise comply with Code section 409A.

 

 

13.

Modification and Waiver.

 

(a)       Amendment of Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto, and approved by
a majority of the members of the Board who were not nominated by Employee.

 

(b)       Waiver. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

 

14.       Severability. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision,

 

6

 

--------------------------------------------------------------------------------

together with all other provisions of this Agreement, shall to the full extent
consistent with law continue in full force and effect.

 

15.       Headings. The headings of sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

 

16.       Governing Law. This Agreement has been executed and delivered in the
State of New York, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of said State other than the conflict
of laws provisions of such laws.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
officers thereunto duly authorized, and the Employee has signed this Agreement,
all as of the day and year first above written.

 

 

 

 

ACCESS INTEGRATED TECHNOLOGIES, INC.

 

By:

 /s/ Gary S. Loffredo

 

 

 

Gary S. Loffredo

Title: Senior Vice President—Business Affairs, General Counsel and Secretary

 

 

 

 

 

Employee

 

 /s/ A. Dale Mayo

 

 

A. Dale Mayo

 

 

 

7