Exhibit 10.1


 


MODSYS INTERNATIONAL,
LTD


 


September 15, 2015


 


Matt Bell


c/o Modern Systems Corporation


601 Union Street, Suite 4616


Seattle, WA 98101,


 


Dear Matt,


 


On behalf of the Board of Directors
(the “Board”) of ModSys International, Ltd, a company incorporated in Israel (the “Parent”) and its subsidiaries
including Modern Systems Corporation, a Delaware corporation (“MS-DEL” and collectively with the Parent, the “Company”),
I am pleased to share the following terms for employment:


 


1.            Position;
Role.


 


a.   Officer
Role. You will continue to serve in a full-time capacity as President and CEO for the Company. You will report to the Board.
By signing this letter, you represent and warrant to the Company that you are under no contractual commitments inconsistent with
your obligations to the Company. You agree that to the best of your ability and experience you will at all times loyally and conscientiously
perform all of the duties and obligations of your role which are required of you under this letter and to the reasonable satisfaction
of the Company.


 


b.   Board
Role. In connection with this letter, the Compensation Committee will recommend that the Board elect to serve as a director,
to the extent permissible under the Company’s bylaws and Articles of Association. If so elected to the Board you agree to
serve in such capacity without additional compensation. Further, if a majority of the directors requests you to resign from the
Board and/or any committees of the Board then you shall do so. Further, upon termination of your employment for any reason, the
Board will take a vote and a simple majority will decide if your board position is extended or terminated and to the extent applicable,
from the Board and any committees of the Board.


 


2.            Effective
Date; Term. The terms of this new offer will be effective as of the later of the date of this letter or the date it is executed
by you (referred to as “Effective Date”) and ending on the third anniversary (the “Term”), unless sooner
terminated as required by the Company’s Compensation Policy or under Paragraph 14 of this letter.


 


3.            Salary.
As a resident of the United States (“U.S.”) you will be an employee of MS-DEL. In connection with your position as
President and CEO (not as a Board member), you will continue to be paid a cash salary at a rate of twenty-five thousand U.S. Dollars
($25,000.00) per month, prorated for the actual period of employment which is equivalent to three hundred thousand U.S. dollars
($300,000.00) on an annualized basis and payable pursuant to the Company’s regular payroll policy (“Base Salary”).
This is a salaried exempt position, which is not subject to federal and state minimum wage and overtime laws. You will not be
eligible to receive overtime pay for hours worked in excess of 40 hours per workweek.


 








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4.            Bonus.


 


a.   Yearly
Performance RSUs. You will be eligible for three individual annual bonuses each with
a target amount of fifty thousand (50,000) Restricted Stock Units (each, “Yearly Performance RSUs”) of Parent, with
the Compensation Committee of the Board and you working in good faith and mutually agreeing upon performance criteria consistent
with Sections 2.3.9.2 – 2.3.9.5 of the Company’s Compensation Policy (“Performance Milestones”) promptly
following the execution of this letter. After the second quarter of the new calendar year (commencing in 2016) the Compensation
Committee and/or the Board will review the agreed-upon Performance Milestones and make a good faith determination with respect
to whether you met the Performance Milestones for the previous four quarters (with a shortened first year of review running for
only three quarters from the October 1, 2015 through June 30, 2016). If the annual agreed-upon Performance Milestones are met
then the corresponding annual Performance RSUs (i.e. 50,000 RSUs) will be fully vested as of that date. For avoidance of doubt,
if you do not meet the annual Performance Milestones then you the Annual Performance RSUs for that year will not vest and shall
expire as of the date you are notified of the Compensation Committee’s determination. Except as otherwise provided in this
Paragraph and as specifically approved by the Compensation Committee, the RSUs will be subject to the terms and conditions of
the Parent’s 2007 Award Plan (the “Plan”). The Plan, as amended,
and the applicable RSU award agreement, and vesting of the RSUs is contingent on your continued employment with the Company through
each vesting date. Following the vesting of the RSUs, you will receive one ordinary share of MDSY as payment for each vested RSU
(subject to tax withholding).


 


b.   Bonus
for Sale Transaction of Parent.


 


i.   Subject
to terms and conditions provided in this letter, consistent with Section 2.3.10 of the Company’s Compensation Policy (Special
Bonus) and provided that you remain employed in your current position with the Company immediately prior to the consummation of
a Sale Transaction and provided further that the Sales Proceeds are no less than twenty
five million dollars ($25,000,000), you shall have a contingent right to receive a payment equal to one percent (1%) of
the Sale Proceeds. 


 


ii.   For
this purposes of this Paragraph 4(b):


 


		1.	“Sale
                                         Proceeds” means the fair market value of the gross consideration received by the
                                         Company or its stockholders (e.g. cash, equity or a combination thereof) from a Sales
                                         Transaction; and



 


		2.	“Sales
                                         Transaction” means the sale or disposition of all or substantially all the Company's
                                         assets in one transaction from a third party or parties, taking into account such factors
                                         as the Board deems appropriate immediately prior to the consummation thereof. 



 






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5.            Restricted
Stock Units. The Compensation Committee will recommend to the Board that the Parent
grant you an award of one hundred thousand (100,000) Restricted Share Units of Parent (the “2015 RSU Grant”). Subject
to approval by the Board, the 2015 RSU Grant will be granted on the first regularly scheduled grant date after the Effective Date.
The 2015 RSU Grant will vest at any time after the 12 month anniversary of the date of grant, upon the earlier to occur of (i)
a Sales Transaction or (ii) your termination of employment by the Company for any reason other than for Breach of Trust (as defined
in the SOA (as defined below)) and provided such termination constitutes a “separation
from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) (each a “Triggering Event”), 1/36
of the RSUs will vest upon such Triggering Event for each full month of service, measured from the Effective Date through the
date of the Triggering Event.


 


Except as otherwise provided in this
Paragraph 5 the 2015 RSU grant will be on similar terms as provided in the Award Agreement between the parties dated September
6, 2012 (the “2012 Award Agreement”). Following vesting of the foregoing RSUs, you will receive one ordinary share
of MDSY as payment for each vested RSU (subject to tax withholding).


 


6.            Repricing
of Existing Restricted Stock Options. Whereas, subject to the terms of the Stock Option Agreement dated April 25, 2012 (the
“SOA”), and in accordance with generally accepted accounting principles, the Company has agreed to a one-time offer
to reprice 270,000 of your existing three hundred thousand (300,000) options to purchase Ordinary Shares in the Company (the “Existing
Options”) under the SOA. The remaining 30,000 Existing Options will be forfeited upon your acceptance of the repriced options.
The exercise price of the repriced options will be equal to the fair market value on the date of grant. Please check with your
tax advisor as the Company takes no responsibility for any adverse consequences arising from the repricing. You have until 5:00
PM Pacific Time of the second day following the Effective Date to notify the Compensation Committee that you wish to reprice your
Existing Options. For example, if the Effective Date is Tuesday, September 15, 2015 then your written notice must be received
by the Compensation Committee by 5 PM Pacific Time on Thursday, September 17, 2015.


 


7.            Benefits;
Vacation & Holidays. You will be eligible for all standard Company benefits, including health, dental, vision, life and
disability insurance. Health, dental, and vision insurance, 401(k) retirement savings plan and life insurance will be effective
the first day of the first of the month following thirty (30) days of benefit eligible employment,
Disability insurance will be effective on the first of the month following ninety
(90) days of benefit eligible employment. Employee matching for 401(k) contributions will be based on the Company’s
then-current plan documents. Your grant of three (3) weeks of vacation per year, accruing at a rate of five (5) hours per payroll
period, will continue as-is based on your original date of hire. In addition, U.S. employees observe eleven (11) standard holidays
and are given four (4) "floating" holidays. Company holidays are subject to change. Scheduling of vacation and personal
time should be arranged between you and the Board.


 


8.            Withholding
Taxes. All forms of compensation referred to in this letter are subject to applicable withholding and payroll taxes.


 






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9.            Proprietary
Information and Inventions Agreement. As a condition of your employment, you will be required to sign our Parent’s standard
Proprietary Information and Inventions Agreement for employees (“PIIA”), a copy of which is attached. It is fundamental
policy of the Company that it does not hire employees or consultants in order to obtain access to trade secrets or proprietary
information of any of their former employers. By accepting this job offer, you represent that (i) you will not violate the terms
of any non-competition, non-disclosure and non-solicitation agreements to which you may be bound by any prior employer and (ii)
you will not use any files or materials in connection with your employment with the Company that are trade secrets of or proprietary
information to another firm. Further, you acknowledge and agree to the restrictive covenants and other provisions set forth in
the PIAA during your employment and thereafter as provided, the terms of which are fully incorporated herein.


 


10.          Outside
Activities. While you render services to the Company, you will not engage in any other gainful employment, business or activity
without the written consent of the Company, which consent will not be unreasonably withheld. While you render services to the
Company, you also will not assist any person or organization in competing with the Company, in preparing to compete with the Company
or in hiring any employees of the Company.


 


11.          No
Conflicts. You represent that your performance of all the terms of this letter agreement will not breach any other agreement
to which you are a party.


 


12.          Contingencies.
Your acceptance of this offer, commencement and continuation of employment with the Company is and remains contingent upon the
successful completion and satisfactory outcome of a background, reference, drug/alcohol and credit check, as determined at the
sole discretion of the Company; your submission of proof, satisfactory to the Company, of your identity and your legal authorization
to work in the United States (if you fail to submit this proof, federal law prohibits us from hiring you), and the execution and
delivery of the PIIA to an officer of the Company.


 


13.          Employment
at Will. Your employment with the Company will be “at will,” meaning that either you or the Company will be entitled
to terminate your employment at any time and for any reason, with or without cause. You will not be entitled to receive any payments
under this letter or any policy or plan of Company as in effect from time to time that provides for payment of amounts on termination
of employment other than any and all previously earned, but as of yet unpaid, salary, and reimbursement of business expenses and
fringe benefits as of yet unpaid, by reason of Company electing not to renew or extend the terms provided for herein.


 


14.          Termination
of Employment. 


 


a.   Voluntary
Termination by You. At any time during the Term, you may terminate employment hereunder by giving the Company one hundred
and eighty (180) days’ prior written notice of the effective date of your last day of employment (“Employee Notice
Period”). During the Employee Notice Period you will be entitled to the same benefits including vesting as you had in place
prior to such notice (except for (i) Early Termination (as defined below), (ii) a Breach of trust or (iii) as otherwise provided
for in an agreement for the 2015 RSU Grant). The Company may, in its sole discretion, waive all or any part of the Employee Notice
Period and consider your termination effective on any such earlier date as it determines. Also, the Company may, in its sole discretion,
remove you from any assigned duties, assign you to other duties, or require you to remain away from its offices, during all or
any part of the Employee Notice Period or elect to accelerate your Base Salary for the remainder of the Employee Notice Period
and pay it to you in lieu thereof through the Company’s standard payroll process. In no event shall the payments made in
connection with the Employee Notice Period continue beyond your last day of employment if you voluntary elect to terminate early
(“Early Termination”) or exceed the amount that you would have received had your employment continued through expiration
of the Term.


 






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b.   Termination
for Convenience During the Term. The Company may terminate your employment hereunder for convenience at any time during the
Term of this Agreement by giving you three hundred and sixty five (365) days’ written notice (“Employer Notice Period”)
provided, however, the Company may, in its sole discretion, remove you from any assigned duties, mutually agree on other duties,
or require you to remain away from its offices, during all or any part of the Employer Notice Period or elect to accelerate your
Base Salary for the remainder of the Employer Notice Period and pay it to you in lieu thereof through the Company’s standard
payroll process. In no event shall the payments made in connection with the Employer Notice Period exceed the amount that you
would have received had your employment continued through expiration of the Term. For the sake of clarity all vesting will continue
during the Employer Notice Period except (i) for Early Termination, (ii) for a Breach of Trust or (iii) as otherwise provided
for in an agreement for the 2015 RSU Grant.


 


c.   Other
Obligations. A termination of employment pursuant to this Paragraph 14 will not affect any rights that you may have pursuant
to any agreement, policy, plan, program or arrangement of Company providing employee benefits, which rights will be governed by
the terms thereof, including the SOA and Plan; provided that to the extent that you are eligible to receive payments or benefits
by reason of termination of employment pursuant to any other severance agreement or employee plan (collectively, “Other
Severance Agreements”), the amounts otherwise receivable under Paragraph 14 will be reduced by the amounts actually paid
and benefits actually provided pursuant to the Other Severance Agreements, but not below zero, to avoid duplication of payments
so that the total amount payable or value of benefits receivable hereunder and under the Other Severance Agreements is not any
more or less than the amounts so payable or value so receivable had such benefits been paid in full under the arrangement that
provides the greatest total payments and benefits.


 


15.          Remedies.
In addition to any other remedies provided, the parties agree that compliance with Paragraphs 9 and 14(a) of this Agreement and
the PIIA are necessary to protect the business and goodwill of Company, and that any breach of such Paragraphs and the PIIA will
result in irreparable and continuing harm to Company, for which monetary damages may not provide adequate relief. Accordingly,
in the event of any actual or threatened breach of Paragraphs 9 and 14(a) and the PIIA by you, Company and you agree that (i)
Company shall be entitled to all appropriate remedies, including but not limited to temporary restraining orders and injunctions
enjoining or restraining such actual or threatened breach and (ii) Company may cease providing consideration provided to you under
this letter. Executive hereby consents to the issuance of an injunction by any court of competent jurisdiction, without the need
for posting any bond. Withholding Authorization. In addition to any remedies set forth in this letter, to the fullest extent permitted
under the laws of the State of Employment, you authorize Company to withhold from any severance payments otherwise due to you
and from any other funds held for your benefit by Company, any damages or losses sustained by Company as a result of any material
breach or other material violation of this Agreement by Executive, pending resolution of the underlying dispute.


 






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16.          Amendment.
This letter agreement may not be amended or modified except by an express written agreement signed by you and a duly authorized
officer of the Company.


 


17.          Entire
Agreement. This letter contains all of the terms of your employment with the Company and supersedes any prior understandings
or agreements, whether oral or written, between you and the Company, except as documented in this letter. It is specifically understood
and accepted that immediately prior to the effectiveness of this letter that the Company has fulfilled all of its obligations
to you related to your employment and this letter supersedes all oral and written employment offers and agreements between you
and the Company to the Effective Date other than any RSUs granted in 2012 Award Agreement
or options to purchase Ordinary Shares in the SOA, as well as all conflicting provisions of Company’s human resources
and other policies set by the Company. Notwithstanding the foregoing, your confidentiality and other restrictive covenant obligations,
as set forth herein, are in addition to, and not in limitation or substitution of, any similar or related obligations under Company
policy or applicable law you have.


 


We hope that you find the foregoing
terms acceptable. This offer, if not accepted, will expire at the close of business (PST) on October 1, 2015. Please
indicate your acceptance of our offer by signing one copy of this letter and returning to our US Headquarters at Modern Systems
Corporation, 601 Union Street, Suite 4616, Seattle, WA 98101, or via email at dfrench@modernsystems.com. Should you have any questions,
please don't hesitate to contact me.


 


	Yours Sincerely,	 
	 	 	 
	Carla Corkern	 
	 	 	 
	By:	/s/ Carla Corkern	 
	Title:	Audit Committee Chairperson	 
	Date:	10/1/15



	 


 


I
have read and accept this employment offer:





 


	/s/ Matt Bell	 
	Matt Bell	 
	Date:
    	10/1/15	 


 


 


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