Document:

June 23,
2010

     

    Via
E-mail

     

    Mr. James
Dole

    23
Brunson Way

    Penfield,
New York 14526

    jdole13@yahoo.com

     

    Dear
Jim:

     

    I am
delighted to extend this offer of employment to you for the full-time, exempt
position of Chief Financial Officer, Treasurer and Senior Vice President,
Finance of WorldGate Communications, Inc. (the “Company”). Details of this offer
are contained below:

     

    
      	
               
      

            	
              ·

            	
              Reporting:  You
      will report directly to the Chief Executive Officer of the
      Company.

            

    

     

    
      	
               
      

            	
              ·

            	
              Salary:  Your
      starting salary will be $8,076.92, paid bi-weekly, which equates to
      approximately $210,000 annually.

            

    

     

    
      	
               
      

            	
              ·

            	
              Location:  Your
      primary work location will be at the Company’s office location in the
      Rochester, NY area.  Travel to Trevose, Pennsylvania, Concord,
      North Carolina and other locations would be required on a periodic
      basis.

            

    

     

    
      	
               
      

            	
              ·

            	
              Employer:  Your
      employment will be with WorldGate Service, Inc., a subsidiary of the
      Company.

            

    

     

    
      	
               
      

            	
              ·

            	
              Severance:  You
      will be entitled to severance payments in the amount of six (6) months’
      salary and benefits continuation should the Company terminate your
      employment for any reason without
Cause.

            

    

     

    
      	
               
      

            	
              o

            	
              “Cause”
      shall be determined in good faith by the board of directors of the
      Company, and shall mean: (i) your willful or continued misconduct
      (provided that the Company shall provide you with written notice of any
      continued misconduct, and you shall have 5 business days from the date of
      such notice to cure such continued misconduct), breach of fiduciary duty
      or gross negligence in the performance (or failure thereof) of your
      duties; (ii) your intentional failure or refusal to perform lawfully
      assigned duties consistent with your position; (iii) your material breach
      of this Agreement; or (iv) your conviction of or entering a plea of nolo
      contendere to any felony or any crime (whether or not a felony) involving
      dishonesty or fraud; provided, however, that the Company shall provide you
      with written notice of any failure or breach described in clauses (ii) or
      (iii) of this definition, and you shall have 5 business days from the date
      of such notice to cure such failure or breach and, provided further, that
      your mental or physical incapacity due to illness, accident or otherwise,
      shall not constitute “Cause” as defined
herein.

            

    

     

    
      	
               
      

            	
              ·

            	
              Stock Option
      Plan:  Our Compensation Committee of the Company’s board
      of directors periodically reviews new and current employees with respect
      to the issuance of an initial and/or additional stock option grants to
      serve as an incentive for their continued contribution to the growth of
      the Company and considers the recommendations of management with respect
      to these grants.  At the next meeting of the Compensation
      Committee following your commencement of employment with the Company, a
      recommendation will be made to the Compensation Committee for the initial
      grant to you of an option to purchase 1,500,000 shares of our Company’s
      common stock. The option would vest 25% per year beginning on the one year
      anniversary of the grant of the option and will have a strike price to be
      set by the committee based on the fair market value of the Company’s
      shares as of the date of grant.  The Company’s board of
      directors (or a committee thereof) has the sole authority for all grants
      of options of the Company’s common
stock.

            

    

     

    
      
        
          
            
              	
                      

                    	
                      

                    

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              ·

            	
              Cash Bonus
      Plan:  We expect that the Company’s board of directors
      will create a cash incentive bonus plan for the Company’s employees, which
      will contain objectives that, if and when achieved by the Company, will
      reward employees with cash compensation. As and when such new cash bonus
      plan is implemented, you will participate in it at the executive level
      with a minimum annual cash bonus equal to 50% of your then current base
      salary.

            

    

     

    
      	
               
      

            	
              ·

            	
              Benefits:  As
      a full-time employee, you will be eligible for participation in our health
      plan and all welfare benefits sponsored by the Company.  These
      benefits are effective on your first date of employment.  In
      addition, you will be eligible to participate in the Company’s 401(k)
      Employee Savings Plan, once any eligibility criteria are
    met.

            

    

     

    
      	
               
      

            	
              ·

            	
              Combined Time Off
      (“CTO”):  CTO (which includes sick, personal and vacation
      days) will accrue starting your first day of employment.  You
      will accrue 2 days of CTO per month based on your start
      date.  This equates to 24 days annually.  You will be
      otherwise subject to the Company’s CTO policy, including the annual
      expiration of CTO if not used.  You will be eligible for paid
      Company designated holidays on your first day of
    employment.

            

    

     

    
      	
               
      

            	
              ·

            	
              Formal Employment
      Contracts:  The Company has typically not entered into
      formal employment contracts with its executives and currently does not
      plan to do so. If the employment terms of other executives do become
      memorialized in formal employment contracts, and you wish that your terms
      be so memorialized as well, the Company will be happy to do
      so.

            

    

     

    
      	
               
      

            	
              ·

            	
              Officer
      Appointment:  We expect that the Company’s board of
      directors will, as soon as it is practically possible, appoint you as an
      officer of the Company with the title of Chief Financial Officer,
      Treasurer and Senior Vice President, Finance.  In addition, we
      expect that the Company’s board of directors will authorize your
      appointment as a director and officer of each of the following
      subsidiaries of the Company: WorldGate Service, Inc. and WorldGate
      Finance, Inc.

            

    

     

    
      	
               
      

            	
              ·

            	
              Company Policies and
      Procedures.  You agree to be subject to the Company’s
      policies and procedures applicable to all employees, including agreeing to
      execute the Company’s Employee Confidential Information, Nonsolicitation
      and Invention Assignment Agreement.  For your reference, the
      form of the Company’s Employee Confidential Information, Nonsolicitation
      and Invention Assignment Agreement is enclosed with this offer
      letter.

            

    

     

    This
offer is contingent upon (1) the receipt of your signed acceptance of this
letter, (2) the approval of the board of directors of the Company and (3) the
successful completion of our standard background
investigation.  Please note that this letter does not constitute a
contract of permanent employment.  Although the terms and conditions
of this offer have been discussed by the board of directors, formal approval of
the board of directors is expected to be obtained promptly upon your signed
acceptance of this letter.

     

    Employees
are employed by the Company or WorldGate Service, Inc., as the case may be, in
an at-will employment relationship, and may be terminated by either the employee
or the Company or WorldGate Service, Inc., as the case may be, at any time, with
or without notice, except as provided herein, with or without cause, and for any
reason or no reason at all.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    We are
hoping that you can start July 13, 2010.  On your first day, in order
to facilitate the hiring process, please be prepared to provide documentation
that establishes your employment eligibility to work in the U.S. (in accordance
with the Immigration Reform and Control Act of 1986).  Your US
passport is best.

     

    If you
agree with the conditions stated above, please sign below and fax to
215-354-1049, Attention: Christopher Vitale, SVP, General Counsel and Secretary,
or email to cvitale@wgate.com.

     

    If you
have any questions, please contact me.  Welcome to
WorldGate!  I am looking very much forward to working with you, and I
know the board of directors is looking forward to your contributions to the
Company’s future successes.

     

    Sincerely,

     

    /s/
George E. Daddis, Jr.

     

    George E.
Daddis, Jr.

    President
and Chief Executive Officer

    WorldGate
Communications, Inc.

     

    
      
        
          	
                  Accepted
      By:   

                	
                  /s/ James Dole

                	 
      	
                  Date: June 23,
      2010

                
	 
      	
                  James
      Dole

                	 
      	 
      

        

      

    

    
      
         

      

      
        3WORLDGATE
COMMUNICATIONS, INC.

    2010
STOCK INCENTIVE PLAN

    

    NONSTATUTORY STOCK OPTION
GRANT AGREEMENT

     

    This
NONSTATUTORY STOCK OPTION GRANT AGREEMENT (the “Agreement”), dated as
of [  ], 2010 (the “Date of Grant”), is
delivered by WorldGate Communications, Inc. (the “Company”) to
[  ] (the “Participant”).

     

    RECITALS

     

    WHEREAS,
the Company maintains the WorldGate Communications, Inc. 2010 Stock Incentive
Plan (the “Plan”) for the
benefit of its and its Participating Companies’ (as defined in the Plan)
employees, non-employee directors, and consultants; and

     

    WHEREAS,
unless otherwise defined herein, capitalized terms used but not defined herein
shall have the meanings given to them in the Plan.

     

    NOW,
THEREFORE, the parties to this Agreement, intending to be legally bound hereby,
agree as follows:

     

    1.           Grant of
Option.  Subject to the terms and conditions set forth in this
Agreement and in the Plan, the Company hereby grants to the Participant a
nonstatutory stock option (the “Option”) to purchase
[  ] shares of Stock, at an exercise price of $[  ] per
share of Stock.

     

    2.           Exercisability of
Option.   The Option shall become exercisable on the
following dates, if the Participant continues to provide Service to an employer
within the Participating Company Group from the Date of Grant through the
applicable date:

     

    
      
        
          
            
              
                	
                        Date

                      	 	
                        Shares for Which the Option is Exercisable

                      	 
	
                        First
      year anniversary of the Date of Grant

                      	 	 	25	%
	
                        Second
      year anniversary of the Date of Grant

                      	 	 	25	%
	
                        Third
      year anniversary of the Date of Grant

                      	 	 	25	%
	
                        Fourth
      year anniversary of the Date of Grant

                      	 	 	25	%

              

            

          

        

      

    

     

    If the
foregoing schedule would produce fractional shares of Stock, the number of
shares of Stock for which the Option becomes exercisable shall be rounded down
to the nearest whole share of Stock.  The Option shall become fully
exercisable on the fourth anniversary of the Date of Grant, provided that the
Participant is providing Service to the Participating Company Group on such
date.

     

    3.           Term of
Option.  The Option shall have a term of ten (10) years from
the Date of Grant, and shall terminate at the expiration of that period, unless
it is terminated at an earlier date pursuant to the provisions of this Agreement
or the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.           Exercise
Procedures.

     

    (a)           Subject
to the provisions of Paragraphs 2 and 3 above, the Participant may exercise the
Option in the manner provided in this Agreement and in the Plan by delivering to
the Company written notice of intent to exercise, specifying the number of
shares of Stock as to which the Option is to be exercised and the method of
payment.

     

    (b)           The
obligation of the Company to deliver shares of Stock upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the
Committee, including such actions as Company counsel shall deem necessary or
appropriate to comply with relevant securities laws and
regulations.  The Company may require that the Participant (or other
person exercising the Option after the Participant’s death) represent that the
Participant is purchasing the shares of Stock for the Participant’s own account
and not with a view to or for sale in connection with any distribution of the
shares of Stock, or such other representations as the Committee deems
appropriate.  No portion of the Option may be exercised during a
period which the Committee designates in writing as a prohibited exercise period
or if the issuance of the shares upon such exercise would constitute a violation
of any applicable federal or state securities laws or other laws or
regulations.

     

    (c)           All
obligations of the Company under this Agreement shall be subject to the rights
of the Company as set forth in the Plan to withhold amounts required to be
withheld for any taxes.

     

    5.           Grant Subject to Plan
Provisions.  This Option grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan.  This Agreement,
together with the Plan, represents the entire agreement between the
parties.  The grant and exercise of the Option and this Agreement are
subject to interpretations, regulations and determinations concerning the Plan
established from time to time by the Committee in accordance with the provisions
of the Plan, including, but not limited to, provisions pertaining to (i) rights
and obligations with respect to withholding taxes, (ii) the registration,
qualification or listing of the shares of Stock, (iii) changes in capitalization
of the Company, and (iv) other requirements of applicable law.  By
accepting this Option, the Participant agrees to be bound by the terms of the
Plan and this Agreement and that all decisions and determinations of the
Committee with respect to the Agreement shall be final and binding on the
Participant and the Participant’s beneficiaries.

     

    6.           No Employment or Other
Rights.  The grant of this Option shall not confer upon the
Participant any right to be retained in the Service of the Participating Company
Group and shall not interfere in any way with the right of the applicable
Participating Company to terminate the Participant’s Service at any
time.  The right of the applicable Participating Company to terminate
at will the Participant’s Service at any time for any reason is specifically
reserved.

     

    7.           No Stockholder
Rights.  Neither the Participant, nor any person entitled to
exercise the Participant’s rights in the event of the Participant’s death, shall
have any of the rights and privileges of a stockholder with respect to the
shares of Stock subject to the Option, until certificates for shares of Stock
have been issued upon the exercise of the Option.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    8.           Applicable
Law.  The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without giving effect to the conflicts of
laws provisions thereof.

     

    9.           Notice.  Any
notice to the Company provided for in this instrument shall be addressed to the
Company in care of the Board, Attn: Stock Options at the Company’s corporate
headquarters, and any notice to the Participant shall be addressed to such
Participant at the current address shown on the payroll records of the
applicable Participating Company, or to such other address as the Participant
may designate to the applicable Participating Company in writing.  Any
notice shall be delivered by hand, sent by telecopy or enclosed in a properly
sealed envelope addressed as stated above, registered and deposited, postage
prepaid, in a post office regularly maintained by the United States Postal
Service.

     

    [SIGNATURE PAGE
FOLLOWS]

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company has caused its duly authorized officers to execute
and attest this Agreement, and the Participant has executed this Agreement,
effective as of the Date of Grant.

    

    
      
        
          	 	
                  WORLDGATE
      COMMUNICATIONS, INC.

                
	 	 
      
	 	
                  By:

                	 
      	 
      
	 	 
      	
                  Name:

                	 
      
	 	 
      	
                  Title:

                	 
      

        

      

    

     

    
      
        
          	
                  ATTESTED
      BY:

                
	 
      
	 
      
	
                  Name:

                
	
                  Title:

                

        

      

    

     

    I hereby
accept the Option described in this Agreement, and I agree to be bound by the
terms of the Plan and this Agreement. I hereby further agree that all of the
decisions and determinations of the Committee shall be final and
binding.

    

    
      
        
          
            	 	
                    Participant:

                  	 
      	 
      
	 	 
      	
                    Name:
      [  ]

                  	 
      

          

        

      

    

     

    
      
        
          
            	 	
                    Date:

                  	 
      	 
      

          

        

      

    

     

    
      
         

      

      
        4

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