EX-10.2 6 file003.htm SEVERANCE AGREEMENT OF CARL YANKOWSKI
CARL YANKOWSKI EMPLOYMENT AGREEMENT
 
 
         This Agreement is entered into as of August 24, 2004 (the "Effective
Date") by and between Majesco Sales Inc. ("Majesco"), Majesco Holdings Inc., a
Delaware corporation, ("Holdings") (Majesco and Holdings collectively referred
to herein as the "Company") and Carl Yankowski ("Executive").
 
     1. Duties and Scope of Employment.
 
     (a) Positions and Duties. As of the Effective Date, Executive will serve as
Chairman and Chief Executive Officer ("CEO") of each of Majesco and Holdings and
will report directly to the Holdings' Board of Directors (the "Holdings'
Board"). Executive will render such business and professional services in the
performance of his duties, consistent with Executive's position as the CEO, as
will reasonably be assigned to him by the Holdings' Board. The period of
Executive's employment under this Agreement is referred to herein as the
"Employment Term."
 
     (b) Board Membership. It is the intention of the parties that Executive
shall serve as a member of the Holdings' Board and the Company shall nominate
Executive to serve on the Holdings' Board in connection with each meeting of
Holdings' stockholders in which Executive would need to be re-elected in order
to continue serving on the Holdings' Board. Executive's service as a member of
the Holdings' Board will be subject to any required approval by Holdings'
shareholders.
 
     (c) Obligations.
 
     (I) During the Employment Term and except as provided in Section 1(c)(II)
below, Executive agrees that he will (i)devote Executive's full business efforts
and time to the Company, (ii) devote all of his business time and attention, his
best efforts, and apply his skill and ability to promote the interest of the
Company; (iii) carry out his duties in a professional and competent manner and
faithfully serve the Company and (iv) generally promote the interest of the
Company.
 
     (II) The Company may from time to time establish rules, regulations and
policies and Executive shall faithfully observe these in the performance of his
duties; provided that any such rules, regulations and policies shall not serve
to amend any provisions of this Agreement. For the duration of the Employment
Term, Executive agrees not to actively engage in any other incremental new
employment, occupation, or consulting activity for any direct or indirect
remuneration without the prior approval of the Holdings' Board (which approval
will not be unreasonably withheld); provided, however, that Executive may,
without the approval of the Holdings' Board, (i) serve in any capacity with any
civic, educational, or charitable organization, and (ii) continue to serve as a
chairman, director, member or partner of Avidyne, Inc., Informatica Corporation,
CRF, Inc., Westerham Group, LLC, Gemba, LLC, TNX, Inc. and Chase Corporation
provided such services do not interfere with Executive's obligations to the
Company.
 
     2. At-Will Employment. Executive and the Company agree that Executive's
employment with the Company constitutes "at-will" employment. Executive and the
Company acknowledge that this employment relationship may be terminated at any
time, upon written notice to the other party,
 
 
 
 
 
with or without Cause (as defined herein) or with or without Good Reason (as
defined herein), at the option either of the Company or Executive. However, as
described in this Agreement, Executive may be entitled to severance benefits
depending upon the circumstances of Executive's termination of employment as set
forth in Section 6. Upon the termination of Executive's employment with the
Company for any reason, subject to the terms of this Agreement, Executive will
be entitled to payment of any accrued but unpaid salary, accrued but unused
vacation, expense reimbursements, and other benefits due to Executive through
his termination date under any Company-provided or paid plans, policies, and
arrangements in accordance with and subject to the terms of such plans, policies
and arrangements. Executive agrees to resign from all positions that he holds
with the Company, including, without limitation, his position as a member of the
Holdings' Board, immediately following the termination of his employment if the
Holdings' Board so requests.
 
     Nothwithstanding the foregoing, in the event Executive voluntarily
terminates his employment without Good Reason, he must provide one (1) month
prior written notice of termination to the Company. If Executive terminates his
employment pursuant to the preceeding sentence, the Company shall have the right
at any time during the one (1)-month notice period to reduce his offices, duties
and responsibilites, or to relieve him of such offices, duties and
responsibilites and to place him on a paid leave-of-absence status, provided
that during such notice period he shall remain a full-time employee of the
Company and shall continue to receive his salary and all other compensation and
other benefits as provided in this Agreement.
 
     3. Compensation.
 
     (a) Base Salary. As of the Effective Date, Majesco will pay Executive an
annual salary of $375,000 as compensation for his services (the "Base Salary").
There will be a gross-up (which shall be a Tax-Effected Payment as provided in
Section 3(f)) of this Base Salary to provide for the Executive's costs as it
relates only to his New York City resident taxes. The Base Salary will be paid
periodically in accordance with Majesco's normal payroll practices (but no less
frequently than once per month) and be subject to the usual, required
withholding. Executive's salary will be subject to review and any increases will
be made based upon the Company's standard practices or the discretion of the
Compensation Committee of the Holdings' Board (the "Committee").
 
 
     (b) Interim Bonus. From the period commencing with the Effective Date
through October 31, 2004, Executive shall be eligible to receive a discretionary
bonus of up to $62,500 based on the evaluation by the Committee in its sole and
absolute discretion that the Executive achieved the Established Goals (as
hereinafter defined) (the "Interim Bonus") provided, however, Executive will be
given the opportunity to provide to the Committee his own evaluation of the
achievement of such Established Goals. The term "Established Goals" shall mean
the performance goals and objectives established for any bonus measuring period
by the Committee; provided, however, Executive will be given the opportunity to
discuss the nature of the Established Goals with the Committee prior to the
determination thereof by the Committee. For purposes of the Interim Bonus, the
Established Goals shall be reasonable short-term management objectives (not
including any revenue or financial goals). Any Interim Bonus is to be paid to
Executive by January 31, 2005 and is subject to Executive's being on active
working status with the Company at the time of payment. For purpose of this
Agreement, "active working status" means that Executive has not resigned (or
given written notice of his intentions to resign) or has not been terminated (or
been given written notice of his termination).
 
 
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     (c) Annual Bonus. Commencing with the annual period November 1, 2004
through October 31, 2005 (the "Annual Period" and where the Annual Period shall
represent Holdings' fiscal year) and for each Annual Period thereafter during
the Employment Term, Executive will be eligible to receive a discretionary bonus
(the "Annual Bonus). The target bonus for each Annual Period shall be 100% of
Executive's Base Salary (with such Base Salary determined as of the end of the
applicable performance period) unless such target bonus percentage is
subsequently increased by the Committee (the "Target Bonus"). Based on the
evaluation by the Committee in its sole and absolute discretion that the
Executive achieved some or all of the Established Goals for such Annual Period,
the Committee shall determine in its sole and absolute discretion the amount of
the Annual Bonus that will be paid to Executive and the Committee shall also
have the right in its sole and absolute discretion to increase the amount of
Executive's Annual Bonus for any Annual Period based upon its evaluation that
Executive exceeded the Established Goals provided, however, Executive will be
given the opportunity to provide to the Committee his own evaluation of the
achievement of such Established Goals. Any Annual Bonus shall be paid to
Executive within ninety (90) days after the end of the Annual Period and is
subject to Executive being on active working status with the Company at the time
of payment.
 
     (d) Equity Compensation. For purposes of this Section 3(d), the following
definitions shall apply: "Employed Percentage" means the fraction that is equal
to the number of calendar days that Executive was employed by the Company during
the twelve (12) month period beginning on the Effective Date, divided by 365.
"Option Number" means 2,780,000. "Exercised Percentage" means the aggregate
number of shares of the "Fully Vested Option" (as defined below) that Executive
has acquired by exercising the Fully Vested Option prior to his termination of
employment, divided by the Option Number.
 
     (I) On the Effective Date, Executive will be granted non-qualified stock
     options pursuant to the Company's 2004 Employee, Director and Consultant
     Stock Option Plan (the "Stock Plan") to purchase 6,950,000 shares of
     Holdings' common stock (the "Grant"). Of the Grant, options to purchase
     2,085,000 shares (i) will have a per-share exercise price equal to $1.00,
     and (ii) will vest and become exercisable as to 1/24th of such share grant
     amount each month commencing as of the Effective Date, subject to
     Executive's continuous "Service" with the Company. For purposes of this
     Agreement, "Service" shall mean providing service to the Company (or any
     Company affiliate) as either a director, employee and/or consultant. Of the
     Grant, options to purchase 2,085,000 shares (i) will have a per-share
     exercise price equal to $4.56 and (ii) will vest and become exercisable as
     to 1/24th of such share grant amount each month commencing immediately
     after the two-year anniversary of the Effective Date, subject to
     Executive's continuous Service with the Company. Of the Grant, options to
     purchase 2,780,000 shares (i) will have a per-share exercise price equal to
     $2.78, and (ii) will be immediately and fully vested and exercisable upon
     grant ("Fully Vested Option"). Before the first anniversary of the
     Effective Date (the "Anniversary") while Executive is serving as CEO,
     Executive agrees that his exercise(s) of the Fully Vested Option shall be
     such that the Exercised Percentage does not exceed the Employed Percentage.
 
     (II) In the event that Executive's employment with the Company is
     terminated for Cause by the Company within the twenty-four (24) month
     period beginning on the
 
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     Effective Date, the unexercised portion of the Fully Vested Option at the
     time of such termination shall be forfeited and cancelled.
 
     (III) In the event that Executive's employment with the Company terminates
     voluntarily by Executive without Good Reason before the Anniversary, then
     the following number of unexercised shares subject to the Fully Vested
     Option shall be forfeited and cancelled as of the termination of
     Executive's employment: (a) the Option Number multiplied by (b) the
     difference of 100% minus the Employed Percentage.
 
     (IV) Except as otherwise provided in this Agreement, the Grant will be
     subject to the Company's standard terms and conditions for executive stock
     option awards and will be issued pursuant to and consistent with the terms
     of the Stock Plan which includes a provision that options may be exercised
     in accordance with a cashless exercise program established with a
     securities brokerage firm. All options granted to Executive will have a
     ten-year maximum term and any vested options will remain exercisable after
     Executive's employment with the Company terminates as follows, subject to
     the ten-year term: (i) if Executive's employment with the Company
     terminates by the Executive with Good Reason or is terminated by the
     Company without Cause the options will remain exercisable for twenty-four
     (24) months, (ii) if Executive's employment with the Company terminates
     voluntarily by the Executive without Good Reason the options, other than
     the portion of the Fully Vested Option which is forfeited pursuant to
     Section 3(d)(III) above, will remain exercisable for 12 months, (iii) if
     Executive's employment with the Company is terminated for Cause by the
     Company the options, other than the Fully Vested Options which are
     forfeited pursuant to Section 3(d)(II) above, will be forfeited as soon as
     the Executive is notified that he has been terminated for Cause as set
     forth in the Stock Plan, and (iv) if Executive's employment with the
     Company terminates by reason of death or Disability (as defined in the
     Stock Plan) the options will remain exercisable for twelve (12) months.
 
     (V) The Grant and the underlying shares of common stock and any other
     compensatory equity awards subsequently provided to Executive shall be
     covered by an effective registration statement on Form S-8 (or other
     applicable registration statement) filed by the Company with the Securities
     and Exchange Commission ("SEC"). With respect to the Grant, the
     registration statement shall be filed and effective with the SEC no later
     than 45 days after the Effective Date. The Grant (and any other
     compensatory equity awards subsequently awarded to Executive) shall be
     granted by either the Holdings' Board or by a committee of the Holdings'
     Board composed solely of two or more non-employee directors pursuant to
     Rule 16b-3(d) of the Securities Exchange Act of 1934 ("1934 Act") so that
     the Grant (and any other compensatory equity awards subsequently awarded to
     Executive) is exempt from liability under Section 16(b) of the 1934 Act.
     The terms specified in this Agreement shall govern if there is any conflict
     in terms between this Agreement and the Stock Plan or any stock option or
     stock purchase agreements between Executive and the Company.
 
     (e) "Change in Control" Bonus. In the event a "Change in Control" (as
defined
 
 
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herein) occurs during the Employment Term, Executive shall be entitled to
receive on the Change in Control a one-time cash lump sum payment directly from
the Change in Control proceeds (or from the Company) in the amount of One
Million Dollars ($1,000,000) (the "Change in Control Bonus") and where such
Change in Control Bonus is a Tax-Effected Payment as defined in Section 3(g)
below. In the event that both (i) the closing trading price of a Company common
share on the last business date immediately before the date of such Change in
Control and (ii) the change in control consideration that would accrue to
Company shareholders on a per share basis as a result of such Change in Control
are each less than $2.78, then the Change in Control Bonus shall not be paid out
with respect to that particular Change in Control. For purposes of the preceding
sentence, the share values/prices shall take into account and reflect all stock
splits, stock dividends, recapitalizations, reorganizations or similar
transactions which caused the Company's share price to be adjusted after the
Effective Date.
 
     (f) Vacation. During the Employment Term, Executive shall be eligible for
three (3) weeks paid vacation per year in accordance with Company policy in
effect from time to time.
 
     (g) Tax Adjustment. Certain payments or benefits, but only if labelled as
such in this Agreement, shall if necessary be "tax-effected" (a "Tax-Effected
Payment"). This means that, in addition to the Tax-Effected Payment, Executive
shall receive from the Company another contemporaneous cash payment in order to
make Executive whole, on an after-tax basis, for any taxes (including without
limitation any excise taxes) imposed on the Tax-Effected Payment. The additional
cash payment shall be calculated applying the highest marginal tax rates then in
effect for the applicable tax year and shall provide Executive with an after-tax
amount that is equal to the amount of any taxes (including any penalties and/or
interest) reasonably related to the Tax-Effected Payment.
 
     4. Employee Benefits. During the Employment Term, Executive (and his
dependents as applicable) will be eligible to participate in accordance with the
terms of all Company employee benefit plans, policies, and arrangements that are
applicable to other senior executives of Company, as such plans, policies, and
arrangements may exist from time to time and subject to the terms and conditions
of such plans, policies and arrangements. In the event that Executive declines
coverage under the Company's group health insurance plan, the Company agrees to
reimburse Executive for any premiums incurred by Executive for coverage under
any other group health insurance that he is currently covered under from another
company. The reimbursement set forth in the preceding sentence is a Tax-Effected
Payment as provided under Section 3(g).
 
     5. Expenses.
 
     (a) Majesco will reimburse Executive for reasonable travel, entertainment,
and other expenses incurred by Executive in the furtherance of the performance
of Executive's duties hereunder, in accordance with the Company's expense
reimbursement policy as in effect from time to time.
 
     (b) Majesco will provide an allowance of $1,500 monthly (which shall be a
Tax-Effected Payment as provided in Section 3(g)) for all costs associated with
the Executive's use of his automobile. In addition, the Company will also
provide the Executive with a garage space in New York City (whose location is
designated by Executive) at the Company's expense.
 
 
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6. Severance.
 
     (a) Termination Without Cause or Resignation for Good Reason. If
Executive's employment is terminated by the Company without Cause or by
Executive for Good Reason, then, subject to Section 7, Executive (or Executive's
heirs or estate in the event of Executive's death after Executive has become
entitled to the following payments and benefits) will receive from the Company:
(i) continued payment of Executive's then Base Salary for a period of 12 months
(the "Continuance Period") payable in accordance with Majesco's regular payroll
practices (except that the aggregate amount of the 12 months of Base Salary
shall instead be entirely made in a single cash lump sum payment upon
Executive's termination of employment if such employment is terminated within a
period three months prior to a Change in Control and 12 months after a Change in
Control), (ii) a cash lump sum payment, paid at the time the Annual Bonus is
generally paid, (but in no event later than 90 days after the end of the
Company's fiscal year), equal to the then Target Bonus percentage multiplied by
Executive's then Base Salary; (iii) for any such termination occurring within 90
days after an Annual Period, but prior to the payment of any Annual Bonus for
such Annual Period, an Annual Bonus with respect to such preceding Annual Period
(payable within 90 days following the end of such Annual Period), provided that
Executive would have otherwise received an Annual Bonus if he had remained
employed as of the date of the payment of such Annual Bonus for such Annual
Period; or for any such termination occurring after October 31, 2004 and before
February 1, 2005, but prior to the payment of any Interim Bonus, an Interim
Bonus (payable no later than January 31, 2005), provided that Executive would
have otherwise received an Interim Bonus if he had remained employed as of the
date of the payment of such Interim Bonus; (iv) a cash lump sum payment of the
Change in Control Bonus, if such termination occurs within three months prior to
a Change in Control or if earned at the time of termination, but not otherwise
paid pursuant to Section 3(e); (v) reimbursement for any applicable premiums
Executive pays to continue coverage for Executive and Executive's eligible
dependents under the Company's Benefit Plans for the Continuance Period or as
otherwise provided under Section 4, or, if earlier, until Executive is eligible
for similar benefits from another employer (excluding Executive's continuation
of his Section 4 arrangements with another employer) (provided Executive validly
elects to continue coverage under applicable law), and (vi) immediate vesting
and exercisability of Executive's unvested stock options (or other unvested
compensatory equity awards) as follows: Executive's stock options (or other
unvested compensatory equity awards) shall vest as if Executive remained in the
employ of the Company for 18 months following such termination of employment;
provided, however, that if such termination occurs during the period commencing
three months prior to a Change in Control and ending on the date that is 12
months after a Change in Control, Executive's stock options (or other unvested
compensatory equity) shall all be immediately and fully vested and exercisable.
 
     (i) Section 280G Gross-up. If any payment or benefit Executive would
receive (whether or not Executive's Service is or has been terminated), but
determined without regard to any additional payment required under this Section
6(a)(i), (collectively, the "Payment") would (x) constitute a "parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and (y) be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties payable with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then Executive
will be entitled to receive from Majesco an additional payment (the "Gross-Up
Payment," and any iterative payments pursuant to this paragraph also shall be
"Gross-Up
 
 
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Payments") in an amount that shall fund the payment by Executive of any Excise
Tax on the Payment, as well as all income and employment taxes on the Gross-Up
Payment, any Excise Tax imposed on the Gross-Up Payment and any interest or
penalties imposed with respect to income and employment taxes imposed on the
Gross-Up Payment. For this purpose, all income taxes will be assumed to apply to
Executive at the highest marginal rate. Any Gross-Up Payment shall be paid to
Executive, or for his benefit, within 15 days following receipt by the Company
of the report of the accounting firm described below.
 
         The accounting firm engaged by the Company for general audit purposes
as of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
also serving as accountant or auditor for the individual, entity or group which
will control the Company upon the occurrence of a Change in Control, the Company
shall appoint a nationally recognized accounting firm other than the accounting
firm engaged by the Company for general audit purposes to make the
determinations required hereunder. The Company shall bear all expenses with
respect to the determinations by such accounting firm required to be made
hereunder.
 
         The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and Executive within thirty calendar days after the date on which
such accounting firm has been engaged to make such determinations or such other
time as requested by the Company or Executive. If the accounting firm determines
that no Excise Tax is payable with respect to a Payment, it shall furnish the
Company and Executive with an opinion reasonably acceptable to Executive that no
Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding,
and conclusive upon the Company and Executive.
 
         Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment of a
Gross-Up Payment. Such notice shall be given as soon as practicable after
Executive knows of such claim and shall apprise the Company of the nature of the
claim and the date on which the claim is requested to be paid. Executive agrees
not to pay the claim until the expiration of the thirty-day period following the
date on which Executive notifies the Company, or such shorter period ending on
the date the taxes with respect to such claim are due (the "Notice Period"). If
the Company notifies the Executive in writing prior to the expiration of the
Notice Period that it desires to contest the claim, Executive shall: (i) give
the Company any information reasonably requested by the Company relating to the
claim; (ii) take action in connection with the claim as the Company may
reasonably request, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company and reasonably acceptable to Executive; (iii) cooperate with the
Company in good faith in contesting the claim; and (iv) permit the Company to
participate in any proceedings relating to the claim. Executive shall permit the
Company to control all proceedings related to the claim and, at its option,
permit the Company to pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim. If requested by the Company, Executive agrees either to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner and
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts as the
Company shall determine; provided, however, that, if the Company directs
Executive to pay such claim and pursue a refund, the Company shall advance the
amount of such payment to Executive on an after-tax and
 
 
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interest-free basis (the "Advance"). The Company's control of the contest
related to the claim shall be limited to the issues related to the Gross-Up
Payment and Executive shall be entitled to settle or contest, as the case may
be, any other issues raised by the Internal Revenue Service or other taxing
authority. If the Company does not notify Executive in writing prior to the end
of the Notice Period of its desire to contest the claim, the Company shall pay
to Executive an additional Gross-Up Payment in respect of the excess parachute
payments that are the subject of the claim, and Executive agrees to pay the
amount of the Excise Tax that is the subject of the claim to the applicable
taxing authority in accordance with applicable law.
 
         If, after receipt by Executive of an Advance, Executive becomes
entitled to a refund with respect to the claim to which such Advance relates,
Executive shall pay the Company the amount of the refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
receipt by Executive of an Advance, a determination is made that Executive shall
not be entitled to any refund with respect to the claim and the Company does not
promptly notify Executive of its intent to contest the denial of refund, then
the amount of the Advance shall not be required to be repaid by Executive and
the amount thereof shall offset the amount of the additional Gross-Up Payment
then owing to Executive.
 
     (b) Voluntary Termination without Good Reason. If Executive's employment
with the Company terminates voluntarily by Executive without Good Reason, then,
subject to the terms of this Agreement (including Section 3 (d)) (i) all further
vesting of Executive's outstanding equity awards will terminate immediately,
(ii) all payments of compensation by the Company to Executive hereunder will
terminate immediately, (iii) Executive will be paid any accrued but unpaid
salary, accrued but unused vacation, expense reimbursements and other benefits
due to Executive through his termination date under any Company-provided or paid
plans, policies, and arrangements in accordance with and subject to the terms of
such plans, policies and arrangements, and (iv) Executive will not be eligible
for severance benefits under this Agreement or otherwise.
 
     (c) Termination for Cause. If Executive's employment with the Company is
terminated for Cause by the Company, then, subject to the terms of this
Agreement (including Section 3 (d)) (i) all of Executive's vested and unvested
outstanding options will be forfeited and cancelled as soon as Executive is
notified that he has been terminated for Cause, (ii) all payments of
compensation by the Company to Executive hereunder will terminate immediately,
(iii) Executive will be paid any accrued but unpaid salary, accrued but unused
vacation, expense reimbursements and other benefits due to Executive through his
termination date under any Company-provided or paid plans, policies, and
arrangements in accordance with and subject to the terms of such plans, policies
and arrangements, and (iv) Executive will not be eligible for severance benefits
under this Agreement or otherwise.
 
     (d) Termination due to Death or Disability. If Executive's employment
terminates by reason of death or Disability (as defined in the Stock Plan), then
(i) Executive will be paid any accrued but unpaid salary, accrued but unused
vacation, expense reimbursements and other benefits due to Executive through his
termination date under any Company-provided or paid plans, policies, and
arrangements and will be entitled to receive benefits only in accordance with
the Company's then applicable plans, policies, and arrangements, and (ii)
subject to Section 3(d), Executive's outstanding equity awards will be governed
in accordance with the terms and conditions of this Agreement and the applicable
award agreement(s).
 
 
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     (e) Sole Right to Severance. This Agreement is intended to represent
Executive's sole entitlement to severance payments and benefits in connection
with the termination of his employment. To the extent Executive receives
severance or similar payments and/or benefits under any other Company plan,
program, agreement, policy, practice, or the like, severance payments and
benefits due to Executive under this Agreement will be correspondingly reduced
(and vice-versa).
 
     7. Conditions to Receipt of Severance; No Duty to Mitigate.
 
     (a) Separation Agreement and Release of Claims. The receipt of any
severance pursuant to Section 6 will be subject to Executive signing and not
revoking a separation agreement and release of claims in a form acceptable to
the Company, which includes a general release in favor of the Company and its
affiliates together with their respective officers, directors, shareholders,
employees, agents and successors and assigns from any and all claims Executive
may have against them including but not limited to, arising from Executive's
employment and/or termination of employment. The aforementioned general release
shall not include a waiver of claims against the shareholders, employees or
agents of the Company that do not arise out of or relate to Executive's
employment with the Company. In the event Executive breaches the provisions of
Section 8 of this Agreement, in addition to any other remedies of law or in
equity, the Company may cease making any payments or benefits to which Executive
otherwise may be entitled to under Section 6. No severance will be paid or
provided until the separation agreement and release agreement becomes effective.
 
     (b) No Duty to Mitigate. Executive will not be required to mitigate the
amount of any payment contemplated by this Agreement, nor will any earnings that
Executive may receive from any other source reduce any such payment.
 
     8. Confidential and Proprietary Information; Non-Competition;
Non-Solicitation.
 
     (a) Confidentiality. Except in the performance of Executive's duties
hereunder, at no time during the Term or any time thereafter, shall Executive,
individually or jointly with others, for his benefit or the benefit of any third
party, publish, disclose, use or authorize anyone else to publish, disclose or
use, any secret or confidential and proprietary information relating to any
aspect of the business or operations of the Company, including, without
limitation, any trade secrets, customer lists and programs, manuals and forms,
customer files, financial data, employee-related information, marketing or
business plans, suppliers, trade or industrial practices of the Company, and any
Company information concerning purchasing, finances, accounting, engineering,
methods, processes, compositions, technology, formulas, electronic information
processing procedures (including computer software), research and development
programs, potential client lists, marketing, affiliations, sales and inventions.
Executive acknowledges and agrees that such information is a valuable asset of
the Company and is the Company's sole and exclusive property. Upon the
termination of his employment, regardless of the reason for or circumstances
giving rise to such termination or at any other time at the request of the
Company, he shall immediately return to the Company all of the property of the
Company, including all such confidential and proprietary information, in his
possession or control and agrees not to retain any copies, duplicates,
reproductions or excerpts in whatsoever form of any Company property.
 
     (b) Non-Competition/Non-Solicitation.
 
 
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     (i) In the course of Executive's employment with the Company, he will
acquire and have access to confidential or proprietary information concerning
the Company. Furthermore, his position as CEO of the Company places him in a
position of confidence and trust with the clients and employees of the Company.
Executive also acknowledges that the clients serviced by the Company are located
throughout the world and accordingly, it is reasonable that the restrictive
covenants set forth below are not limited by specific geographic area but by the
location of the Company's clients. He further acknowledges that the rendering of
services to the Company's clients necessarily requires the disclosure of
confidential information and trade secrets of the Company and its subsidiaries
(such as without limitation, marketing plans, budgets, designs, client
preferences and policies, and identity of appropriate personnel of clients with
sufficient authority to influence a shift in suppliers.) Executive and the
Company agree that in the course of employment hereunder, he will develop a
personal acquaintanceship and relationship with the Company's clients, and
knowledge of those clients' affairs and requirements which may constitute the
Company's primary or only contact with such clients. Executive acknowledges that
the Company's relationships with its established clientele may therefore be
placed in his hands in confidence and trust. Executive consequently agrees that
it is reasonable and necessary for the protection of the goodwill and business
of the Company that he makes the covenants contained herein; and accordingly,
Executive agrees that while he is in the Company's employ and for a one year
period (and in the case of Section 8(b)(i)(c) a two-year period) after the
termination of his employment for any reason whatsoever, he shall not directly
or indirectly except on behalf of the Company:
 
     a) perform services that compete with the business or businesses conducted
   by the Company or any of its affiliates (or which business the Company can at
   the time of his termination of employment establish it will likely conduct
   within one (1) year following the date of his termination; provided that
   Executive participated in the planning or development of any such new
   business); or
 
     b) attempt in any manner to solicit from any client (as hereinafter
   defined) business of the type performed by the Company or to persuade any
   client of the Company to cease to do business or to reduce the amount of
   business which any such client has customarily done or, to the best of
   Executive's knowledge, that is likely to do with the Company (as of the date
   of termination of employment), whether or not the relationship between the
   Company and such client was originally established in whole or in part
   through his efforts; or
 
     c) employ (including to retain, engage or conduct business with) or attempt
   to employ or assist anyone else to employ any person who is then or at any
   time during the preceding year was in the Company's employ, with the
   exception of Patrick Flaherty; or
 
     d) render any services of the type rendered by the Company to its clients
   to or for any client of the Company; provided, however, that this Section
   8(b)(i)(d) shall not prevent Executive from becoming employed by a client.
 
         As used in this Section 8(b), the term "Company" shall include
subsidiaries of the Company and the term "client" shall mean (1) anyone who is a
client of the Company at the time of the termination of his employment with the
Company or, if his employment shall not have terminated, at
 
 
                                       10
 
 
 
the time of the alleged prohibited conduct; (2) anyone who was a client at any
time during the two year period immediately preceding the termination of his
employment with the Company or, if his employment shall not have terminated,
during the two year period immediately preceding the date of the alleged
prohibited conduct; and (3) any prospective clients to whom the Company had made
a presentation (or similar offering of services) within the one year period
immediately preceding the termination of his employment with the Company or if
his employment shall not have terminated, within the one year period immediately
preceding the date of the alleged prohibited conduct.
 
         For purposes of Section 8(b)(i)(a), upon a Change in Control, the
"business or businesses conducted by the Company or any of its affiliates" shall
not include any business of the successor or surviving corporation that
Executive had no involvement in as of the date of his termination of employment.
 
     (c) Injunctive Relief. Executive acknowledges that a breach or threatened
breach of any of the terms set forth in this Section 8 shall result in an
irreparable and continuing harm to the Company for which there shall be no
adequate remedy of law. The Company shall, without posting a bond, be entitled
to obtain injunctive and other equitable relief, in addition to any other
remedies available to the Company.
 
     (d) Survival of Terms; Representations. Executive's and Company's
obligations under this Section 8 hereof shall remain in full force and effect
notwithstanding the termination of Executive's employment. Executive
acknowledges that he is sophisticated in business, and that the restrictions and
remedies set forth in this Section 8 do not create an undue hardship on him and
will not prevent him from earning a livelihood. Executive and the Company agree
that the restrictions and remedies contained in this Section 8 are reasonable
and necessary to protect the Company's legitimate business interests regardless
of the reason for or circumstances giving rise to such termination and that
Executive and the Company intend that such restrictions and remedies shall be
enforceable to the fullest extent permissible by law. If it shall be found by a
court of competent jurisdiction that any such restriction or remedy is
unenforceable but would be enforceable if some part thereof were deleted or
modified, then such restriction or remedy shall apply with such modification as
shall be necessary to make it enforceable to the fullest extent permissible
under law.
 
     9. Intellectual Property. Executive expressly understands and agrees that
any and all improvements, inventions, discoveries, processes, know-how or other
intellectual property (including without limitation patents, licenses,
copyrights, tradenames, trademarks, assumed names and service marks and
applications therefor, marketing and advertising campaigns, logos and slogans,
designs and software programs) developed, conceived or created by him in the
course of his employment hereunder, either individually or in collaboration with
others, and whether or not during normal working hours or on the premises of the
Company (collectively, "Developments") shall be, as between Executive and the
Company, the sole and absolute property of the Company, and he will, whenever
requested to do so (either during the Employment Term or thereafter), execute
and assign any and all applications, assignments and/or other instruments and do
all things which the Company may deem necessary or appropriate in order to apply
for, obtain, maintain, enforce and defend patents, copyrights, trade names or
trademarks of the United States or of foreign countries for said Developments,
or in order to assign and convey or otherwise make available to the Company the
sole and exclusive right, title, and interest in and to said Developments
(provided that where Executive is providing assistance to the Company pursuant
to this Section 9 after Executive's employment has terminated, the Company
 
 
                                       11
 
 
 
shall promptly reimburse Executive for any pre-approved reasonable out of pocket
expenses and reimburse him for pre-approved time over 5 hours per month at a
rate of $600 per hour).
 
     Executive agrees to make full and prompt disclosure to the Company of all
Developments conceived or created by him during his employment with the Company.
 
10.      Definitions.
         -----------
 
     (a) Benefit Plans. For purposes of this Agreement, "Benefit Plans" means
plans, policies, or arrangements that Company sponsors (or participates in) and
that immediately prior to Executive's termination of employment provide
Executive and Executive's eligible dependents with medical, dental, or vision
benefits. Benefit Plans do not include any other type of benefit (including, but
not by way of limitation, financial counseling, disability, life insurance, or
retirement benefits).
 
     (b) Cause. For purposes of this Agreement, "Cause" means (i) Executive's
act of dishonesty or fraud in connection with the performance of his
responsibilities to the Company with the intention that such act result in
Executive's substantial personal enrichment, (ii) Executive's conviction of, or
pleas of nolo contendere to, a felony, (iii) Executive's willful failure to
follow lawful, reasonable instructions of the Holdings' Board, (iv) Executive's
willful misconduct provided such misconduct is injurious to the Company, or (v)
Executive's violation or breach of any fiduciary or contractual duty to the
Company which results in material damage to the Company or its business;
provided that if any of the foregoing events is capable of being cured, the
Company will provide notice to Executive describing the specific nature of such
event and Executive will thereafter have 20 days to cure such event (including
the opportunity to present his case to the full Holdings' Board with the
assistance of his own counsel). During any cure period, Executive will continue
to receive all of the compensation and benefits provided under this Agreement.
For purposes of this Section 8(b), no lawful act or failure to act will be
considered "willful" unless the act or failure to act was committed/omitted by
Executive without a reasonable, good faith belief that it was in the best
interests of the Company and/or was inconsistent with prior direction of the
Holdings' Board or Company policy.
 
     (c) Change in Control. Means the occurrence of any of the following events:
 
          (i)  Ownership. Any "Person" (as such term is used in Sections 13(d)
               and 14(d) of the Securities Exchange Act of 1934, as amended)
               becomes the "Beneficial Owner" (as defined in Rule 13d-3 under
               said Act), directly or indirectly, of securities of the Company
               representing 50% or more of the total voting power represented by
               the Company's then outstanding voting securities (excluding for
               this purpose the Company or its Affiliates or any employee
               benefit plan of the Company) pursuant to a transaction or a
               series of related transactions which the Holdings' Board does not
               approve; or
 
          (ii) Merger/Sale of Assets. A merger or consolidation of the Company
               whether or not approved by the Holdings' Board, other than a
               merger or consolidation which would result in the voting
               securities of the Company outstanding immediately prior thereto
               continuing to represent (either by remaining outstanding or by
               being converted into voting securities of the surviving
 
 
                                       12
 
 
 
               entity or the parent of such corporation) at least 50% of the
               total voting power represented by the voting securities of the
               Company or such surviving entity or parent of such corporation
               outstanding immediately after such merger or consolidation, or
               the stockholders of the Company approve an agreement for the sale
               or disposition by the Company of all or substantially all of the
               Company's assets; or
 
          (iii) Change in Board Composition. A change in the composition of the
               Board of Directors, as a result of which fewer than a majority of
               the directors are Incumbent Directors. "Incumbent Directors"
               shall mean directors who either (A) are directors of the Company
               as of the Effective Date, or (B) are elected, or nominated for
               election, to the Board of Directors with the affirmative votes of
               at least a majority of the Incumbent Directors at the time of
               such election or nomination (but shall not include an individual
               whose election or nomination is in connection with an actual or
               threatened proxy contest relating to the election of directors to
               the Company).
 
          For purposes of this Section 10(c) and to determine whether a Change
          in Control has occurred, the term "Company" above shall be replaced by
          the term "Majesco" and also by the term "Holdings" so that a Change in
          Control of Majesco or a Change in Control of Holdings shall in either
          case represent a Change in Control under this Agreement.
 
     (d) Good Reason. For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following without Executive's express prior written
consent: (i) a material reduction in Executive's position or duties (other than
a reduction caused by Executive ceasing to be a member of the Holdings' Board
due to applicable legal or listing requirements or stockholders failing to
reelect Executive to the Board) and where it will be deemed to be a material
reduction in such position or duties if Executive is not at all times the CEO of
Majesco and Holdings (or their successors) or if Holdings (or its successors)
has any parent entities then Executive must be the Chief Executive Officer of
the highest such parent entity, (ii) a reduction of Executive's Base Salary or
Target Bonus percentage other than a reduction that also is applied to
substantially all of the Company's other senior executives, (iii) a material
reduction in the aggregate level of benefits made available to Executive other
than a reduction that also is applied to substantially all of the Company's
other senior executives, (iv) relocation of Executive's primary place of
business for the performance of his duties to the Company to a location that is
more than 30 miles from its location as of the Effective Date, unless it is
closer to Executive's New York residence as of the Effective Date or (v) any
material breach or material violation of a material provision of this Agreement
by the Company (or any successor to the Company); provided that the Executive
must provide written notice to the Company of not more than thirty (30) days
after the occurrence of the event(s) constituting Good Reason and providing
further that if any of the foregoing events is capable of being cured, the
Executive will provide notice to Company describing the specific nature of such
event and Company will thereafter have 20 days to cure such event.
 
     11. Indemnification and Insurance. Executive will be covered under the
Company's insurance policies and, subject to applicable law, will be provided
indemnification to the maximum extent permitted by the Company's bylaws and
Certificates of Incorporation, with such insurance
 
 
                                       13
 
 
 
coverage and indemnification to be in accordance with the Company's standard
practices for senior executive officers but on terms no less favorable than
provided to any other Company senior executive officer or director.
 
     12. Confidential Information. Executive agrees to execute the Company's
standard form of employee confidential information agreement (the "Confidential
Information Agreement") upon commencement of employment. During the Employment
Term, Executive further agrees to execute any updated versions of the
Confidential Information Agreement (any such updated version also referred to as
the "Confidential Information Agreement") as may be required of substantially
all of the Company's executive officers.
 
     13. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors, and legal representatives of Executive upon
Executive's death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. Any successor will expressly assume in writing all
of the Company's obligations under this Agreement. For this purpose, "successor"
means any person, firm, corporation, or other business entity which at any time,
whether by purchase, merger, or otherwise, directly or indirectly acquires all
or substantially all of the assets or business of the Company. None of the
rights of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance, or other
disposition of Executive's right to compensation or other benefits will be null
and void.
 
     14. Notices. All notices, requests, demands, and other communications
called for hereunder will be in writing and will be deemed given (a) on the date
of delivery if delivered personally, (b) one day after being sent by a well
established commercial overnight service, or (c) four days after being mailed by
registered or certified mail, return receipt requested, prepaid and addressed to
the parties or their successors at the following addresses, or at such other
addresses as the parties may later designate in writing:
 
               If to the Company:
 
               Attn: Chairman of the Compensation Committee
                     Majesco Holdings Inc.
 
               If to Executive:
 
               at the last residential address known by the Company as provided
               by Executive in writing.
 
     15. Severability; Obligations. If any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable, or
void, this Agreement will continue in full force and effect without said
provision. Each of Majesco and Holdings shall be jointly and severally liable
for any Company, Majesco or Holdings obligations and commitments under this
Agreement.
 
 
                                       14
 
 
 
16. Arbitration.
 
     (a) If any dispute arises between the Company and Executive that the
parties cannot resolve themselves, including any dispute over the application,
validity, construction, or interpretation of this Agreement, arbitration in
accordance with the then-applicable National Rules for the Resolution of
Employment disputes of the American Arbitration Association shall provide the
exclusive remedy for resolving any such dispute, regardless of its nature;
provided, however, the Company may enforce Executive's obligations under
Sections 8 and 12 hereof by an action for injunctive relief and damages in a
court of competent jurisdiction.
 
     (b) This Section 16 shall apply to claims arising under state and federal
statutes, local ordinances, and the common law. The arbitrator shall apply the
same substantive law that a court with jurisdiction over the parties and their
dispute would apply under the terms of this Agreement. The arbitrator's remedial
authority shall equal the remedial power that a court with jurisdiction over the
parties and their dispute would have. If the then-applicable rules of the
American Arbitration Association conflict with the procedures of this Section
16, the latter shall apply.
 
     (c) If the parties cannot agree upon an arbitrator, the parties shall
select a single arbitrator from a list of seven arbitrators provided by the
American Arbitration Association ("AAA"). The names of the seven listed
arbitrators shall be derived from the AAA employment law roster. If the parties
cannot agree on selecting an arbitrator from that list, then the parties shall
alternately strike names from the list, with the first party to strike being
determined by lot. After each party has used three strikes, the remaining name
on the list shall be the arbitrator.
 
     (d) Each party may be represented by counsel or by another representative
of the party's choice and each party shall pay the costs and fees of its counsel
or other representative and its own filing and administrative fees provided,
however, that Executive will only be responsible to pay those costs and fees
which he would have had to pay for had the disputed matter been initiated in
court.
 
     (e) The arbitrator shall render an award and opinion in the form typical of
those rendered in labor arbitrations, and that award shall be final and binding
and non-appealable except as specifically provided by law. To the extent that
any part of this Section 16 is found to be legally unenforceable for any reason,
that part shall be modified or deleted in such a manner as to render this
Section 16 (or the remainder of this Section 16) legally enforceable and as to
ensure that except as provided in clause (b) of this Section 16, all conflicts
between the Company and Executive shall be resolved by neutral, binding
arbitration. The remainder of this Section 16 shall not be affected by any such
modification or deletion but shall be construed as severable and independent. If
a court finds that the arbitration procedures of this Section 16 are not
absolutely binding, then the parties intend any arbitration decision to be fully
admissible in evidence, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law.
 
     (f) Unless the parties agree otherwise, any arbitration shall take place in
the American Arbitration Association's offices in Somerset, New Jersey.
 
 
                                       15
 
 
 
     (g) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 16, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF, OR EXECUTIVE'S EMPLOYMENT OR THE TERMINATION
THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION PROVISION CONSTITUTES
A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP,
INCLUDING BUT NOT LIMITED TO THE FOLLOWING:
 
          (I) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT, BREACH OF
     CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH
     AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
     INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
     MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR
     PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
 
          (II) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR
     MUNICIPAL STATUTE, INCLUDING, WITHOUT LIMITATION, TITLE VII OF THE CIVIL
     RIGHTS ACT OF 1964, AS AMENDED, THE CIVIL RIGHTS ACT OF 1991, THE EQUAL PAY
     ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT, AS AMENDED, THE AGE
     DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES
     ACT OF 1990, THE FAMILY AND MEDICAL LEAVE ACT OF 1993, THE FAIR LABOR
     STANDARDS ACT, THE NEW JERSEY FAMILY LEAVE ACT, THE NEW JERSEY
     CONSCIENTIOUS EMPLOYEE PROTECTION ACT AND THE NEW JERSEY LAW AGAINST
     DISCRIMINATION; AND
 
          (III) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER FEDERAL, STATE OR
     LOCAL LAWS OR REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT
     DISCRIMINATION.
 
     (h) EXECUTIVE (I) UNDERSTANDS THAT OTHER OPTIONS SUCH AS FEDERAL AND STATE
ADMINISTRATIVE REMEDIES AND JUDICIAL REMEDIES EXIST AND (II) KNOWS THAT BY
SIGNING THIS AGREEMENT THOSE REMEDIES ARE FOREVER PRECLUDED AND THAT REGARDLESS
OF THE NATURE OF EXECUTIVE'S COMPLAINT, HE KNOWS THAT IT CAN ONLY BE RESOLVED BY
ARBITRATION.
 
     (i) To the extent Executive asserts a claim that would otherwise require
filing the claim with a governmental agency, Executive may, but need not, file
such claim with the applicable agency (including, without limitation, the Equal
Employment Opportunity Commission), and if Executive fails to do so, the Company
shall not assert a defense of failure to exhaust administrative remedies.
 
     17. No Conflict. Executive represents and warrants that he is not subject
to any agreement, instrument, order, judgment or decree of any kind, or any
other restrictive agreement of any character, which would prevent him from
entering into this Agreement or which would be breached by him upon the
performance of his duties pursuant to this Agreement.
 
     18. Legal and Tax Expenses. The Company will directly pay Executive's
counsel up to $20,000 for reasonable legal and tax advice expenses incurred in
connection with the negotiation and execution of this Agreement. Such payment
shall be made in full within 45 days after the Company's receipt of any
applicable invoices.
 
 
                                       16
 
 
 
     19. Integration. Except as otherwise provided herein, this Agreement
represents the entire agreement and understanding between the parties as to the
subject matter herein and supersedes all prior or contemporaneous agreements
whether written or oral. No waiver, alteration, or modification of any of the
provisions of this Agreement will be binding unless in a writing that
specifically references this Section and is signed by duly authorized
representatives of all of the parties hereto.
 
     20. Waiver of Breach. The waiver of a breach of any term or provision of
this Agreement, which must be in writing signed by all of the parties, will not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Agreement.
 
     21. Survival. The Confidential Information Agreement, the Company's and
Executive's responsibilities under Sections 3, 6, 7, 8, 9, 11, 12, 16 and
Section 18 will survive the termination of this Agreement.
 
     22. Headings. All captions and section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
 
     23. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
 
     24. Governing Law. This Agreement will be governed by the laws of the State
of New Jersey (with the exception of its conflict of laws provisions).
 
     25. Jurisdiction. The State of New Jersey shall have exclusive jurisdiction
to entertain any legal or equitable action with respect to Sections 8 or 12 of
this Agreement except that the Company may institute any such suit against
Executive in any jurisdiction in which he may be at the time. In the event suit
is instituted in New Jersey, it is agreed that service of summons or other
appropriate legal process may be effected upon any party by delivery it has to
the last known address.
 
     26. Acknowledgment. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.
 
     27. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned.
 
         28. No Strict Construction: The language used in this Agreement will be
deemed to be the language chosen by the Company and Executive to express the
parties' mutual intent, and no rule of law or contract interpretation that
provides that in the case of ambiguity or uncertainty a provision should be
construed against the draftsperson will be applied against any party.
 
 
 
         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by a duly authorized officer, as of the day and year
written below.
 
                                       17
 
 
 
COMPANY:
 
Majesco Sales Inc.
 
 
By:                                                        Date: August 24, 2004
    --------------------------------------
 
Title:
       -----------------------------------
 
 
 
Majesco Holdings Inc.
 
By:                                                        Date: August 24, 2004
   --------------------------------------
 
Title:
       ----------------------------------
 
EXECUTIVE:
 
 
                                                           Date: August 24, 2004
-----------------------------------------
Carl Yankowski
 
 
 
                                       18
 
 

SEVERANCE AGREEMENT

This Agreement is between Carl Yankowski ("Employee") and Majesco Entertainment Company (formerly named Majesco Holdings, Inc.), a Delaware corporation, (the "Company"), hereinafter collectively known as "parties."

WHEREAS, Employee was employed by Company as Chairman and Chief Executive Officer and served as a Director of the Company, pursuant to the Employment Agreement dated as of August 24, 2004 (the "Employment Agreement");

WHEREAS, Employee has resigned, by mutual agreement of the parties, as an officer, employee and director of the Company and all its subsidiaries and affiliates, effective July 8, 2005;

WHEREAS, the parties desire to settle fully and finally, in the manner set forth herein, all matters, contractual or otherwise, between them which have arisen, or which may arise, prior to, or at the time of, the execution of this Agreement, including, but in no way limited to, any and all claims and other matters arising out of the relationship between Employee and the Company pursuant to the Employment Agreement, and the termination of such relationship and agreement;

In consideration of these recitals and the promises and agreements set forth in this Agreement, the parties agree as follows:

1.    General Release:    Employee, individually and on behalf of his heirs, assigns, successors, executors, and administrators (collectively, "Employee Releasees") IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES the Company and its current and former affiliated, including or related corporations, firms, associations, partnerships, and entities, their successors and assigns, shareholders who are directors, officers or employees of the Company, directors, officers, employees, agents, attorneys, representatives, and insurers of said corporations, firms, associations, partnerships, and entities, and their guardians, successors, assigns, heirs, executors, and administrators (hereinafter "Company Releasees") from any and all claims, liabilities, obligations, agreements, damages, causes of action, costs, losses, damages, and attorneys' fees and expenses whatsoever, whether known or unknown or whether or not arising out of or connected with Employee's employment by Company or the Employment Agreement, or any stock options or other agreements with regard to equity in the Company, whether vested or unvested, and including, but not limited to, the right to benefits under the Employment Agreement, any dispute, claim, charge, or cause of action arising under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq., Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq., Employment and Housing Act, Cal. Gov't Code § 12940, the Americans with Disabilities Act of 1990, 42 U.S.C. 12101, et seq., the Employee Retirement Income Security Act of 1974, as amended 29 U.S.C. § 1001, et seq., and any other municipal, local, state, or federal law, common or statutory, which may have arisen, or which may arise, prior to, or at the time of, the Employee's execution of this Agreement. Notwithstanding the preceding sentence, this release does not apply to the Employee's rights under this Agreement or to COBRA continuation benefits for the remainder of his COBRA continuation period to the extent he pays or has paid the applicable premium therefor. Employee further promises never to contact or seek any damages, remedies, or other relief (any right to which he hereby waives) by filing or prosecuting a charge or pursuing any other action with any governmental entity or administrative agency with respect to any claim purportedly released by this Agreement or any other matter arising out of the relationship between the parties.

The Company Releasees IRREVOCABLY AND UNCONDITIONALLY RELEASE, ACQUIT AND FOREVER DISCHARGE the Employee Releasees from any and all claims, liabilities, obligations, agreements, damages, causes of action, costs, losses, damages and attorneys' fees and expenses whatsoever, whether known or unknown or whether or not arising out of or connected with Employee's employment by Company or the Employment Agreement, including, but not limited to, any municipal, local, state, or federal law, common or statutory, which may have arisen, or which may arise, prior to, or at the time of, the Company's execution of this Agreement. Notwithstanding the preceding sentence, this release does not apply to the Company's rights under this Agreement. The Company Releasees further promise never to contact or seek any damages, remedies, or other relief

1

 




(any right to which they hereby waive) by filing or prosecuting a charge or pursuing any other action with any governmental entity or administrative agency with respect to any claim purportedly released by this Agreement or any other matter arising out of the relationship between the parties.

Employee and the Company understand and agree that this is a full and final settlement applying not only to all claims that are presently known, anticipated or disclosed to Employee or the Company, but also to all claims presently unknown, unanticipated, and undisclosed to Employee or the Company. Employee and the Company hereby waive any and all rights or benefits which either party may now have, or may in the future have, against the other party, under any state or federal statute or common law principle of similar effect.

2.    Covenant Not to Sue:    Employee and the Company (and all of its subsidiaries, affiliates, directors and officers) COVENANT NOT TO SUE, OR OTHERWISE PARTICIPATE IN ANY ACTION OR CLASS ACTION against, any of the Company Releasees or the Employee Releasees, based on any of the claims released in paragraph 1 of this Agreement.

3.    Waiver of Reemployment:    Employee waives and releases forever any right or rights he might have to seek or obtain employment, reemployment, or reinstatement with the Company.

4.    Non-disparagement:    Employee expressly acknowledges, agrees, and covenants that he will not make any public or private statements, comments, or communication in any form, oral, written, or electronic, which in any way could constitute libel, slander, or disparagement of the Company, its employees, officers, and/or directors, or which may be considered to be derogatory or detrimental to the good name or business reputation of the Company; provided, however, that the terms of this paragraph shall not apply to communications between Employee and his spouse, clergy, or attorneys, which are subject to a claim of privilege existing under common law, statute, or rule of procedure, nor shall it apply to truthful statements made by him in response to a subpoena or during the course of any investigation by any law enforcement authority. Company (and the Company's subsidiaries and affiliates) expressly acknowledges, agrees, and covenants that it will not make (and the Company will instruct its current and future officers and/or current and future directors to not make) any public or private statements, comments, or communication in any form, oral, written, or electronic, which in any way could constitute libel, slander, or disparagement of Employee, or which may be considered to be derogatory or detrimental to the good name or business reputation of Employee; provided, however, that the terms of this paragraph shall not apply to truthful statements made by the Company or any of its officers or directors in response to a subpoena or during the course of any investigation by any law enforcement authority or as required by any applicable federal or state securities laws or as required by any applicable regulatory body or agency.

5.    Settlement Terms:    Upon the execution of this Agreement by Employee, the Company shall deposit $223,312 ($375,000, minus applicable tax or other withholding), ("Payment1") in an escrow account managed by a mutually agreed-upon third party. Upon the expiration of seven days after Employee's execution of this Agreement, and conditioned that this Agreement has not been revoked by Employee prior thereto (any such revocation must be by written notice actually delivered to the Company prior to such time and such revocation would invalidate this entire Agreement and all of its provisions (the "Cancellation of Agreement")), Payment1 shall be fully released from the escrow account to Employee on the eighth day after Employee's execution of this Agreement. As of the day after his execution of the Agreement, the escrow trustee shall notify Employee that Payment1 is in such escrow account. In addition, the Company will pay the Employee on the date of Employee's execution of this Agreement an amount equal to the sum of: Employee's accrued base salary, accrued and unused vacation, accrued and unpaid expense reimbursement, and any other unpaid payments (other then any bonus) or benefits due to Employee under the Employment Agreement, in all cases as accrued through July 8, 2005, minus applicable tax or withholding, ("Payment2"), which aggregate amount is $30,251 before applicable withholding and $18,175.09 after such withholding. If Payment1 and Payment2 are not tendered to Employee within three business days after the due dates specified herein then it will be a material breach of this Agreement by Company and Employee may elect to treat such breach as a Cancellation of Agreement or he may elect to pursue other legal remedies. The Company will also continue its current practice of paying the monthly premiums for Employee's (and

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his dependents) Blue Cross medical insurance for the 12 months ending June 30, 2006. Employee will be permitted to retain his Company personal computer equipment which is of de minimis value, provided however that the Employee shall deliver to the Company such computer's hard disk (drive) within five days of the date of execution of this Agreement and the Company shall deliver to Employee an identical replacement hard disk (drive) within five days of its receipt. The Company shall also deliver, at Company expense, all of Employee's personal effects to Employee's residence in Massachusetts within seven days of the Employee's execution of this Agreement. None of the payments or benefits due Employee under this Agreement will be subject to mitigation or offset. Neither the Employee nor the Company believe that any payments under this Agreement are subject to the excise taxes imposed by Internal Revenue Code Section 409A and the parties will take tax positions consistent with this view.

6.    Acknowledgement:    Employee hereby acknowledges and agrees that he has resigned as an officer and director of the Company and all of its affiliates and subsidiaries effective as of July 8, 2005 and that all stock options and other rights, if any, to purchase equity in the Company have been terminated. The Company hereby agrees (i) to continue to include Employee as a named insured under the Company's existing Directors & Officers insurance policy ("D&O Policy") through the end of the current policy period (which ends in December 2005); (ii) to continue to comply with its existing obligations to indemnify Employee for his entire period of service as an officer and/or director of the Company; (iii) to specify in any applicable Company Form 8-K filing with the Securities and Exchange Commission, any other applicable public filing, press release and/or other public disclosure or communication by the Company that Employee's resignation of employment was by mutual agreement of the parties; and (iv) that the Company will adhere to its internal policy of limiting any Company response to inquiries from (and Company communications to) third parties about the circumstances of Employee's employment and resignation to statements that Employee served as Chairman and Chief Executive Officer from August 24, 2004 through July 8, 2005 until his resignation by mutual agreement and that it is Company policy to only provide this information. The Company further represents and warrants that no change in control of the Company has occurred or is currently being discussed or contemplated by the Board of Directors of the Company, or has been initiated by any member of the Board of Directors,

7.    Severability:    If any provision of this Agreement is held to be illegal, invalid, or unenforceable, such provision shall be fully severable and/or construed in remaining part to the full extent allowed by law, with the remaining provisions of this Agreement continuing in full force and effect.

8.    Entire Agreement:    This Agreement constitutes the entire agreement between the parties, and supersedes all prior and contemporaneous negotiations and agreements, oral or written. This Agreement cannot be changed or terminated except pursuant to a written agreement executed by the parties.

9.    Governing Law:    This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, except where preempted by federal law.

10.    Statement of Understanding:    By executing this Agreement, Employee acknowledges that (a) he has had at least 21 days to consider the terms of this Agreement and has considered its terms for that period of time or has knowingly and voluntarily waived his right to do so; (b) he has been advised by Company to consult with an attorney regarding the terms of this Agreement; (c) he has consulted with, or has had sufficient opportunity to consult with, an attorney of his own choosing regarding the terms of this Agreement; (d) he has read this Agreement and fully understand its terms and their import; (e) except as provided by this Agreement, he now has no other contractual right or claim to the benefits described herein; and (f) the consideration provided for herein is good and valuable. The parties also understand that each is entering into this Agreement voluntarily, of their own free will, and without any coercion, undue influence, threat, or intimidation of any kind or type whatsoever.

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EXECUTED as of this 11th day of July 2005.

/s/ Carl Yankowski                                    
Carl Yankowski

MAJESCO ENTERTAINMENT COMPANY

 

 

By: 

/s/ Jesse Sutton                                        

Jesse Sutton

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