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PLAINTIFFS
DEFENDANTS
Gregory Gresh
'"'^ *~J-
668-5927
_ ,.._
CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE ABRIEF STATEMENT^ OFCAlSS^t^
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)
Has this action, case, or proceeding, orone essentially the same been previously filed in SDNY atany time? NdSreslbudge Previously Assigned
Ifyes,wasthiscase Vol.
Invol.
IS THIS AN INTERNATIONALARBITRATIONCASE?
No
&Case No.
Yes
NATURE OF SUIT
TORTS
PERSONAL INJURY
PERSONAL INJURY
FORFEITURE/PENALTY
BANKRUPTCY
[ J 367 HEALTHCARE/
[1110
[]120
[ ]130
[ ]140
[]150
[]151
[]152
INSURANCE
MARINE
[ ] 310 AIRPLANE
[ ] 315 AIRPLANE PRODUCT
MILLER ACT
LIABILITY
NEGOTIABLE
INSTRUMENT
RECOVERY OF
[ J 330 FEDERAL
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT
RECOVERY OF
DEFAULTED
STUDENT LOANS
SLANDER
EMPLOYERS'
RECOVERY OF
INJURY/PRODUCT LIABILITY
[ ] 340 MARINE
[ ] 345 MARINE PRODUCT
LIABILITY
INJURY
BENEFITS
SOCIAL SECURITY
PRODUCT LIABILITY
STOCKHOLDERS
PRISONER PETITIONS
[]195
CONTRACT
CONTRACT
STANDARDS ACT
[ ] 720 LABOR/MGMT
[
[
[
[
I
I 410 ANTITRUST
] 430 BANKS & BANKING
] 450 COMMERCE
] 460 DEPORTATION
(RICO)
[ ] 480 CONSUMER CREDIT
[ ] 490 CABLE/SATELLITE TV
VACATE SENTENCE
CIVIL RIGHTS
[ ] 440
LAND
CONDEMNATION
FORECLOSURE
RENT LEASE &
EJECTMENT
TORTS TO LAND
TORT PRODUCT
LIABILITY
ALL OTHER
[ J 441 VOTING
[ ] 442 EMPLOYMENT
[ ] 443 HOUSING/
ACCOMMODATIONS
EMPLOYMENT
]861
) 862
] 863
] 864
] 865
HIA(1395ff)
BLACK LUNG (923)
DIWC/DIWW (405(g))
SSID TITLE XVI
RSI (405(g))
[ ] 850 SECURITIES/
EXCHANGE
[ ] 462 NATURALIZATION
[ ] 550 CIVIL RIGHTS
[ ] 555 PRISON CONDITION
[ J 560 CIVIL DETAINEE
[
[
[
[
[
RELATIONS
28 USC 2255
REAL PROPERTY
[ )290
LABOR
PROPERTY DAMAGE
SUITS
[]240
[]245
400 STATE
REAPPORTIONMENT
COMMODITIES/
OTHER
[ ]220
[ ]230
PROPERTY RIGHTS
( 1820 COPYRIGHTS
[ ] 830 PATENT
[ ] 840 TRADEMARK
PERSONAL PROPERTY
M190
[ )210
28 USC 157
INJURY PRODUCT
LIABILITY
[ ]160
[]196
[ ] 423 WITHDRAWAL
[ ] 690 OTHER
PRODUCT LIABILITY
OF VETERAN'S
LIABILITY
FRANCHISE
21 USC 881
OVERPAYMENT
PRODUCT
SEIZURE OF PROPERTY
OTHER STATUTES
[ ] 422 APPEAL
LIABILITY
(EXCL VETERANS)
[ ]153
APPLICATION
[ ) 893 ENVIRONMENTAL
MATTERS
1 ] 895 FREEDOM OF
INFORMATION ACT
26 USC 7609
[ ] 896 ARBITRATION
[ ] 899 ADMINISTRATIVE
PROCEDURE ACT/REVIEW OR
[ ] 950 CONSTITUTIONALITY OF
STATE STATUTES
ACTIONS
CONDITIONS OF CONFINEMENT
[ ] 448 EDUCATION
REAL PROPERTY
RO YOU CLAJM THIS CASE IS RELATED TO A CIVIL CASE NOW PENDING IN S.D.N.Y.?
UNDER F.R.C.P. 23
DEMAND $_
OTHER
JUDGE
DOCKET NUMBER
NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).
(PLACE AN x INONEBOXONLY)
IE) 1 Original
ORIGIN
2 Removed from
Proceeding
state Court
Remanded
I | 4 Reinstated or
I I 7 Appeal to District
Judge from
Magistrate Judge
Litigation
(Specify District)
Reopened
from
Appellate
Judgment
Court
| | b. Atleast one
party is pro se.
(PLACEAN x INONEBOXONLY)
IF DIVERSITY, INDICATE
BASIS OF JURISDICTION
|x]4 DIVERSITY
CITIZENSHIP BELOW.
PTF
DEF
[ ]1
[ ]1
[x] 2
PTF DEF
[ ]2
CITIZEN OR SUBJECT OF A
FOREIGN COUNTRY
[]3[]3
[ ]4 [ ]4
PTF
DEF
[]5
[xJ5
[]6
[]6
GREGORY GRESH, 411 OCEAN ROAD, SPRING LAKE, NEW JERSEY 07763, MONMOUTH
COUNTY
,,.,.,
REPRESENTATION IS HEREBY MADE THAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN
Check one:
WHITE PLAINS
[x] MANHATTAN
DATE 12/29/14
RECEIPT*
/ V ^ / ^-<?7'^>2Si^_4-
Magistrate Judge
tu&t I *, ^i^-sti-oisignated.
Clear Form
Save
Yr. 2003
1.
MPayMe Partners, 51/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong
2.
MPayMe Limited, 51/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong
3.
4.
MPayMe Associates, 51/F Hopewell Centre, 183 Queens Road East, Wanchai,
Kong.
Kong.
Hong Kong.
5.
Powa Technologies Group PLC, Heron Tower, 34th-35th Floor, 110 Bishopgate,
6.
Hong Kong.
Alessandro Gadotti, 51/F Hopewell Centre, 183 Queens Road East, Wanchai,
Attorneysfor Plaintiff
UNITED STATES DISTRICT COURT
14 CV
X
'.j
GREGORY GRESH,
Plaintiff
-against-
(ECF)
COMPLAINT
Defendants.
X
Plaintiff, Gregory Gresh, by his counsel, Ropers Majeski Kohn & Bentley, P.C,
for his Complaint against MPayMe Partners Ltd., MPayMe Limited, MPayMe (USA)
LLC, MPayMe Associates Ltd, Powa Technologies Group PLC and Alessandro Gadotti
(collectively referred to herein as, "Defendants") alleges, as follows:
INTRODUCTION
1.
This is an action for constructive discharge and to enforce Plaintiffs rights
under the terms of his employment agreement as Chief Executive Officer ("CEO") of
MPayMe (USA) LLC ("MPayMe USA"), a United States subsidiary of MPayMe
Partners Limited ("MPayMe Partners").
2.
Plaintiff was granted certain stock options pursuant to his employment
agreement that should have vested upon the closing of the share purchase agreement
among MPayMe Partners , MPayMe Associates Ltd ("MPayMe Associates") and Powa
Technologies Group PLC ("Powa") dated May 14, 2014 (the "Purchase Agreement"),
pursuant to which the business of MPayMe Limited and its subsidiaries was sold to
Powa.
RC1/7735642.1/KJA
3.
Despite Plaintiffs position as CEO of MPayMe USA and a member of the
Board of Directors of MPayMe Partners, he was never consulted or permitted to vote on
the Purchase Agreement entered into with Powa. In fact, Defendants intentionally
excluded Plaintiff from the discussions, as Defendants' intent was to remove Plaintiff
from his position, divest him of the Shares granted to him, as well as eliminate his stock
options and any other compensation and benefits to which he was entitled.
4.
Plaintiff now seeks damages for inter alia, Defendants' breach of the
Employment Agreement, fraud, conversion, promissory estoppel, unjust enrichment,
quantum meruit, attorneys' fees and other appropriate relief.
JURISDICTION
5.
Jurisdiction is conferred upon this Court by 28 U.S.C. 1332, because the
matters in controversy exceed $75,000.00 and the parties satisfy diversity requirements.
THE PARTIES
6.
Plaintiff is a resident of the State of New Jersey and was formerly
employed by MPayMe USA at its office located at 405 Lexington Avenue, New York,
NY 10174.
7.
MPayMe Partners is a foreign corporation organized under the laws of
Hong Kong with its principal address at 51/F Hopewell Centre, 183 Queens Road East,
Wanchai, Hong Kong.
8.
MPayMe Limited is a foreign corporation organized under the laws of
Hong Kong with its principal address at 51/F Hopewell Centre, 183 Queens Road East,
Wanchai, Hong Kong.
9.
MPayMe USA is a foreign corporation organized under the laws of the
state of Delaware with its principal address at 405 Lexington Avenue, New York, NY
10174.
10.
MPayMe Associates is a foreign corporation organized under the laws of
Hong Kong with its principal address at 51/F Hopewell Centre, 183 Queens Road East,
Wanchai, Hong Kong.
11.
Kingdom with its principal address at Heron Tower, 34th-35th Floor, 110 Bishopgate,
Liverpool Street, London, EC2N 4AY.
12.
Alessandro Gadotti ("Gadotti") is a resident of Hong Kong and is
currently employed by Defendant Powa at its office located at 51/F Hopewell Centre, 183
Queens Road East, Wanchai, Hong Kong.
13.
The defendants listed in Paragraphs 7 through 10 and Defendant Gadotti
are collectively referred to herein as the "MPayMe Defendants".
RC1/7735642.1/KJA
STATEMENT OF FACTS
14.
Plaintiff was employed as the CEO of MPayMe USA under the terms of
an employment agreement dated July 1, 2012 (the "Employment Agreement").
15.
The principal terms of the Employment Agreement are: i) an annual salary
of $230,000; ii) a stock option package worth over ten million dollars ($10,000,000.00),
the details of which were to be provided 6 months from the date of the Employment
Agreement; and iii) a discretionary bonus of $100,000. A copy of the Employment
Agreement is attached hereto as Exhibit A.
16.
During the prior three years at his position as a Vice President of
MasterCard, his compensation averaged over $336,000 per year. Thus, one of Plaintiffs
primary motivators for accepting employment with MPayMe was the promise of, and
potential upside in, stock options.
17.
Under the Additional Terms of the Employment Agreement, Plaintiff was
to receive a formal stock option package within 6 months of the date of the Employment
Agreement. To date, Plaintiff has not received such package.
18.
From the outset of his employment, Plaintiff began improving the
operations and net worth of MPayMe.
19.
On or about July 16, 2012, Plaintiff began meeting with current and
potential investors.
20.
On or about July 23, 2012, Plaintiff began meeting with executive
candidates to help MPayMe build operations throughout Asia-Pacific ("APAC") and
North America.
21.
Plaintiff was personally responsible for several executive hires including
Ben Carlin, Global Chief Finance Officer ("Carlin"), and Thomas Belousek, Global Chief
Risk Officer.
22.
When Plaintiff started at MPayMe USA, he determined that there was a
significant knowledge gap in how ACH, credit and debit transactions were authorized,
cleared and settled. Plaintiff contributed significant knowledge assets to MPayMe that
helped executive and product management understand the entire transaction value chain.
23.
On or about September 10, 2012, Plaintiff finished hiring the core North
America team with extensive payments, sales and marketing experience.
24.
At the time, MPayMe's software product called ZNAP was not yet ready
for launch. Plaintiff and his team: (i) ascertained from pre-selling activities that
merchants and their point of sale ("POS") partners were going to resist direct integration
of ZNAP into their POS systems; (ii) learned that ZNAP's payment-oriented value
proposition was not compelling enough for merchant acceptance and consumer adoption;
and (iii) therefore recommended major changes to ZNAP features and functionality that
RC1/7735642.1/KJA
ultimately helped MPayMe secure the first few anchor customers and praise from
industry analysts.
25.
Although it was not originally part of his offering package and not
contained in the Employment Agreement, due to his immediate and significant
contributions to the growth of the business, Plaintiff, in or around September 2012,
received a grant of 4.63% of the shares of MPayMe Partners (the "Shares").
26.
On or about November 22, 2012, Plaintiff was voted to the Board of
Directors of MPayMe Partners by its members.
27.
Over the course of the next six to seven months, MPayMe USA performed
presales. One of the core features of ZNAP 1.Ox was Bill Pay and, in the fourth quarter
of 2013, MPayMe USA performed a successful test run of Bill Pay with Pitney Bowes.
28.
The successful test led to a pilot agreement with Pitney Bowes that was
leveraged by sales in other regions to secure new customers. On several occasions, Scott
Moore ("Moore"), Owner and Chief Executive Officer of the APAC Franchise for
MPayMe, commented that Pitney Bowes was the single most important customer that he
referenced to prospects in APAC.
29.
Although MPayMe USA had success with the Bill Pay test run and
secured a pilot agreement with Pitney Bowes, merchant functionality in ZNAP l.Ox was
limited and very few North American merchants were willing to integrate ZNAP 1.Ox
into their POS systems. Accordingly, MPayMe USA decided to presell what they
believed to be a more robust product, ZNAP 1.5.
30.
Notwithstanding, full functionality of ZNAP 1.5 was never achieved in
2013 as Plaintiff witnessed platform crashes during fourth quarter pilots.
31.
Since ZNAP 1.5 was not production-ready and merchants were not eager
to integrate ZNAP l.Ox, Plaintiff began a downward adjustment of MPayMe USA 2014
revenue forecasts from $7.8MM to $530,000.
32.
Over the final months of 2013 leading into 2014, Plaintiff became
increasingly concerned about Gadotti's financial representation to investors.
33.
Accordingly, Plaintiff scheduled a Global Meeting to address financial,
technological and operational problems, and force transparency across the global
organization.
34.
35.
36.
On or about January 8, 2014, Plaintiff sent Gadotti a proposed agenda for
the Global Meeting.
RC1/7735642.1/KJA
37.
A few days before the meeting however, Gadotti took-over and re-casted
the meeting agenda to focus on business development and the product roadmap.
38.
On or about January 27, 2014, during the Global Meeting, Gadotti
submitted a global forecast of $34.8MM by end of first quarter 2015. The Plaintiff only
submitted a regional forecast of $530,000 for 2014.
39.
When Plaintiff challenged the integrity of the global revenue forecast,
Gadotti became visibly upset. Upon information and belief, Gadotti began planning
Plaintiffs termination.
40.
In fourth quarter of 2013, Jefferies Investment Bank entered into an
agreement with MPayMe to help MPayMe raise more investment capital. Plaintiff was
given access to a Dropbox folder for sharing due diligence documents with Jefferies.
41.
After the Global Meeting, Plaintiff started reviewing documents in the
Dropbox and learned that Gadotti had already informed the Board of a pending decision
to terminate Plaintiffs employment. A few days thereafter, the same minutes document
was removed from the Dropbox.
42.
On March 19, 2014, almost two years after the commencement of his
employment, Plaintiff received a letter from Steven Taylor, who, at the time, was the
Global CFO of Defendant MPayMe Limited regarding an "Update on Global Stock
Option Plan" (the "Option Letter"). A copy of the Option Letter is attached as Exhibit B.
43.
The Option Letter stated that "we expect to be in a position to roll out
legal documents for signing in the early part of this year."
44.
The Option Letter also stated that it is a three-year plan, with "the vesting
date (date on which the options transfer to shares) of the option being 31 March 2017, or
(ifearlier) a sale ofthe business or IPO ofthe business [emphasis added]."
45.
The Option Letter further provided that Plaintiffs percentage allocation of
the total MPayMe Limited shares calculated was 0.359%, which on the then total number
of shares, 30,951,920, was equivalent to 111,164 options for Plaintiff.
46.
The Option Letter then states that "on the predicted future value of the
company, we anticipate this number to equate to US$10,354,680."
47.
On or about April 10, 2014, at a conference in Las Vegas, Dan Wagner,
Powa's Global CEO & Founder, approached Plaintiff.
Plaintiff learned from his discussion with Wagner that due diligence was
48.
underway for Powa to acquire MPayMe.
49.
As a Board Director for MPayMe Partners, it was both improper and
upsetting to Plaintiff that he was not informed by Gadotti of the intention to sell
MPayMe.
RC1/7735642.1/KJA
50.
Upon information and belief, Gadotti did not terminate Plaintiff due to the
pending acquisition.
51.
Due diligence and negotiation of the Purchase Agreement was primarily
managed by Gadotti, Taylor, and Tommaso Natale, Chief Product & Strategy Officer.
Plaintiff was excluded from almost all aspects of the deal.
52.
On or about April 23, 2014, Gadotti called an emergency meeting of the
MPayMe Partners Board to vote on whether to let Powa acquire MPayMe. Upon
information and belief, the meeting was recorded. Plaintiff attended the meeting by
telephone.
53.
Gadotti said the deal was for $9MM and share-to-share stock equating to
Gadotti did not distribute the Powa Term Sheet to the Plaintiff before the
meeting.
55.
56.
The MPayMe Partners Board gave Gadotti the power to sign off only on
57.
All Board members were supposed to get a copy of the signed Term Sheet
and then convene at a later meeting to vote on the final deal. Plaintiff never received a
copy of the signed Term Sheet and, to his knowledge, the meeting and vote on the final
deal never occurred.
58.
On or about June 19, 2014, MPayMe USA was informed that the Powa
Purchase Agreement was executed. However, the terms of the Purchase Agreement had
dramatically changed to only a share-to-share stock deal worth $75MM at Powa's
valuation. The Plaintiff was shocked and upset that the final terms were not openly
discussed and vetted in another emergency MPayMe Partners Board meeting.
59.
Pursuant to the Purchase Agreement dated May 14, 2014, MPayMe
Partners and MPayMe Associates sold, and Powa acquired, a majority of the issued share
capital and full control of MPayMe Limited and subsidiaries.
60.
Schedule 6 (Options) to the Purchase Agreement provides that MPayMe
Limited would grant options to employees of MPayMe Limited and its subsidiaries and
the "Seller will procure that Option Agreements are returned to the Company and
executed prior to completion."
61.
Despite the triggering event of the sale to Powa, MPayMe Limited never
issued an Option Agreement, and Powa waived the closing condition to the detriment of
Plaintiff and all other employee option holders.
RC1/7735642.1/KJA
62.
July 1, 2014, Jeff Max, Powa CEO of the Americas ("Max"), had a discussion with
Plaintiff about his future with Powa.
63.
Although Plaintiff never received formal written termination notice of the
Employment Agreement from MPayMe and there was no discussion about severance or
other incentives such as stock-options, Max asked Plaintiff to move to a three month
advisory position to help transition relationships and knowledge assets (the "Transition
Period").
64.
Notwithstanding Plaintiffs cooperation during the Transition Period and
his constructive termination, Defendants continued to dishonor his contractual
entitlements and, in fact, sought to further reduce his share entitlement.
65.
On or about July 18, 2014, Gadotti and Plaintiff had a discussion about his
exit from MPayMe Partners.
66.
Plaintiff asked Gadotti about the terms and conditions of his exit, to which
Gadotti replied that exiting would mean Plaintiffs forfeit of his Shares, but he was
considering letting employees that were onboard for more than 2 years keep some of their
stock options.
67.
When Plaintiff asked Gadotti if there was another option to prevent losing
his Shares, he offered to be custodian of Plaintiff s Shares. Plaintiff told Gadotti that he
would discuss this option with his counsel.
68.
On or about September 24, 2014, toward the end of the Transition Period,
Taylor informed Plaintiff that pursuant to his agreement with Gadotti, Plaintiff would
entirely forfeit his stock options, reduce his Shares from 4.63% to 2%, and let Gadotti be
the custodian of the remaining 2%.
69.
70.
Notwithstanding Plaintiffs objection, on or about October 16, 2014,
Taylor sent Plaintiff a draft agreement for Plaintiff to forfeit and transfer 2.63% of the
Shares to MPayMe Limited for no consideration.
71.
On or about October 27, 2014, Plaintiff received an email from Taylor
stating that he owes $11,067 to MPayMe Partners for legal fees associated with Powa's
acquisition of MPayMe. The fee is based on the Plaintiffs 4.63% of Shares.
72.
Around the same time, Melanie Hobson, Powa Global Head of HR, asked
Plaintiff when his final day of work would be and whether he is willing to sign a waiver
and release of all claims against Defendants.
73.
Despite not ever receiving formal termination notice under the
Employment Agreement, and under the circumstances of the sale of MPayMe to Powa,
RC1/7735642.1/KJA
there is no basis for forfeiture of any of Plaintiffs Shares, or for Defendants not to buy
back Plaintiffs shares at fair value.
74.
Accordingly, Plaintiff demands purchase of the Shares by any Defendant
entity at a price per Share equal to the agreed valuation of the MPayMe shares pursuant
to the Purchase Agreement.
75.
Plaintiffs lawyers have been advised by Taylor that Powa intends to issue
shortly option agreements to employees of the MPayMe companies that were to receive
option agreements much earlier.
76.
Despite the sale of MPayMe to Powa, which should have triggered the
vesting of Plaintiffs MPayMe options, according to the Option Letter, Taylor also
informed Plaintiffs attorneys that the MPayMe options will be transferred to new Powa
options that will not vest until 2017. Conveniently for Defendants, this does nothing for
Plaintiff, as he has been told that his services are no longer needed and his employment
has effectively been terminated.
77.
Upon information and belief, MPayMe intentionally delayed issuance of
the contractually required option agreements and that Powa participated in this plan and
benefited from it. The purpose clearly was to avoid issuance of options to previously
valued employees, including Plaintiff, whose services Powa has decided are no longer
needed.
78.
caused Plaintiff substantial harm. Had he received his promised options in March, April
or even May 2014, they would have vested upon completion of the sale of the business in
June.
79.
In the November 9, 2014 issue of the Wall Street Journal, it was reported
that Wellington Management invested an additional $80MM into Powa. Wellington,
which last year invested $76MM in 2013, valued Powa around $2.7B.
FIRST CAUSE OF ACTION:
BREACH OF CONTRACT
80.
Plaintiff repeats and realleges the allegations contained in paragraphs 1
through 78 as if fully set forth at length herein.
81.
The MPayMe Defendants failed to allow the exercise of stock options
provided for in the Employment Agreement, notwithstanding assurances made by them,
by and through Gadotti, that the stock options would be exercisable by Plaintiff upon a
sale of MPayMe.
82.
The failure of the MPayMe Defendants to provide Plaintiff with a stock
option plan explaining the exerciseability of his options and the failure to allow the
exercise of the stock options, constitutes a breach of the Employment Agreement and the
Option Letter.
8
RC1/7735642.1/KJA
83.
Upon the sale of MPayMe Limited to Powa, Powa assumed the
obligations, and therefore is also liable for the breach as successor in interest, of the
Employment Agreement.
84.
Agreement.
85.
86.
88.
Defendant MPayMe represented that the stock options set forth in the
Employment Agreement would be memorialized in employee benefit plans adopted by
the company within six months.
89.
Plaintiff as and for an inducement for Plaintiff to enter into the Employment Agreement
and agree to employment as Chief Executive Officer of MPayMe USA.
90.
The MPayMe Defendants refused repeated requests for information
regarding issuance and exercise of Plaintiffs promised stock options and failed and/or
refused Plaintiffs exercise of the stock options upon the sale of MPayMe to Powa.
91.
The representations of the MPayMe Defendants regarding the grant of the
stock options to Plaintiff were false when made and were made for the purposes of
inducing the Plaintiff to accept employment with MPayMe USA.
92.
At all times material hereto, the representations of the MPayMe
Defendants were materially false and misleading and intended to deceive the Plaintiff.
93.
The MPayMe Defendants: (i) knew that the representations made by it, by
and through its employees, agents and representatives, as aforesaid, were materially false
and misleading; (ii) had no intention of formalizing the issuance, or allowing the exercise
of, the stock options; (iii) and made the representations with the specific intention to
deceive the Plaintiff to secure his employment with MPayMe USA.
RC1/7735642.1/KJA
94.
Plaintiff reasonably relied upon the representations of the MPayMe
Defendants in accepting and continuing employment with MPayMe USA.
95.
As a direct, proximate and foreseeable result of the fraud of the MPayMe
Defendants, Plaintiff has been damaged in an amount subject to proof at trial.
96.
Defendant Powa, by assuming the obligations of the Employment
Agreement, and failing to allow Plaintiff to exercise the stock options, has knowingly
participated in the fraud.
97.
The fraud alleged herein was calculated, deliberate, wonton and malicious
and justifies an award of punitive damages.
THIRD CAUSE OF ACTION:
CONVERSION
98.
Plaintiff repeats and realleges the allegations contained in paragraphs 1
through 96 as if fully set forth at length herein.
99.
At the time of Plaintiff s constructive discharge, he had a vested right in
the stock options pursuant to the Employment Agreement and the representations of the
MPayMe Defendants.
100. Notwithstanding Plaintiffs vested right in the shares represented by the
stock options, after the sale of MPayMe Limited to Powa, the MPayMe Defendants
unlawfully purported to terminate, cancel, and revoke his options, and has refused to
allow Plaintiff to exercise his options.
101. The MPayMe Defendants' conduct in purporting to terminate, cancel, and
revoke Plaintiffs vested stock options constitutes the unlawful exercise of dominion and
control over the options belonging to Plaintiff without Plaintiffs consent. Such exercise
of dominion and control by the MPayMe Defendants was unlawful and was
unauthorized.
102. Upon the sale of MPayMe Limited to Powa, Powa assumed the
obligations, and therefore is also liable for the unlawful exercise of dominion and control
over the stock options belonging to Plaintiff without Plaintiffs consent.
104. Defendants' conduct has been intentional, wanton and malicious, entitling
Plaintiff to punitive as well as compensatory damages.
10
RC1/7735642.1/KJA
107. The Option Letter Plaintiff received made further unambiguous promises
with respect to the vesting of the options.
108. One of Plaintiffs primary motivators for accepting employment with
MPayMe was the promise of, and potential upside in, stock options, which he reasonably
relied upon in making his decision to join MPayMe USA and his continued employment
therewith.
109. By failing to uphold the terms of the Employment Agreement the Option
Letter, Plaintiff has been damaged.
110. Upon the sale of MPayMe Limited to Powa, Powa assumed the
obligations, and therefore is also liable for the unlawful exercise of dominion and control
over the stock options belonging to Plaintiff without Plaintiffs consent.
111. As a result of Defendants' wrongful conduct, Plaintiff is entitled to
compensation and benefits in an amount to be established at trial, including interest, plus
attorneys' fees and costs.
FIFTH CAUSE OF ACTION:
UNJUST ENRICHMENT
114.
equity and good conscience to permit Defendants to retain what is owed to Plaintiff.
11
RC1/7735642.1/KJA
QUANTUM MERUIT
116.
117.
services rendered.
118.
119.
120.
121.
actions.
122.
WHEREFORE, Plaintiff demands that judgment be entered in his favor and that
the Court order and award Plaintiff the following relief against Defendant:
A. On Plaintiffs First Cause of Action in an amount to be determined at the trial of
this action including interest thereon, pre and post-judgment, attorneys' fees and the costs
of suit;
B.
of this action including interest thereon, pre and post-judgment, attorneys' fees and the
costs of suit;
C. On Plaintiffs Third Cause of Action in an amount to be determined at the trial of
this action including interest thereon, pre and post-judgment, attorneys' fees and the costs
of suit;
D. On Plaintiffs Fourth Cause of Action in an amount to be determined at the trial of
12
RC1/7735642.1/KJA
this action including interest thereon, pre and post-judgment, attorneys' fees and the costs
of suit;
E. On Plaintiffs Fifth Cause of Action in an amount to be determined at the trial of
this action including interest thereon, pre and post-judgment, attorneys' fees and the costs
of suit;
F.
this action including interest thereon, pre and post-judgment, attorneys' fees and the costs
of suit;
G. On Plaintiffs Seventh Cause of Action in an amount to be determined at the trial
of this action including interest thereon, pre and post-judgment, attorneys' fees and the
costs of suit;
H. Punitive damages and such other and further relief as the Court may deem just
and proper.
I. Costs of this action, together with reasonable attorneys' fees;
Dated: New York, New York
December 29, 2014
ROPERS MAJESKI KOHN & BENTLEY P.C.
Kenneth J. Anand
13
RC1/7735642.1/KJA
EMPLC>YMENT CONTRACT
BACKGROUND:
B. The Employer is of the opinion that the Employee has the necessary qualifications,
experience and abilities to assist and benefit the Employer in its business.
C. The Employer desires to employ the Employee and the Employee has agreed to accept
and enter such employment upon the terms and conditions set out in this Agreement.
IN CONSIDERATION OF the matters described above and of the mutual benefits and
obligations set forth in this Agreement,the receipt and sufficiency of which consideration is
hereby acknowledged, the panics to this Agreement agree as follows:
1. The Employee will commence permanent full-time employment with the Employer on
the 9th day of July, 2012 (the "Commencement Date").
2. The Employee must successfully complete a probationary period of three (3) montlis (the
'Probationary Period') beginning on the Commencement Date. At any time during the
Probationary Period, as and where permitted by law. the Employer will have the right to
terminate employment without any notice or compensation to the Employee other than
wages owed for hours of work already completed.
3. The Employer agrees to employ the Employee as a CEO USA. The Employee will be
expected to perform the following job duties:
Manage and Supervise the United States Branch of the company. With full P&L
Responsibilities over the performance of the company, the CEO will oversee that the
company in US will perform according to the business plan and the objectives, compliant
with the laws and regulations and in adherence to the global strategy. The CEO will be
part of the global management team.
4. The Employee agrees to be employed on the terms and conditions set out in this
Agreement. The Employee agrees to be subject to the general supervision of and act
pursuant to the orders, advice and direction of the Employer.
5. The Employee will perform any and all duties that are reasonable and that are
7. The Employee agrees to abide by the Employer's rules, regulations, and practices,
including those concerning work schedules, vacation and sick leave, as they may from
time to time be adopted or modified.
Employee Compensation
8. Compensation paid to the Employee for the services rendered by the Employee as
required by this Agreement (the "Compensation") will include a salary of $230,000.00
(USD) per year as well as any compensation paid for Overtime Hours.
9. This Compensation will be payable end of the month while this Agreement is in force.
The Employer is entitled to deduct from the Employee's Compensation, or from any other
compensation in whatever form, any applicable deductions and remittances as required
by law.
10. The Employee understands and agrees that any additional compensation paid to the
Employee in the form of bonuses or other similar incentive compensation will rest in the
sole discretion of the Employer and that the Employee will not earn or accrue any right to
incentive compensation by reason of the Employee's employment.
11. The Employer will reimburse the Employee for all reasonable expenses, in accordance
with the Employer's policy as in effect from time to time, including but not limited to,
any travel and entertainment expenses incurred by the Employee in connection with the
business of the Employer. Expenses will be paid within a reasonable time after
submission of acceptable supporting documentation.
12. Place of Work
12. The Employee's primary place of work will be at the following location:
o
13. The Employee will also be required to work wherever the duty and the business
development of the company will require, either domestically or internationally.
14. The Employer will inform the Employee in advance of the Employee being required to
work at other locations.
Employee Benefits
15. The Employee will be entitled to only those additional benefits that are currently
available as described in the Employer's employment booklets and manuals or as required
by law. Among the benefits the Employer will provide an Health insurance plan.
16. Employer discretionary benefits are subject to change, without compensation, upon the
Employer providing the Employee with 60 days written notice of that change and
providing that any change to those benefits is taken generally with respect to other
employees and does not single out the Employee.
17. Vacation
17. The Employee will be entitled to three weeks of paid vacationeach year during the term
of this Agreement, or as entitled by law, whichever is greater.
18. The times and dates for any vacation will be determined by mutual agreement between
the Employer and the Employee.
19. Upon termination of employment, the Employer will pay compensation to the Employee
for any accrued and unused vacation days.
20. The Employee agrees to devote full-time efforts, as an employee of the Employer, to the
employment duties and obligations as described in this Agreement.
Conflict of Interest
21. During the term of the Employee's active employment with the Employer, it is
understood and agreed that any business opportunity relating to or similar to the
Employer's actual or reasonably anticipated business opportunities (with the exception of
personal investments in less than 1% of the equity of a business, investments in
established family businesses, real estate, or investments in stocks and bonds traded on
interests of the Employer without the written consent of the Employer, which consent
will not be unreasonably withheld.
23. Non-Competition
23. The Employee agrees that during the Employee's term of active employment with the
Employer and for a period of six (6) months after the end of that term, the Employee will
not, directly or indirectly, as employee, owner, sole proprietor, partner, director, member,
consultant, agent, founder, co-ventureror otherwise, solely or jointly with others engage
in any business that is in competition with the business of the Employerwithin any
geographic area in which the Employer conducts its business, or give advice or lend
credit, money or the Employeeas reputation to any natural person or business entity
engaged in a competing business in any geographic area in which the Employer conducts
its business.
24. Non-Solicitation
24. The Employee understands and agrees that any attempt on the part of the Employee to
induce otheremployees or contractors to leave the Employer's employ, or any effort by
the Employee to interfere with the Employer's relationship with its other employees and
contractors would be harmful and damaging to the Employer. The Employee agrees that
during the Employee's term of employment with the Employer and for a period of two (2)
years after the end of that term, the Employee will not in any way, directly or indirectly:
a. Induce or attempt to induce any employee or contractorof the Employer to quit
employment or retainer with the Employer;
b. Otherwise interfere with or disrupt the Employer's relationship with its employees
and contractors;
d. Solicit, entice, or hire away any employee or contractor of the Employer for the
purpose of an employment opportunity that is in competition with the Employer.
This non-solicitation obligation as described in this section will be limited to employees
or contractors who were employees or contractors of the Employer during the period that
the Employee was employed by the Employer.
During the term of the Employee's active employment with the Employer, and for two (2)
years thereafter, the Employee will not divert or attempt to divert from the Employer any
business the Employer had enjoyed, solicited, or attempted to solicit, from its customers,
prior to termination or expiration, as the case may be, of the Employee's employment
with the Employer.
Confidential Information
1. The Employee acknowledges that, in any position the Employee may hold, in and as a
result of the Employee's employment by the Employer, the Employee will, or may, be
making use of, acquiring or adding to information which is confidential to the Employer
(the "Confidential Information") and the Confidential Information is the exclusive
property of the Employer.
2. The Confidential Information will include all data and information relating to the
business and management of the Employer, including but not limited to, proprietary and
trade secret technology and accounting records to which access is obtained by the
Employee, including Work Product, Computer Software, Other Proprietary Data,
Business Operations, Marketing and Development Operations, and Customer
Information.
3. The Confidential Information will also include any information that has been disclosed
by a third party to the Employer and is governed by a non-disclosure agreement entered
into between that third party and the Employer.
4.
e. The Employee rightfully obtains from a third party who has the right to transfer or
disclose it.
4. The Confidential Information will also not include anything developed or produced by
the Employee during the Employee's term of employment with the Employer, including
but not limited to, any intellectual property, process, design, development, creation,
research, invention, know-how, trade name, trade-mark or copyright that:
1. The Employee agrees that a material term of the Employee's contract with the Employer
is to keep all Confidential Information absolutely confidential and protect its release from
the public. The Employee agrees not to divulge, reveal, report or use, for any purpose,
any of the Confidential Information which the Employee has obtained or which was
disclosed to the Employee by the Employer as a result of the Employee's employment by
the Employer. The Employee agrees that if there is any question as to such disclosure
then the Employee will seek out senior management of the Employer prior to making any
disclosure of the Employer's information that may be covered by this Agreement.
2. The Employee agrees and acknowledges that the Confidential Information is of a
proprietary and confidential nature and that any disclosure of the Confidential
Information to a third party in breach of this Agreement cannot be reasonably or
adequately compensated for in money damages, would cause irreparable injury to
Employer, would gravely affect the effective and successful conduct of the Employer's
business and goodwill, and would be a material breach of this Agreement.
3. The obligations to ensure and protect the confidentiality of the Confidential Information
imposed on the Employee in this Agreement and any obligations to provide notice under
this Agreement will survive the expiration or termination, as the case may be, of this
Agreement and will continue for a period of five (5) years from the date of such
expiration or termination.
4. The Employee may disclose any of the Confidential Information:
a. To a third party where Employer has consented in writing to such disclosure; and
1. The Employee acknowledges and agrees that all rights, title and interest in any
Confidential Information will remain the exclusive property of the Employer.
Accordingly, the Employee specifically agrees and acknowledges that the Employee will
have no interest in the Confidential Information, including, without limitation, no interest
in know-how, copyright, trade-marks or trade names, notwithstanding the fact that the
Employee may have created or contributed to the creation of the Confidential
Information.
2. The Employee waives any moral rights that the Employee may have with respect to the
Confidential Information.
1. The Employee agrees that, upon request of the Employer or upon termination or
expiration, as the case may be, of this employment, the Employee will turn over to the
Employer all Confidential Information belonging to the Employer, including but not
limited to, all documents, plans, specifications, disks or other computer media, as well as
any duplicates or backups made of that Confidential Information in whatever form or
media, in the possession or control of the Employee that:
a. May contain or be derived from ideas, concepts, creations, or trade secrets and
other proprietary and Confidential Information as defined in this Agreement; or
1. Where the Employee has breached any reasonable term of this Agreement or where there
is just cause for termination, the Employer may terminate the Employee's employment
without notice, as permitted by law.
2. The Employee and the Employer agree that reasonable and sufficient notice of
termination of employment by the Employer is the greater of two (2) months or any
minimum notice required by law.
3. If the Employee wishes to terminate this employment with the Employer, the Employee
will provide the Employer with notice of two (2) months. As an alternative, if the
Employee co-operates with the training and development of a replacement, then
sufficient notice is given if it is sufficient notice to allow the Employer to find and train
the replacement.
4. The Termination Date specified by either the Employee or the Employer may expire on
any day of the month and upon the Termination Date the Employer will forthwith pay to
the Employee any outstanding portion of the wage, accrued vacation and banked time, if
any, calculated to the Termination Date.
5. Once notice has been given by either party for any reason, the Employee and the
Employer agree to execute their duties and obligations under this Agreement diligently
and in good faith through to the end of the notice period. The Employer may not make
any changes to wages, wage rate, or any other term or condition of this Agreement
between the time termination notice is given through to the end of the notice period.
Remedies
1. In the event of a breach or threatened breach by the Employee of any of the provisions of
this Agreement, the Employee agrees that the Employer is entitled to a permanent
injunction, in addition to and not in limitation of any other rights and remedies available
In the event of a breach or threatened breach by the Employee of any of the provisions of
this Agreement, the Employee agrees that the Employer is entitled to a permanent
injunction, in addition to and not in limitation of any other rights and remedies available
to the Employer at law or in equity, in order to preventor restrain any such breach by the
Employee or by the Employee's partners, agents, representatives, servants, employees,
and/or any and all persons direcdy or indirectly acting for or with the Employee.
Scwrabilte
The Employer and the Employee acknowledge that this Agreement is reasonable, valid
and enforceable. However,if any term, covenant, condition or provision of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, it is the parties' intent that soch provision be changed in scope by the
courtonly to the extent deemed necessary by that court to renderthe provision
reasonable and enforceableand the remainder of the provisions of this Agreement will in
no way be affected, impaired or invalidated as a result.
Notices
Employer;
Name:
MPAYME LLC
Address:
Fax:
Email:
Alessandro.gadotti@nipayme.com
Employee:
Name:
GREG GRESH
Address:
Fax:
Email:
Modification of Agreement
- The CEO will be entitled to 100,000 USD bonus each year. The bonus is discretionary
and based on performance
- The CEO will be entitled to a stock option package, which terms and detail contractual
conditions will be provided within 6 months. The value of the stock options if the
company will meet the targets in the business plan will be in 2017 equal to 40x the
annual average salary gained in the 5 years between 2012 and 2017.
The stock options will have a vesting period of 5 years.
2. Additional Funding and Stocks
The company has nowa Venture capital backing up to 16M USD. The Venture Capital
fund has been withdrawn for 6M USD in total in exchange of 26% of the holding
MPAYME HK LTD . If fully withdrawn the shares to be transferred to the VC will be
50% of the company, or more depending on the timing. It is clear that the shareholders
aim is to reduce as much as possible the withdrawals and at the same time search for
alternative more leveraged investments. All the people in the management team are
requested to support the fund raising.
In 2017 if the number of shares transferred from the shareholders to venture capitals or
investors will be less than 50% then the global management team composed by the CEO
of US, the CEO of Europe, and the CEOs of China and Japan will be entitled in equal
proportion to a percentage of shares of the company equal to half the difference between
the 50% initial forecast and the actual shares ceded to venture capitals or external
investors.
3. Funding Premium
The Employee with by its own means will raise funds for the company will be entitled to
2% fund raising commission.
Governing Law
This Agreement will be construed in accordance with and governed by the laws of the
state of New York.
Definitions
For the purpose of this Agreement the following definitions will apply:
a. "Overtime Hours" means the total hours worked in a day or week in excess of the
maximum allowed, as defined by local statute, for a work day or a work week.
b. 'Work Product' means work product information, including but not limited to,
work product resulting from or related to work or projects performed or to be
performed for the Employer or for clients of the Employer, of any type or form in
any stage of actual or anticipated research and development.
c. 'Computer Software' means computer software resulting from or related to work
or projects performed or to be performed for the Employer or for clients of the
Employer, of any type or form in any stage of actual or anticipated research and
development, including but not limited to, programs and program modules,
routines and subroutines, processes, algorithms, design concepts, design
specifications (design notes, annotations, documentation, flowcharts, coding
sheets, and the like), source code, object code and load modules, programming,
program patches and system designs.
e. 'Business Operations' means operational information, including but not limited to,
internal personnel and financial information, vendor names and other vendor
g. 'Customer Information' means customer information, including but not limited to,
names of customers and their representatives, contracts and their contents and
parties, customer services, data provided by customers and the type, quantity and
specifications of products and services purchased, leased, licensed or received by
customers of the Employer.
under this Agreement. The parties acknowledge that various provisions of this
Agreement will survive the Termination Date.
Ge.peraI..Pro;yisioas
2. Headings are inserted for the convenience of the parties only and are not to be considered
when interpreting this Agreement. Words in the singular mean and include the plural and
vice versa. Words in the masculine mean and include the feminine and vice versa.
3. Nofailure or delay by either party to this Agreement in exercising any power, right or
privilege provided in this Agreement will operate as a waiver, nor will any single or
partial exercise of such rights, powers or privileges preclude any further exercise of them
or the exercise of any other right, power or privilege provided in this Agreement.
4. This Agreement will inure to the benefit of and be binding upon the respective heirs,
executors, administrators, successors and assigns, as the case may be, of the Employer
and the Employee,
5. This Agreement may be executed in counterparts. Facsimile signatures are binding and
are considered to be original signatures.
6. This Agreementconstitutes the entire agreement between the parties and there are no
further items or provisions, either oral or written. The parties to this Agreement stipulate
that neither of them has made any representations with respect to the subject matter of
this Agreement except such representations as are specifically set forth in this
Agreement.
IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on
this 1st day of July, 2012.
EMPLOYER:
MPAYME LLC
Per:.
(SEAL)
EMPLOYEE:
7-2-'/2GRESH
19 March 2014
Dear Gregory
Voura,locaMdmultlpleofthelnf|atjonadjuste((sa^of ^^
Under the Stock Option Plan if k
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t^aiso proposed that in genera, you wil, need to be in the employment of the group at 31 March
Your percentage allocation of the total number of MPayMe Ltd shares calculated as above is:
0.359%
On the predicted future value of the company we anticipate this number to equate to US$10,354,680.*
(Future Value of Company/number ofshares)*options awarded ($2,886,241,533/30,951,820)*111164
*- and caused
We hope you share our enthusiasm and ambition in rolling out our Stock Option Plan at th-
yone eise who is employed by or otherwise engaged with the MPayMene group.
Best regards
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Steven Taylor
Global CFO
MPayMe Limited
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UPDATE ON GLOBAL STOCK OPTION PLAN
GREGORY GRESH
411 Ocean Road
Spring Lake
NJ 07762-1027
USA
19 March 2014
Dear Gregory
We are delighted to be able to update you on the MPayMe Stock Option Plan as referred to in your
employment contract signed 1July 2012. The Plan is now well advanced and we expect to be in a
position to roll out legal documents for signing in the early part of this year.
We have decided on certain key criteria and conditions relating to the Stock Option Plan (subject to any
change to accommodate local law requirements, local tax advice and best practice, on which we are
seeking advice) and we would like to teli you about these now. We also want to tell you how your own
award is to be calculated.
It is intended that the number of shares (in percentage of the total share capital) that will be allocated
to you will becalculated onthe following basis:
Your annual base salary (US $equivalent) as of 31st January 2014 of: US$230,000
An increase for inflation by 3% per annum: US$$258,867
The expected Enterprise Value of Mpayme Ltd at 31.3.2017 of US$2.886bn based on the
expected revenues and profit of the Company's current three year financial plan.
Under the Stock Option Plan it is our intention that you will be granted options in our top company
MPayMe Limited. The Stock Option Plan is designed to enable you to benefit from appreciation in the
value of the whole group's business, and will align your interest with our shareholders.
It is proposed that this is athree year plan, with the Vesting date' (date on which the options transfer
to shares) of the option being 31 March 2017, or (if earlier) a sale of the business or IPO of the
MPayMe Limited
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business. On a sale of the business or an IPO you will, in general, be required to exercise your options
or they will lapse.
It is also proposed that in general you will need to be in the employment of the group at 31 March
2017.
Your percentage allocation of the total number of MPayMe Ltd shares calculated as above is:
0.359%
On the predicted future value of the company we anticipate this number to equate to US$10,354,680.*
It is our current intention to adjust your option entitlement to reflect the increase in share capital
expected following our current round of fundraising.
Please note that the above information is subject to all legal documentation being agreed and finalised
for all relevant jurisdictions.
We hope you share our enthusiasm and ambition in rolling out our Stock Option Plan at this exciting
stage in our business cycle and we look forward to working together with you to continue the growth
and success of the business.
The information contained in this letter is confidential and you should not disclose or communicate its
contents to anyone else who is employed by or otherwise engaged with the MPayMe group.
Best regards
Steven Taylor
Global CFO
MPayMe Limited
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