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EXHIBIT 10.12
EMPLOYMENT AGREEMENT WITH XXXX X. XXXXXXX
March 19, 1997
Xx. Xxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx XX 00000
Dear Xx. Xxxxxxx:
Following are the basic deal points of the offer of employment to you from TEAM
Entertainment Group ("TEAM"):
1. Start Date: May 19, 1997.
2. Initial Term: Two (2) years, through May 18, 1999
3. Second Term: At TEAM's option, May 19, 1999 through May 18, 2000. Such
option will be exercised by TEAM no less than 120 days prior to the end of the
Initial Term.
4. Title: Senior Vice President, Domestic and International Sales
5. Duties and Responsibilities: To include acquisition, sales and packaging of
internally produced and acquired product, running the day to day operations of
the division, traffic and conventions. You will report to Xx. Xxxxx and the
board of directors. You will be provided with a shared assistant and a director
of sales, currently Xxxx Xxxxxx.
6. Compensation: (a) May 19, 1997 to May 18, 1998, salary payable at the rate
of $175,000 per year, in weekly installments on the Company's usual payroll
schedule.
(b) May 19, 1998 to May 18, 1999, salary payable at the rate of $200,000 per
year, in weekly installments on the Company's usual payroll schedule.
(c) In the event that TEAM elects to exercise its option for a third year, May
19, 1999 to May 18, 2000, salary payable at the rate of $225,000 per year, in
weekly installments on the Company's usual payroll schedule.
(d) You will also receive a minimum guaranteed bonus at the rate of $25,000 per
year ($2083.33 per month), or pro rata for portion employed thereof, such bonus
to be applicable against all sales commissions earned as set forth below. This
advance will further be carried over, and recoupable, from year to year of
employment. By way of example only, if by December 31, 1997, you have earned a
sales commission of $10,000, the difference of the 1997 minimum bonus (7/12 of
$25,000, or $14583.33) would be $4583.33, payable with the
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Mr. Xxxx Xxxxxxx
March 19, 1997
Page 2
commission payment. This $4583.33 would be carried over into the next year,
wherein you would still receive the minimum bonus, but in order to receive any
additional bonus, you would have to earn commission in excess of $29,583.33.
7. TEAM will further pay a yearly expense fee not to exceed $10,000 per year
(i.e. up to $834 per month) for preapproved expenses. This expense fee shall be
applicable against commissions earned as set forth below. Any additional
preapproved expenses shall be reimbursed for travel to conventions, sales trips
etc. All international and transcontinental travel will be business class.
Pre-approved expenses will be reimbursed within the normal payables cycle, not
to exceed 30 days;
8. Commission Structure: Commission will be payable as a bonus at the end of
each calendar year (i.e. December 31) payable within 45 days after the end of
each calendar year, earned at the following rates;
i) two and a half percent (2 1/2%) of the first two million dollars of
the sales divisions pre-tax profits;
ii) four percent (4%) of the next two million dollars of the sales
divisions pre-tax profits;
iii) five percent (5%) of the sales divisions pre-tax profits for all
profits exceeding four million dollars.
a) Pre-tax profits will be calculated as follows; on internally produced
product an imputed distribution fee of thirty percent (30%), and a cost cap
of five percent (5%) of gross sales; on acquired and other product, the
fee's and costs will be as negotiated on each such product; less, the costs
of the division (including salaries, trade-shows, expenses etc. and other
costs of sales)
9. Vacations: You will accrue two (2) weeks for the first year; three (3) weeks
for the second year; and four (4) weeks for all subsequent years.
10. Benefits: You will receive health insurance as it is provided to other
employees, commencing ninety (90) days after start of employment.
11. Exclusivity: You will be full time and exclusive to TEAM during the term of
employment and it has been agreed that you will perform as is reasonably
necessary, at TEAM's Los Angeles office. It is acknowledged that you will
continue with non-exclusive consultancy arrangements with Kinnevik Media
Properties Limited and Xxxx Xxxxxx Presents Inc. and with Cable Network Services
Inc., none of which shall interfere with your otherwise exclusive services to
TEAM.
12. Proprietary Information and Confidentiality: It is agreed that all
proprietary information, trade secrets and internal operations of TEAM,
including but not limited to the terms and conditions of this agreement, shall
remain confidential, except as the necessity arises to have this
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Mr. Xxxx Xxxxxxx
March 19, 1997
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agreement reviewed by attorneys, accountants or other professionals in the
ordinary and usual course of business. This confidentiality provision will
survive the term of employment.
13. Out Clause/Stock Options: It has been agreed that if TEAM does not
implement the anticipated Initial Public Offering (IPO) by September 19, 1997
then you will thereafter have the right to terminate this agreement with sixty
(60) days advance written notice. You will receive ten thousand (10,000) stock
option shares per year of employment, such options to vest after each year,
pursuant to the terms of the existing employee stock option plan.
Please review the above and indicate your acceptance thereof by signing, dating,
and returning a copy of this letter. We will thereafter prepare a more formal
employment agreement for signature. Thank you.
Sincerely,
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Business Affairs
Agreed to and accepted:
/s/ Xxxx X. Xxxxxxx Date: 3/21/97
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Xxxx X. Xxxxxxx
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AMENDMENT TO THE AGREEMENT WITH XXXX X. XXXXXXX
October 4, 1997
Xx. Xxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx XX 00000
Dear Xx. Xxxxxxx:
This is to confirm the following change to your employment agreement dated March
19, 1997.
Paragraph 6 is now amended to read as follows:
6. Compensation: (a) May 19, 1997 to May 18, 1998, salary payable at the rate
of $100,000 per year, in weekly installments on the Company's usual payroll
schedule, plus a performance bonus of up to $75,000 per year, payable in weekly
installments, along with your base salary.
(b) May 19, 1998 to May 18, 1999, salary payable at the rate of $200,000 per
year, in weekly installments on the Company's usual payroll schedule.
(c) In the event that TEAM elects to exercise its option for a third year, May
19, 1999 to May 18, 2000, salary payable at the rate of $225,000 per year, in
weekly installments on the Company's usual payroll schedule.
(d) You will also receive a minimum guaranteed bonus at the rate of $25,000 per
year ($2083.33 per month), or pro rata for portion employed thereof, such bonus
to be applicable against all sales commissions earned as set forth below. This
advance will further be carried over, and recoupable, from year to year of
employment. By way of example only, if by December 31, 1997, you have earned a
sales commission of $10,000, the difference of the 1997 minimum bonus (7/12 of
$25,000, or $14583.33) would be $4583.33, payable with the commission payment.
This $4583.33 would be carried over into the next year, wherein you would still
receive the minimum bonus, but in order to receive any additional bonus, you
would have to earn commission in excess of $29,583.33.
All other terms and conditions will remain the same. Please indicate your
understanding and acceptance of the above by signing and returning a copy of
this letter amendment as soon as possible.
Thank you.
Sincerely,
/s/ XXXX X. XXXXX
Xxxx X. Xxxxx
Business Affairs
Agreed to and accepted:
/s/ XXXX X. XXXXXXX Date: October 4, 1997
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Xxxx X. Xxxxxxx
