EXHIBIT 10.14
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into on July
2, 2003 by and among Thane International, Inc., a Delaware corporation
("THANE"), Reliant Interactive Media Corp., a Nevada corporation (the
"CORPORATION"), and Xxxxxxx Xxxxxxxxxx, an individual residing at 0000 00xx
Xxxxxx X.X., Xx. Xxxxxxxxxx, Xxxxxxx 00000 (the "EXECUTIVE"), under the
following terms and conditions:
RECITALS:
WHEREAS, Thane, the Corporation and the Executive entered into that
certain Employment Agreement, dated as of May 22, 2002 (the "ORIGINAL EMPLOYMENT
AGREEMENT"), pursuant to which the Corporation agreed to retain and employ the
Executive, and the Executive agreed to the Corporation desires to retain and
employ the Executive, and the Executive agreed to be employed by and perform
services for the Corporation, on the terms and subject to the conditions set
forth in the Original Employment Agreement;
WHEREAS, the Thane, the Corporation and the Executive desire to be
amend and restate the Original Employment Agreement in its entirety as set forth
herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Corporation and the
Executive as follows:
1. EMPLOYMENT PERIOD. The Corporation hereby agrees to employ the
Executive as its President, and the Executive, in such capacity, agrees to
provide services to the Corporation for the period beginning on May 22, 2002
(the "COMMENCEMENT DATE") and ending on March 31, 2005 (the "EMPLOYMENT
PERIOD").
2. PERFORMANCE OF DUTIES. The Executive agrees that during the
Employment Period, while he is employed by the Corporation, he shall devote
substantially all of his business time, energies and talents to serving in the
capacity of President of the Corporation in the best interests of the
Corporation, and to perform the duties assigned to him by the Board of Directors
of the Corporation (the "BOARD") faithfully, efficiently and in a professional
manner. The Executive shall not, without prior written consent from the Board
(which consent shall not be unreasonably withheld):
(a) serve as or be a consultant to or employee, officer, agent
or director of any corporation, partnership or other entity other than the
Corporation or its affiliates (other than civic, charitable, or other public
service organizations); or
(b) have more than a five percent (5%) ownership interest in
any enterprise other than Thane or its affiliates. Set forth on SCHEDULE 2(B)
attached hereto is a detailed list of the Executive's ownership interests as of
the date hereof.
3. COMPENSATION. Subject to the terms and conditions of this Employment
Agreement, during the Employment Period, while he is employed by the
Corporation, the Executive shall be compensated by the Corporation for his
services as follows:
(a) BASE SALARY. The Executive shall receive, for each
12-consecutive month period beginning on the Commencement Date and each
anniversary thereof, a rate of salary that is not less than $300,000 per year
(the "BASE SALARY"), payable in substantially equal monthly or more frequent
installments and subject to normal tax withholding. During the Employment Period
the Executive's Base Salary shall be reviewed by the Board on or before each
anniversary of the Commencement Date to determine whether an increase in the
Executive's rate of compensation is appropriate.
(b) INCENTIVE BONUS. During each year of the Employment Period
the Executive shall, to the extent provided below, be entitled to receive a cash
incentive bonus (the "INCENTIVE BONUS AMOUNT") based on the Corporation's
performance as follows:
(i) The Executive shall receive an Incentive Bonus
Amount equal to 4.167% of the Corporation's earnings before interest,
income taxes, depreciation and amortization, excluding (A)
extraordinary gains and losses and purchase accounting adjustments, (B)
acquisitions of businesses made after the Commencement Date and (C) the
payment of any Incentive Bonus Amounts ("EBITDA"), as determined in
accordance with U.S. generally accepted accounting principles,
consistently applied, as in existence at the date hereof ("GAAP"), for
the 2004 fiscal year and the 2005 fiscal year. For purposes of this
Agreement, the term "fiscal year" shall mean, for any given year, the
period beginning on April 1 in the preceding year and ending on March
31 in such year.
(ii) For purposes of calculating the Corporation's
EBITDA in this Section 3, Thane and the Corporation shall follow the
guidelines set forth on SCHEDULE 3(B) attached hereto.
(iii) (A) The Incentive Bonus Amount shall be payable
by the Corporation monthly. The Corporation shall pay any earned
Incentive Bonus Amount within ten (10) days after the completion of its
internally generated financial statements for each month (each, a
"MONTHLY FINANCIAL STATEMENT"), which Monthly Financial Statements
shall be prepared by the Corporation within thirty (30) days after the
end of each month; PROVIDED, that the Monthly Financial Statements for
April 2003, May 2003 and June 2003 shall be prepared by the Corporation
as soon as practicable after the date hereof. In the event that the
EBITDA set forth on any Monthly Financial Statement is negative, such
negative EBITDA calculation shall be carried forward and be offset
against any future positive EBITDA calculations; PROVIDED, HOWEVER,
that such carry forwards shall only occur with respect to negative
EBITDA amounts accruing on and after April 1, 2003.
(B) Within ninety (90) days after the end of
each of the 2004 and 2005 fiscal years, Thane shall provide a copy of
its audited consolidated financial statements to the Executive together
with a certificate, signed by the chief financial officer of the Thane,
reflecting the aggregate Incentive Bonus Amount earned by the Executive
for such fiscal year (the "INCENTIVE BONUS CERTIFICATE"). Any
discrepancy between the Incentive Bonus Amounts paid in accordance with
the Monthly Financial Statements during a fiscal year and the aggregate
Incentive Bonus Amount earned by the Executive in accordance with the
Incentive Bonus Certificate for such fiscal year shall be paid over by
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the Corporation to the Executive (in the case of an underpayment by the
Corporation) or by the Executive to the Corporation (in the case of an
overpayment by the Corporation) within fifteen (15) days after the
delivery of the Incentive Bonus Certificate for such fiscal year by
Thane to the Executive; PROVIDED, that if the Executive has delivered
an Incentive Bonus Dispute Notice to the Corporation, then any such
discrepancy shall be paid by the responsible party within five (5) days
of the resolution of such dispute pursuant to Section 3(b)(iii)(C)
below.
(C) The Executive shall have ten (10) days
following its receipt of the Incentive Bonus Certificate pursuant to
Section 3(b)(iii)(B) to notify the Corporation in writing of its
disagreement with the calculations of the aggregate Incentive Bonus
Amount earned by the Executive for the applicable fiscal year (each, a
"INCENTIVE BONUS DISPUTE NOTICE"). The Corporation and the Executive
shall attempt in good faith to reach a resolution of any such
disagreement. If any such disagreement is not resolved to the
satisfaction of the parties, the Executive may retain for the benefit
of all the parties hereto a nationally recognized independent
accounting firm acceptable to both the Corporation and the Executive
(the "INDEPENDENT ACCOUNTANT") to conduct an audit of the Corporation
and resolve any remaining disputes concerning the Incentive Bonus
Amount. The Independent Accountant's determination of any Incentive
Bonus Amount in question shall become final and binding on the parties
on the date the Independent Accountant delivers its final resolution in
writing to the Corporation and the Executive (which final resolution
shall be delivered not more than 30 days following submission of such
dispute). The fees and expenses of the Independent Accountant shall be
borne the party whose estimate of the Incentive Bonus Amount is
furthest away from the Independent Accountant's determination of the
amount of such Incentive Bonus Amount.
(D) The Executive and his representatives
shall have the right to inspect all audited and internally prepared
financial statements, records and other accounting data, including
accountants' work papers, relating to the calculations of the Incentive
Bonus Amounts.
(c) EXECUTIVE LOAN.
(i) On the Commencement Date, Thane shall lend to the
Executive a principal amount of $714,250 (the "EXECUTIVE LOAN"), which will be
evidenced by the secured promissory note in substantially the form of EXHIBIT A
attached hereto and subject to the Pledge Agreement substantially in the form of
EXHIBIT B attached hereto. If the Corporation's cumulative EBITDA for the 2003,
2004 and 2005 fiscal years (the "THREE-YEAR FISCAL PERIOD") equals or exceeds
$15.0 million, the Executive shall be entitled to (A) full forgiveness of all
principal and interest outstanding on the Executive Loan (the "EXECUTIVE LOAN
FORGIVENESS") and (B) a cash bonus equal to $285,750 (the "EBITDA BONUS"). All
amounts of Executive Loan Forgiveness and EBITDA Bonus shall be calculated based
on the Corporation's financial statements at the end of each fiscal year during
the Three-Year Fiscal Period. For each fiscal quarter during the Three-Year
Fiscal Period, the Executive shall be entitled to receive (to the extent not
previously forgiven or paid (as applicable) in any previous fiscal quarter) a
ratable portion of the Executive Loan Forgiveness and the EBITDA Bonus
calculated by multiplying (1) the full amount of each of the Executive Loan and
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the EBITDA Bonus by (2) a fraction: (x) the numerator of which is the
Corporation's cumulative EBITDA as of the end of then current fiscal quarter,
and (y) the denominator of which is $15.0 million, and SUBTRACTING from the
foregoing product the aggregate amount of the Executive Loan Forgiveness and the
EBITDA Bonus previously distributed to the Executive. All earned portions of the
Executive Loan Forgiveness and the EBITDA Bonus must be received by the
Executive (A) within forty-five (45) days of the end of each fiscal quarter and
(B) within sixty (60) days of the end of each fiscal year.
(ii) If (A) at any time after the end of the
Three-Year Fiscal Period the Executive defaults on the repayment when due of any
principal and interest outstanding on the Executive Loan that has not been
forgiven pursuant to Section 3(c)(i) above and (B) Thane receives any tax
benefit as a result of such repayment default (a "TAX BENEFIT"), then Thane
shall pay to the Executive a cash amount equal to the amount of such tax benefit
(a "TAX BENEFIT PAYMENT"); PROVIDED, that in no event shall the Tax Benefit
Payment exceed an amount equal to (x) the EBITDA Bonus MINUS (y) any ratable
portion of the EBITDA Bonus paid to the Executive pursuant to Section 3(c)(i)
above. The Corporation shall pay any Tax Benefit Payment within thirty (30) days
after (1) the receipt by the Corporation of a cash refund as a result of the Tax
Benefit or (2) a reduction, after the end of the Three-Year Fiscal Period, in
current taxes payable by the Corporation as a result of the Tax Benefit.
(d) The Executive shall be entitled to receive the following
perquisites:
(i) The Corporation shall provide health and medical
insurance for the Executive in a form and program to be chosen by the
Corporation for certain of its executive employees as a group.
Additionally, the Executive shall be provided with vacation and such
other non-cash benefits provided to other similarly situated executives
of Thane.
(ii) The Corporation shall provide the Executive with
directors and officers liability insurance on substantially the same
terms and conditions as other similarly situated executives of Thane.
(iii) The Corporation shall reimburse the Executive's
current monthly automobile lease payment until the earlier of (A) the
expiration of the Executive's current automobile lease or (B) the end
of the Employment Period, after which time the Corporation shall
provide the Executive with a monthly automobile allowance consistent
with those provided to other similarly situated executives of Thane.
(e) The Executive shall be reimbursed by the Corporation for
all reasonable business, promotional, travel and entertainment expenses incurred
or paid by the Executive during the Employment Period in the performance of his
services under this Employment Agreement: (i) provided that such expenses
constitute business deductions from taxable income for the Corporation and are
excludable from taxable income to the Executive under the governing laws and
regulations of the Internal Revenue Code unless otherwise agreed to by the
Corporation's Board of Directors; and (ii) to the extent that such expenses do
not exceed the amounts allocable for such expenses in budgets that are approved
from time to time by the Corporation. In order that the Corporation reimburse
the Executive for such allowable expenses,
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the Executive shall furnish to the Corporation, in a timely fashion, the
appropriate documentation required by the Internal Revenue Code in connection
with such expenses and shall furnish such other documentation and accounting as
the Corporation may from time to time reasonably request.
4. RESTRICTIVE COVENANTS. The Executive acknowledges and agrees that:
(i) the Executive has a major responsibility for the operation, development and
growth of the Corporation's business; (ii) the Executive's work for the
Corporation has brought him and will continue to bring him into close contact
with confidential information of the Corporation, Thane and each of their
respective customers; and (iii) the agreements and covenants contained in this
paragraph 4 and in the Merger Agreement are essential to protect the business
interests of the Corporation and Thane and that the Corporation and Thane would
not enter into the Employment Agreement but for such agreements and covenants.
Accordingly, the Executive covenants and agrees to the following:
(a) CONFIDENTIAL INFORMATION. Except as may be required by the
lawful order of a court or agency of competent jurisdiction, the Executive
agrees to keep secret and confidential, both during the Employment Period and
indefinitely after the Executive's employment with the Corporation terminates,
all non-public information concerning the Corporation, Thane and each of their
respective affiliates that was acquired by, or disclosed to, the Executive
during the course of his employment by the Corporation, including information
relating to customers (including, without limitation, credit history, repayment
history, financial information and financial statements), costs, and operations,
financial data and plans, whether past, current or planned and not to disclose
the same, either directly or indirectly, to any other person, firm or business
entity, or to use it in any way; provided, however, that the provisions of this
paragraph 4(a) shall not apply to information that: (a) was, is now, or becomes
generally available to the public (but not as a result of a breach of any duty
of confidentiality by which the Executive is bound); (b) was disclosed to the
Executive by a third party not subject to any duty of confidentiality to the
Corporation or Thane prior to its disclosure to the Executive; or (c) is
disclosed by the Executive in the ordinary course of the Corporation's or
Thane's business as a proper part of his employment in connection with
communications with customers, vendors and other proper parties, provided that
it is for a proper purpose solely for the benefit of the Corporation and/or
Thane. The Executive further agrees that he shall not make any statement or
disclosure that (i) would be prohibited by applicable Federal or state laws, or
(ii) is intended or reasonably likely to be detrimental to the Corporation,
Thane or any of their respective subsidiaries or affiliates.
(b) NON-COMPETITION. The Executive, the Corporation and Thane
agree that reasonable restrictions upon competition with the Corporation and/or
Thane following termination of the Executive's employment with the Corporation
are necessary to protect the business interests of the Corporation and Thane.
(i) For purposes of the scope of this Section 4(b),
the extent of each of the Corporation's and Thane's business (the
"BUSINESS") shall be limited to the actual and intended business of the
Corporation and Thane, as demonstrated by each of their books, records,
contracts, advertising, strategic plans and financial and budget
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documents, created or relied upon during the Employment Period and as
of the date the Executive leaves the employment of the Corporation.
(ii) The Executive and Corporation agree that, for a
period commencing on the Commencement Date and ending on the later of
(A) the one (1) year anniversary of the date on which the Executive's
employment with the Corporation is terminated either (x) for cause, (y)
upon the Executive's disability pursuant to Section 5(e) or (z) upon
the voluntary resignation of the Executive pursuant to Section 5(b), or
(B) March 31, 2005 (the "NON-COMPETITION PERIOD"), the Executive shall
not serve as or be a consultant to or employee, officer, agent,
director or owner of more than five percent (5%) of another
corporation, partnership or other entity that competes with the
Corporation or Thane in the Business; provided, however, in the event
the Executive's employment with the Corporation is terminated without
cause, the Non-Competition Period shall immediately terminate if the
Corporation (or Thane) does not continue to pay the Executive's salary
pursuant to Section 5(a) hereof.
(iii) That the nature of the television production
business of the Corporation is interstate and international in scope,
that the global scope of the business renders a global restriction
reasonable and a more narrowly tailored geographic restriction
insufficient to protect the legitimate business interests of the
Corporation.
(c) REMEDIES. If the Executive breaches, or threatens to
commit a breach of any of the provisions contained in paragraphs 4(a) and 4(b)
(the "RESTRICTIVE COVENANTS"), the Corporation and Thane shall have the
following rights and remedies, each of which shall be enforceable, and each of
which is in addition to, and not in lieu of, any other rights and remedies
available to the Corporation and Thane at law or in equity.
(i) The Executive shall account for and pay over to
the Corporation all compensation, profits, and other benefits which
inure to the Executive's benefit which are derived or received by the
Executive or any person or business entity controlled by the Executive,
or his relatives, resulting from any action or transactions
constituting a breach of any of the Restrictive Covenants.
(ii) Notwithstanding the provisions of subparagraph
4(c)(i) above, the Executive acknowledges and agrees that in the event
of a violation or threatened violation of any of the Restrictive
Covenants, the Corporation and Thane shall have no adequate remedy at
law and shall therefore be entitled to enforce each such provision by
temporary or permanent injunction or mandatory relief obtained in any
court of competent jurisdiction without the necessity of proving
damages, posting any bond or other security, and without prejudice to
any other rights and remedies that may be available at law or in
equity, and the Corporation and Thane shall also be entitled to recover
its attorneys' fees and costs incurred to enforce any of the
Restrictive Covenants from the Executive.
(d) SEVERABILITY. If any of the Restrictive Covenants, or any
part thereof, are held to be invalid or unenforceable, the same shall not affect
the remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid or unenforceable portions. Without limiting the
generality of the foregoing, if any of the Restrictive Covenants, or any part
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thereof, are held to be unenforceable because of the duration of such provision
or the area covered thereby, the parties hereto agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision and, in its reduced form, such provision shall then be enforceable.
(e) PROPRIETARY RIGHTS. The Executive acknowledges and agrees
that all know-how, documents, reports, plans, proposals, marketing and sales
plans, client lists, client files, and any materials made by the Executive or by
the Corporation are the property of the Corporation and shall not be used by the
Executive in any way adverse to the Corporation's interests. The Executive shall
not deliver, reproduce or in any way allow such documents or things to be
delivered or used by any third party without specific direction or consent of
the Board. The Executive hereby assigns to the Corporation any rights which he
may have in any such trade secret or proprietary information.
5. TERMINATION AND COMPENSATION DUE UPON TERMINATION. The Executive's
right to compensation for periods after the date the Executive's employment with
the Corporation terminates shall be determined in accordance with the following:
(a) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD CAUSE.
In the event the Corporation terminates the Executive's employment under this
Agreement without cause or the Executive resigns for Good Cause pursuant to
Section 5(d),
(i) and for the twelve month period immediately
preceding the effective date of termination the Corporation had
positive net income, upon the Executive's prior voluntary execution of
a written release (to be drafted and provided by the Corporation) of
any and all claims, including without limitation any claims for lost
wages or benefits, stock options, compensatory damages, punitive
damages, attorneys' fees, equitable relief, or any other form of
damages or relief (excluding claims for amounts which may be payable
pursuant to this Agreement) the Executive may assert against the
Corporation which release shall be mutually agreed upon by the
Corporation and the Executive:
(A) the Corporation shall pay the Executive in
accordance with the provisions of paragraph 3 any compensation
and benefits (including any earned portions of the Incentive
Bonus Amount, the Executive Loan Forgiveness and the EBITDA
Bonus) owed to the Executive through the effective date of
termination;
(B) the Executive shall be entitled to receive all
payment of his salary (as of the effective date of
termination) in accordance with the provisions of subparagraph
3(a) for the lesser of (1) twelve months or (2) the remainder
of the Employment Period;
(C) the Executive shall be entitled to receive any
Incentive Bonus Amount if and when earned in accordance with
the provisions of subparagraph 3(b) through the remainder of
the Employment Period; and
(D) the Executive shall be entitled to receive the
greater amount of (1) the actual Executive Loan Forgiveness
and EBITDA Bonus earned in accordance with the provisions of
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subparagraph 3(c) during the Employment Period or (2) the
amount of any Executive Loan Forgiveness and EBITDA Bonus
earned by the Executive in accordance with the provisions of
subparagraph 3(c) prior to the effective date of termination,
first DIVIDED BY the actual number of days the Executive was
employed by the Corporation, then MULTIPLIED BY the total
number of days contained in the Employment Period, in either
case excluding any amounts of Executive Loan Forgiveness or
EBITDA Bonus distributed to the Executive pursuant to Section
5(a)(i)(A) above; or
(ii) for the twelve month period immediately
preceding the effective date of termination the Corporation had a net
loss, upon the Executive's prior voluntary execution of a written
release (to be drafted and provided by the Corporation) of any and all
claims, including without limitation any claims for lost wages or
benefits, stock options, compensatory damages, punitive damages,
attorneys' fees, equitable relief, or any other form of damages or
relief (excluding claims for amounts which may be payable pursuant to
this Agreement) the Executive may assert against the Corporation;
(A) the Corporation shall pay the Executive in
accordance with the provisions of paragraph 3 any compensation
and benefits (including any earned portions of the Incentive
Bonus Amount, the Executive Loan Forgiveness and the EBITDA
Bonus) owed to the Executive through the effective date of
termination;
(B) the Executive shall be entitled to receive all
payment of his salary (as of the effective date of
termination) in accordance with the provisions of subparagraph
3(a) for the lesser of (1) twelve months or (2) the remainder
of the Employment Period;
(C) the Executive shall be entitled to receive any
Incentive Bonus Amount if and when earned in accordance with
the provisions of subparagraph 3(b) through the remainder of
the Employment Period; and
(D) the Executive shall be entitled to receive any
Executive Loan Forgiveness and EBITDA Bonus if and when earned
in accordance with the provisions of subparagraph 3(c) through
the remainder of the Employment Period.
(b) VOLUNTARY RESIGNATION. The Executive may terminate his
employment with the Corporation for any reason (or no reason at all) at any time
by giving the Corporation sixty (60) days prior written notice of voluntary
resignation; provided, however, that the Corporation may decide that the
Executive's voluntary resignation be effective immediately upon notice of such
resignation. The Corporation shall have no obligation to make payments of any
kind to the Executive in accordance with the provisions of paragraph 3 for
periods after the date on which the Executive's employment with the Corporation
terminates due to the Executive's voluntary resignation.
(c) TERMINATION FOR CAUSE. The Corporation shall have no
obligation to make payments of any kind to the Executive in accordance with the
provisions of paragraph 3 or otherwise for periods after the Executive's
employment with the Corporation is terminated on account of the Executive's
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discharge for cause. For purposes of this paragraph 5, the Executive shall be
considered terminated for "CAUSE" if he is discharged by the Corporation on
account of the occurrence of one or more of the following events:
(i) the Executive becomes addicted to drugs or
alcohol;
(ii) the Executive discloses confidential information
in violation of paragraph 4(a) or engages in competition in violation
of paragraph 4(b) to the detriment of the Corporation and/or Thane;
(iii) the Corporation is directed by regulatory or
governmental authorities to terminate the employment of the Executive
or the Executive engages in activities that cause actions to be taken
by regulatory or governmental authorities that have a material adverse
effect on the Corporation;
(iv) the Executive is convicted of a felony crime
(other than a felony resulting from a minor traffic violation);
(v) the Executive flagrantly and repeatedly
disregards his duties under this Employment Agreement after (A) written
notice has been given to the Executive by the Board that it views the
Executive to be flagrantly disregarding his duties under this Agreement
and (B) the Executive has been given a period of thirty (30) days after
such notice to cure such misconduct. However, no notice or cure period
shall be required if Executive's disregard of his duties has materially
and adversely affected the Corporation and/or Thane;
(vi) any event of willful misconduct to the extent
that, in the reasonable judgment of the Board, the Executive's
credibility and reputation no longer conform to the standard of the
Corporation's and Thane's executives; or
(vii) the Executive commits an act of fraud against
the Corporation and/or Thane, violates a duty of loyalty to the
Corporation and/or Thane as defined under Florida law or violates
paragraph 2.
(d) RELOCATION OF EXECUTIVE. In the event that the Corporation
requests the Executive to relocate to an office outside of the Tampa/St.
Petersburg area, the Executive may object to such request in writing within
thirty (30) days of receiving such request. If the Corporation insists on the
Executive relocating outside of the Tampa/St. Petersburg area after receiving
the Executive's written objection to such relocation request, the Executive may
resign for "Good Cause."
(e) DISABILITY. The Corporation shall have no obligation to
make payments to the Executive in accordance with the provisions of paragraph 3
for periods after the date the Executive's employment with the Corporation
terminates on account of any long-term disability, except payments due and owing
through the effective date of termination. For purposes of this subparagraph
5(e), long-term disability shall mean any disability that has a material adverse
effect upon the ability of the Executive to perform on a full-time basis his
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customary duties hereunder on a full-time basis either in the judgment of the
Executive's doctors or that continues for a period of ninety (90) days out of
any one hundred and fifty (150) day period.
(f) DEATH. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of paragraph 3 for
periods after the date of the Executive's death, except payments due and owing
as of such date including earned salary, bonuses and Options.
6. SUCCESSORS. This Agreement shall be binding on, and inure to the
benefit of, each of the Corporation and Thane and each of their respective
successors and assigns and any person acquiring, whether by merger,
consolidation, purchase directly or indirectly of all or substantially all of
the Corporation's assets and business, or otherwise.
7. NONALIENATION. The interests of the Executive under this Agreement
are not subject to the claims of his or her creditors, other than the
Corporation, and may not otherwise be voluntarily or involuntarily assigned,
alienated or encumbered except to the Executive's estate upon his or her death.
8. WAIVER OF BREACH. The waiver by either the Corporation and Thane, on
one hand, or the Executive, on the other hand, of a breach of any provision of
this Agreement shall not operate as, or be deemed a waiver of, any subsequent
breach by either the Corporation, Thane, or the Executive.
9. NOTICE. Any notice to be given hereunder by a party hereto shall be
in writing and shall be deemed to have been given when received or, when
deposited in the U.S. mail, certified or registered mail, postage prepaid:
(a) to the Executive addressed as follows:
Mr. Xxxxxxx Xxxxxxxxxx
0000 00xx Xxxxxx X.X.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
(b) to the Corporation addressed as follows:
Reliant Interactive Media Corp.
0000 Xxxxx Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Board of Directors
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Thane International, Inc.
00-000 Xxxxx Xxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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and a copy to:
H.I.G. Capital LLC
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and a copy to:
White & Case LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. AMENDMENT. This Agreement may be amended or canceled by mutual
agreement of the parties in writing without the consent of any other person and
no person, other than the parties hereto (and the Executive's estate upon his
death), shall have any rights under or interest in this Agreement or the subject
matter hereof. The parties hereby agree that no oral conversations shall be
deemed to be a modification of this Agreement and neither party shall assert the
same.
11. APPLICABLE LAW. The provisions of this Agreement shall be construed
in accordance with the internal laws of the State of Florida. The prevailing
party in any proceeding to enforce or construe this Agreement shall be entitled
to collect from the non-prevailing party all reasonable fees, cost and expenses
(including, but not limited to, fees, costs and expenses in any appellate,
bankruptcy or post-judgment proceeding) incurred in connection therewith, in
addition to all other amounts due hereunder.
12. WAIVER OF JURY TRIAL. THE EXECUTIVE AND THE CORPORATION EXPRESSLY
WAIVE ANY RIGHT EITHER MAY HAVE TO A JURY TRIAL CONCERNING ANY CIVIL ACTION THAT
MAY ARISE FROM THIS AGREEMENT, OR THE RELATIONSHIP OF THE PARTIES HERETO.
13. TERMINATION. All of the provisions of this Agreement shall
terminate after the expiration of the Employment Period, except that paragraphs
4(a), 6 through 12 and this paragraph 13 shall survive indefinitely, paragraph
4(b) shall terminate upon the expiration of the Non-Competition Period and all
rights of the Executive to compensation that have accrued as of the date of
termination shall survive indefinitely.
* * *
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IN WITNESS WHEREOF, the Executive, the Corporation and Thane have
executed this Amended and Restated Employment Agreement as of the day and year
first above written.
XXXXXXX XXXXXXXXXX
/s/ Xxxxxxx Xxxxxxxxxx
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RELIANT INTERACTIVE MEDIA CORP.
By: /s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Chief Executive Officer
THANE INTERNATIONAL, INC.
By: /s/ Xxxxx X. XxXxxx
-----------------------------------
Name: Xxxxx X. XxXxxx
Title: Chief Financial Officer
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SCHEDULE 2(B)
EXECUTIVE'S OWNERSHIP INTERESTS
o Equity in Ideal Health 2 1/3%
o Equity in XWF (Wrestling League) 4%
o Equity in 3-Way Chili, LLC (Restaurant) Approximately 5%
o Equity in Charter Fishing Boat -
Miss B Haven Charters, LLC 25%
o HSN/Direct/Tan Perfect
(Buyout Royalties Only) 0.6% of gross
SCHEDULE 3(B)
EBITDA INCOME CALCULATION GUIDELINES
1. INTERNATIONAL AND US BUSINESS TO BUSINESS.
(a) The Corporation shall be allocated an income calculation for
International and US Business to Business sales received,
including all direct and indirect revenues received from the sale
of the products, by Thane from the Corporation's products on a
Unit Royalty basis. Such Unit Royalty to be mutually agreed to by
the parties and designed to equate to 50% of the profits received
by Thane for the Corporation's products. There will be no
administrative fee charged on such Unit Royalty, however, there
may be reasonable allocations of product related expenses
(including, but not limited to, travel, entertainment, convention
and other selling related expenses).
(b) To the extent that the Corporation's products are licensed by
Thane to a third party to be sold in the US through retail
channels, the Corporation will receive a credit equal to 90% of
the license fees received by Thane.
2. US DIRECT RESPONSE. The Corporation shall be allocated income of 100%
of their profits or losses on a project-by-project basis for US direct
response sales received, including all direct and indirect revenues
received from the sale of the products developed and produced by the
Corporation. All such profits or losses will be calculated at actual
costs, which will include: (1) an administrative fee equal to 3% of net
sales for the first $33.33 million of net sales, 2% of net sales for
the next $33.33 million of net sales, 1% of net sales for the next
$33.33 million of net sales and 0% thereafter; and (2) all production
and overhead costs of the Corporation. There will be no charge for
interest allocated to the Corporation. The Corporation shall be
allocated income of 50% of Thane's profits or losses on a
project-by-project basis for third-party funded US direct response
projects for which the Corporation has participated in the acquisition
of such project. The Corporation shall be allocated income of 50% of
Thane's profits or losses on the Q-Grill.
3. US INTERNET. The Corporation shall be allocated income of 100% of
Thane's profits of the Corporation's products sold through the Internet
on xxxxx.xxx. Products sold through the internet on Tradewinds will be
sold at a transfer price.
